Smart Thinking On Investing – June 30
Nicole Dieker, writing for The Billfold, opens up Smart Thinking with advice from a quantitative analyst. Mel, the writer of Broke Girl Rich, helps us scale our personal finance mountains. And Piggy from Bitches Get Riches urges us to talk to our parents about their retirement plans.
Erica Henkel, The Lady in Black, shares her letter of forgiveness—written to her money. And Steve Gillman, author of 101 Weird Ways to Make Money, writes for The Penny Hoarder about how money affects your brain…
Advice from a Quant
- Want to avoid debt? Live within your means and stay away from credit card debt—even if that means living on ramen noodles for a while
- Want to save money? Change your mindset and think about your savings in abstraction—as money you definitely can’t spend!
- Invest! Put your money in a passive ETF or mutual fund as soon as possible—you don’t need to get fancy but you do need to get started
Be the King of Your Finance Mountain
- We’re all trying to scale our own finance mountains, from that “Oh, s*it moment” when you first realize you need to get started, up to the peak and financial independence beyond
- The steps along the way are vital though, and you should mark each achievement as you hit your emergency fund goal, pay off your debt, and start saving for life goals
- The peak is for when you hit your stride and start earning more; maximizing your potential to hit financial freedom
Have the Talk
- One of the greatest gifts we can pass onto our next generation is the freedom to concentrate on building their financial wealth for their own retirement without having to consider us
- It’s worth opening up a dialogue with your parents to discuss their future plans accordingly, so nothing comes as a surprise when events play out as they naturally will
- Being able to plan ahead for any eventuality is a much better idea than staying in the dark, so sit down and have the talk
Money: You Are Forgiven
- Money is, of course, an inanimate object, but it plays such a major part of our lives that we don’t tend to realize the depth of the relationship we have with our finances until it becomes negative
- When it fails us, leaves us, and is hard to come by, we struggle to overcome its absence
- But it is not money’s fault; it’s worth remembering that when we curse and cry because as in any relationship, commitment must come from both parties—be true to your finances and they will be true to you
What Your Brain Does on Money
- Brain scans show that our brains react to money the same as cocaine with a similar addictive response, so be careful of any risks you take with your finances
- We will refuse free money if we believe the proposal to be unfair, which is worth knowing before you undertake any ‘irrational’ decisions about your money
- Money can be a pain reliever but also increases our pain receptors and distress if we think about our finances in a negative way
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.