Smart Thinking On Investing – September 23
Smart Thinking On Investing – September 23
Allan Roth of AARP shares his five steps to making better financial decisions. And The New York Time’s Hal Hershfield and Cassie Mogilner Holmes ask the question; given the choice between more time or more money, which would you pick?
Hustle Like You’re Flat Broke to Save Money For the Future
- Creating the illusion you have no money will allow you to make inroads into saving and investing it for a stress-free financial future
- It’s not about being antisocial and saying no all the time to social events and experiences; it’s about living below your means to put money aside to grow wealth
- If your friends and family think you’re broke, they will be more understanding of your frugal mindset, budgeting actions and low-key lifestyle
Determine Your Financial Goals and Create a Budget to Achieve Them
- Start by working out exactly how much money you have coming in each month from every source
- Track your spending for a few months then list out all your expenses; every single thing you spend money on—this may come as a shock to you
- Work out where you can make cutbacks to begin leaving more at the end of your paycheck each month
- Track your spending and try to eat more home-cooked meals, it’s much cheaper than eating out
- Start reallocating that saved money into an emergency fund, making payments to lighten your debt load, and most importantly, to begin investing in the stock market
Compound Interest; “The Most Powerful Force in The Universe”
- Compound interest is the interest earned on interest over time; as your investment earns interest—provided you keep reinvesting—you’ll earn interest on top of that interest
- The interest rate your investments earn, the length of time you can leave your money alone, and the taxes you have to pay all affect your compound results
- Resist the temptation to seek higher returns at higher risk; more money is lost this way than is gained
For Sound Financial Decisions be Slow, Deliberate, and Logical
- When weighing up all important financial decisions— whether it’s a stock, fund or other financial product—take your time rather than act impulsively
- Consider all possible outcomes of your decision; both the good and the bad
- Look at the decision from all angles and ask yourself what is motivating the sale?
- Do your homework and get as much information as possible
- And discuss any important decision with others whose experience you value
Which Will Lead to Greater Happiness—Time or Money?
- A study of over 4,000 Americans showed that if offered the choice they would place greater value on money over time
- But of the same number that were surveyed, those that chose time were statistically happier with their lives
- Though sometimes it’s not always a choice, concentrating too much on the pursuit of money, therefore, will not necessarily bring you the life satisfaction you believe it may
Which would you choose though? Time or money? Share your thoughts in the comments section below
Do you want to start investing on your own, but don’t know how?
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