Smart Thinking On Investing – April 14
Heading up this week’s Smart Thinking, Kristin Wong helps us have constructive financial discussions with our parents for Lifehacker. Brian Preston of The Money Guy Show demonstrates how to start and manage your emergency fund. And Natalia Lusinski, for Bustle, gets real about what millennial women are up to with their money.
Ryan Vlastelica, writing for Market Watch, teaches us the danger of mixing emotions and trading. And for The New York Times, Schlomo Benartzi—professor at UCLA’s Anderson School of Management—reveals why we should avoid mixing our smartphones with our finance decisions…
“Sharing Financial Advice with the Older Generation”
- It can be hard to discuss finances with parents, particularly if they are the ones in need of advice, but there are ways of talking about money constructively without being patronizing
- Consider financial goals together; by being candid about your own financial issues and strategies you can inspire like-minded behavior and open a dialogue up between you
- Be approachable and informative, but hold back from giving unsolicited advice; you may discourage them from talking to you again
Fuel Your Emergency Fund
- Building an emergency fund will help your peace of mind should anything ever happen—but it’s not to be tapped into just when your regular budget runs low
- To begin with, aim for at least one month’s net pay, increasing to 3 to 6 months’ worth over time
- The best place to store it is in a low risk, easy access savings account or a high-yield money market account
The Saving Tips of Millennial Women
- Make investing effortless, set up automatic payments from your accounts to steadily increase your emergency fund, savings, and investments
- Try spending ‘fasts,’ where you limit your budget for set amounts of time in regular periods
- Ask yourself the following questions when considering a new purchase: Do I need this? Is it worth the price? Am I going to use it frequently?
What saving tricks do you use? Share your experiences in the section below
Sit Tight on Your Investments
- It doesn’t matter the size of your investment stake, or if you’re invested in index funds or single securities
- If you trade based on emotion and your reactions to the market ups and downs you’re going to see a significant negative impact on your return
- To get out of this habit, avoid watching the stock market, leave emotions out of it, and go long-term with your perspective—sit on a slowly growing nest egg and just stay invested
Swipe—Oops! There Goes My 401(K)
- Recent studies show that 52 percent of adults use mobile banking on their smartphones—great to help curb our spending
- But, nowadays, we can also use them to watch the market, buy or sell stocks, and access our retirement funds too—amongst a number of other things
- The ease of using a smartphone can be detrimental—we’re making decisions too quickly with them, not considering the consequences of our spontaneous mobile actions
Do you want to start investing on your own, but don’t know how?
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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article. Andrew Stotz doesn’t necessarily endorse any stocks or shares mentioned in the articles or the author of such articles linked to and summarized in Smart Thinking On Investing and cannot guarantee the accuracy of its information.