A Path to Financial Bliss

“It’s tough to make predictions, especially about the future,” Yogi Berra

And it's certainly not all about money. It's really about your attitude and philosophy. So before going into a financial rabbit hole, please read and reflect on my 14 Principles for Living page.  Then perform the "Your Wheel of Life" assessment.  

 Then, if you still want to dive into financial wealth, please continue...

Start with the tactics outlined in the Investor's Business Daily's 10 Keys to Success

It all starts with taking responsibility for yourself and delaying gratification (ala "The Road Less Travelled" by Scott Peck).  That means separating wants from needs.   And with that commitment will come far fewer "bad choices" and eventually debt-free living for most. Living with less is incredibly liberating.  Read  "The Millionaire Next Door"  and "Die With Zero."  They are less about money and more about a lifestyle mindset.

A few tidbits of financial advice from my experience....

Create a budget and live by it!  How? Track every expenditure via a credit card and set a rhythm for optional expenses (restaurants, entertainment) by adhering to how often you do these activities each month. 

Starting TODAY,  Save a little and reduce debt.  Your budget MUST have a line for this.  I don't care if you are a single mom working a low wage job, a school teacher or a college student...Forgo Starbucks and put away $25 a week.  I recently had an opportunity to discuss this with the Vice President of Lincoln Financial services who helps many less fortunate people.  She attested to how successful this strategy can be...

Consider reducing your possessions and home size. Own a home only if it fits the lifestyle you desire and you aren't planning on moving in the next few years. Home ownership is often NOT the optimum path to liquid wealth, financial independence, and enabling the mobility needed to pursue your career.  I recommend this excellent article...For many owning a home is NOT the best way to save for the future 

Once your high-interest debt is paid off and you have a least a 2-month emergency fund (preferably 4-6 months), the best way to build wealth to reach a higher economic tier is... INVEST in the economy via the stock market and real estate.  For a long time, it was a division between stocks and bonds.  But no longer.  Read "The 60/40 Portfolio Is Dead. Long Live 33/33/33."

Don't even know how to start?  Go to  Motley Fool or Kiplinger. Want to read a book or two?   Start with "The Little Book of Common Sense Investing" and "Unconventional Success - A Fundamental Approach to Personal Investment."  They are not perfect or complete. But it's a decent start. 

Don't waste time trying to time the stock market or make the perfect pick.  Just use a 1-stop shopping low-cost "Target Fund" that gives you a mix of quality stocks and bonds based on your age.   Or create your own mix with  "Index funds!"  Lots of fish in that sea to do this.  One total market or S&P 500 mutual fund or ETF, such as IVV, VT, or SWPPX, is all you need to start.  Pick one and invest every month until you are middle-aged or have enough to branch out into higher-yielding investments.  Create auto investing so you put some in EVERY month.  If possible, maximize your ROTH IRA or ROTH 401K. Why ROTH?  Because taxes are going to be much higher in the future.  If you can't maximize your contributions, put half into a taxable brokerage account and half into your taxable account.  

In terms of investing, if you do some learning and have some discipline, be cautious, even skeptical when it comes to hiring financial advisors or active fund managers at least until you are nearing retirement and may not want to deal with financial investing.  Why.  They will take 1% to 2% of your hard-earned investments. My own experience was illuminating.  After doubling my investment money every 10 years for 4 decades, a wise financial planner showed me that if I had inverted all my investment allocations, the result would be nearly identical.  In other words, you just have to get in the game, called owning a piece of the economy, and let time do its thing (and hope Armageddon doesn't happen). 

Another way to state this caution is,  "Don't ask a barber if you need a haircut,"  from The Black Swan Fooled by Randomness. No, it's not the movie. It's a book by Dr. Nassim Taleb.  Great advice for life in general regarding risk management. More info on my Black Swan page.  Or you can read one of my papers on risk management

Have kids?  The best investment of all time is ensuring they excel in school and life.  When they do get a full ride to college, all the money you saved for college is yours!  No car for the kids.  Pay them a decent wage to apply for scholarships in lieu of an after-school starter job.  

Enough already! Time to meditate and picture yourself as a "rotting corpse" per Eckhart Tolle's, The Power of Now :)  In other words, you can't take it with you when you die, which you will soon enough.

Need more proof and a laugh?  Watch the movie, "The Big Short."   What does it tell you?  In the U.S., you need to take personal responsibility for your actions.  Don't be lazy and not learn what you need to learn...

Ready for some spice to boost you?   Spice your broad-based market fund holding with technology that will take everyone "to the promised land." I have recommended QQQ or FTEC since I first invested in 2020, if you have a 10+ year horizon.  

Real Estate - I don't care what income level you start at.  In the U.S., you can become financially independent.  Adopt the tenets of "The Millionaire Next Door" When you have money that:

1) can be long-term (illiquid)

2) You don't need/want more in an IRA or 401-K stocks and bonds 

Take the opportunity, "ride on the heels of the rich and powerful "   I'm talking commercial real estate. Remember, YOUR HOUSE IS NOT AN INVESTMENT. Real estate is the last best tax shelter.  Crowd-funded real estate now makes that available to EVERYONE without the challenges and risks of being a landlord.  Google "Best Real Estate Crowdfunding " 

Remember to stay grounded because there are external events and Black Swans coming. What do you ask?  Perhaps a pandemic or two.  And the big tsunami is Artificial Intelligence.  I wrote in 2022 that AI is going to change EVERYTHING. And more are saying it today. If you agree, invest in the technology ETFs above and, for goodness' sake, get versed in prompt engineering through a few online courses. 

And it may not all be for the better...More reason to live in the NOW and keep your "Wheel of Life" well-rounded.
 
Enough of finance, now close the laptop and go read a chapter of "The Way to Love" and then meditate on non-attachment and equanimity!

Have questions?  Email me