Smart Thinking On Investing – September 22
The Financial Samurai Sam Dogen opens Smart Thinking this week with a warning not to let your frugality lead to lifestyle deflation. Millennial Boss Julie explains the risks involved in buying cryptocurrencies. And from Bitches Get Riches, Kitty reveals the financial lessons we can learn from the film, The Shawshank Redemption.
The Financial Panther encourages us that it isn’t all that difficult to play catch up with our finances. And Leah, writer of the blog ‘A Relaxed Gal’, shares her biggest financial regrets…
Don’t Let Frugality Rule You
- Becoming frugal to achieve financial freedom is a great characteristic to adopt, but once you reach your goal, it’s time to learn to relax slightly
- Don’t let lifestyle deflation creep up on you in your constant effort to maintain your frugal ways; you’ve worked so hard to get to this point
- Learn to maximize your lifestyle while maintaining your income and net worth, make your passive income more tenable and find a marginal spending ratio that you can cope with
Do you find your frugal inclinations taking over? Share your comments in the section below
Cryptocurrencies—Feeling FOMO or JOMO?
- Millennials are divided on cryptocurrencies; half are in 100%, while the other half are blissfully uninformed about the trend
- And the recent surge in cryptocurrencies is a trend—considering otherwise would be naïve—much of its popularity stems from ‘fear of missing out’ (FOMO) rather than ‘joy of missing out’ (JOMO)
- If you are interested, be aware; crypto coins are a volatile market ride, invest only if you don’t mind not seeing your initial investment again, and know that the whole thing is a gamble
“Your Prison Is Deficit”
- Just as Andy Dufresne is locked away, so are we all—by deficit: we can’t just eat and do exactly what we want, we must spend time working to pay to survive
- Our debts (The Sisters) are the biggest issue inside our deficit prison, and it takes a fight to overcome them
- Your job (Byron Hadley, Captain of the Guard) can be a fickle ally to helping you reach goals
- Your way out of deficit prison? A rock hammer—no wait—your discretionary funds are the most powerful tool you can use to achieve financial freedom
Playing Financial Catch Up
- If you follow further education past the usual three/four-year degree term, it can feel like you have much financial ground to catch up on in comparison to your peers who have been in the workforce longer
- Going for a long time without an income by continuing post-college training can be incredibly difficult, but you can at least hope to earn an above average wage after
- Thanks to the power of compound interest, catching up financially is not so difficult—just don’t fall victim to lifestyle inflation
Don’t Add Another Financial Regret to Your List
- Whether it’s staying in the same job too long and not realizing your earning potential or taking a job for less pay, we all have financial regrets tied to our careers
- Other regrets you may want to address before it’s too late are; not increasing your retirement account contributions and missing credit card payments
- But a large part of your future financial regret will lie in not speaking to a financial advisor sooner to help plan your goals
Do you want to start investing on your own, but don’t know how?
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