The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go. – Benjamin Graham
I am appalled by the fear that my daughter may lose her way in a quick rich scheme world that values monetary supply for what it can buy and not for the good it can achieve. An impatient world that promotes buy now pay later policy. That slowly rewires the brain chemistry to value instance gratification and denounces the value of effort.
In the confrontation between the wealthy and the perceived rich, the wealthy always wins because they bank on the value of consistent effort. The wealthy are perspicuous that investing is not the study of finances, it is how people behave with money on the long-term. I think most of us despite where we are in the socioeconomic hierarchy wants to explore different realms to better our lives and live widely. One of the tools to achieve that is through investing. It comes in different shapes. Essentially, it is the proliferation of profit from profit while – enjoying boredom!!! The purpose of this post is not to tell you what to invest in, rather, to share with you my favorite 10 curated snippets from my mentors in the financial sphere.
- Save like a pessimist, invest like an optimist
Investing can be boring at times, so operating on the concept of pragmatical pessimism can be helpful during the hiccups. Essentially, one needs to be hopeful for the best and prepared for the worst shall it arise. Save with the idea that the world breaks every few years — a recession, a pandemic, a terrorist attack. These events rock the economy and crush the stock market. It’s been like that forever and it’ll be like that forever. – Morgan Housel.
- Marry the right person
Whether you like to believe it or not, money is a big part of a relationship. People have grown up on different
money values and can see it very differently. To avoid any conflict down the road, both have to align
themselves with common money rules. – Ramit Sethi
- Generate multiple streams of income
Never depend on single income. Make investment to create a second source. – Warren Buffet.
- When there’s blood in the street that’s when you go to invest
Nathan Rothschild made a fortune buying in the panic followed the battle of Waterloo against Napoleon. He is
famous for his quote “Buy when there’s blood in the streets, even if the blood is your own.” It is referred to as
contrarian investing that is been popularized also by the one and only Warren Buffet. – Forbes
(https://www.forbes.com/2009/02/23/contrarian-markets-boeing-personal-finance_investopedia.html?
sh=100c6200b59a)
- Investing in Index funds
People want quick results. They want to brag about their stock that tripled or their fund that beat the S&P.
Letting an Index work its magic over the years isn’t very exciting. It is only very profitable. – JL Collins
(https://jlcollinsnh.com/2012/01/06/index-funds/)
- Real estate is a prominent asset class in your portfolio
Great returns – How would you like to make 10% on your money plus appreciation? It can be done. Pretty good
business with low hours – let’s say you owned a business that made $60K per year. How many hours do you
think you’d have to work a week? It would be a ton. As I said, I spend about two to three hours max a month
on my real estate investments. If we figured my hourly earnings over the life of my properties, it’s probably
astronomical. – ESI Money (https://esimoney.com/why-you-should-invest-in-real-estate/)
- Save your money
The main focus on financial samurai is to achieve greater happiness through financial independence. We
need to do more of what makes us happy, and less of what makes us sad. Based on my experience earning
$3.65hour flipping burgers at McDonald’s to making much more than the President of the United states during
my time on Wall St., I absolutely believe that $200,000 a year is the ideal income for maximum happiness. The
one enigma I’ve been dealing with for the longest time is wondering what the hell is wrong with me for
continuing to want to save so much. How much does someone really need after counting for all the basic
necessities for survival, especially if there’s already a decent flow of passive income? I then stumbled across a
survey by ally bank which really made a lot of sense. Their conclusion based on more than 1000 people is
simple: the more you save, the more likely you are to be happy. But what’s more interesting is that saving
money affects happiness more than how much you earn. – FinancialSamurai
(https://www.financialsamurai.com/they-key-to-happiness-is-saving-more-not-making-more-money/)
- Prioritize things to a happier journey
You can do (have) anything, but not everything. – David Allen
Our time is limited, so having an unquenchable desire to joggle so many things at once will be like chasing two
rabbits at once. There’s a trade-off for anything you gain, learn the dynamics of prioritizing things. Part of the
game – accept it!
- Make more money at your job
I once worked for a doctor who paid a cleaning company to come in once a week and clean the office and exam
rooms. I approached her and asked if she would pay me instead. So, once a week I would stay for a few hours
after hours and clean the office. It was a decent amount of money and really helped to pad my bank account. If
you take on more responsibility, make sure it is clear you want to be compensated for it. – Free money finance
(https://www.freemoneyfinance.com/2017/07/how-to-make-more-money-at-your-job.html)
- Time in the market Vs. Timing the market
Time in the markets is the most precious commodity when it comes to investing. By leaving money in the
markets to grow, the initial account contributions can multiply. Keep the money invested for a shorter period
and there’s less time for the sum to compound. Even if you choose to expand into other investing, like p2p
lending with lending club or with Motif Investing make sure you have time on your side when you are doing
it. Decide whether you are willing to make a tradeoff. You can’t have everything now and later. Ask yourself if
you’re willing to sacrifice a bit now for the likelihood of having more later. – Good financial cents
(https://www.goodfinancialcents.com/why-you-must-start-investing-now/)
Bonus Point:
The linchpin of achieving financial independence is to be agnostic, putting your emotions aside can save you a fortune. When you’re in the FOMO phase you take incalculable greater risks (house money effect), or perhaps you resist recalibrating your portfolio hoping that one day you will make your money from your meme stocks (sunk cost fallacy).
In conclusion, I would like to leave you with the words of the financial expert Dave Ramsey as he argues that attaining financial independence is more about psychology than money, with 80% being attributed to the former and only 20% to the latter. It is up to us whether to utilize our money, for external purposes or prioritize our own personal comfort. Our perception of the value of money influences the decisions we make.
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