Smart Thinking On Investing – April 21
Of Dollars And Data head up Smart Thinking this week with a view on savings versus investing. Cullen Roche of Pragmatic Capitalism reveals why we feel anxiety over our success. And Ted Jenkin, for Your Smart Money Moves, writes of how to stop living paycheck to paycheck for top earners.
Melanie Lockert, writing for Chime Bank, helps us navigate those tricky scenarios with our friends and money. And Jane Hwangbo shares what is holding you back about money for Thrive Global…
Saving and Investing Over Your Life Span
- Saving and investing will affect you financially at different points in your life, but that doesn’t mean you should neglect one in favor of the other
- Savings will be more important to you earlier in your life, but it is your investments that will be more significant in later years
- Early saving habits directly correlate with later financial success because they will increase your disposable income for investing and help you get into the overall habit of living on less money
Decide What Is Enough for You
- One of the driving reasons behind our anxiety over lack of “success” is that we don’t take the time to work out what it is we actually want to accomplish
- By not knowing what is “enough,” how can we be in control of our finances? Our assets and goals will never be aligned—as we earn more we will also spend more
- Take control of this asset and liability mismatch; create a financial plan and set your goals out early on in life, then stay on your path
Financial Paycheck to Paycheck Phenomenon
- Despite earning six figure salaries, there is a growing group of people between 30 and 50 who are struggling to survive financially
- Part of the problem with earning such a large income is that spending habits increase accordingly, and they have no measurement system to curb expenditure
- Six-figure earners are also more likely to avoid asking for professional financial help, make more extravagant purchases in line with their lifestyle, and fail to pay themselves first for retirement and savings
Are you part of this financial paycheck to paycheck phenomenon? Share your experiences in the section below
Uncomfortable Money Situations
- Splitting the bill: If you don’t want to get involved in large group checks, be open beforehand about your frugality and lay your financial situation and budget out on the table
- Neither a lender or borrower be: Rather than chance a broken friendship, only lend money that you can risk not getting back, and if you’re owed money, follow-up in a diplomatic manner
- Being a co-signer: This is a much larger risk than merely lending someone money as it may jeopardize your credit score too—just say “no”
“Are You Ready to Start Financially Thriving?”
- Money is never the actual goal; it’s meant to be exchanged for what you actually desire
- The best way to make money work hardest for you is to make it work slowly—think long-term investing horizons and holding periods
- Thriving financially is about having the ability to say “no” to spending
- Surround yourself with a network of people that are supportive of your financial goals and will actively help you achieve them
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.