After staring at my computer for a solid 2 hours, my brain decided it would not cooperate. So this post will be a brain dump of 3 ideas that I could not turn into full posts. Let me know if you actually like this style of content. Thank you for reading.
This post is 933 words, 5-min read
Idea 1 - Make the BIG Change
Ramit Sethi says, "Stop asking $3 questions, and start asking $30,000 questions."
The point he is making is for us to focus on the things that will make the biggest difference in our lives. Rather than focus on minute and mostly meaningless changes. Find the areas in your life that will give you the most outsized results and focus on those. Examples:
Spend time developing a skill and being good at your job so you can increase your income
Stop working on the logo of your business and actually try to sell your service or your product
Stop looking for ways to save 50¢ when shopping, rather set up an automated savings and investing plan
Stop trying to make minor cuts to your budget, rather look at the BIG 3: Transportation, Housing, and Food.
Sell the house and rent so you can afford life
Sell the car and buy an affordable car
If you're paying off debt, you should know exactly when you will make the last payment on your loan.
Stop fighting not to eat the potato chips in the house. Rather when shopping avoid the snack aisle and don't buy them.
Replace them with alternatives like fruits, nuts, or yogurt
Rather than doing your best to go to a gym that you're uncomfortable in. Find an activity you enjoy doing like dancing, rock climbing, hiking, biking, or playing a sport.
Do those on a very consistent schedule.
Rather than deciding what not to eat. Find food you love that happens to be healthy and eat that.
If you want a long-term relationship, stop "talking" with exes or potentials. Choose the person in front of you and learn the most about them. Stop having alternatives!
You are far better off ripping off the band-aid and diving deep so you can get the best result.
As James Clear says, "Highly focused people do not leave their options open. They select their priorities and are comfortable ignoring the rest. If you commit to nothing, you’ll be distracted by everything."
Because even if you go so deep and you find out you were wrong. You will learn so much that you'll still be so much further ahead than the people who keep playing small.
Idea 2: How to Invest
You've heard myself and a billion other people say, "INVEST!" But you are never told how to actually do it. Let’s change that today.
Before Investing
Create a Budget - Need to know expenses and account excess that can be saved and invested
Emergency Fund - Minimum $1500 Eventually 3-12 Months of Expenses
Pay Off High-Interest Debt - Interest Rate over 6% (Credit Cards, Auto Loans)
Account Needed
401(k) - If your job offers one
Open Roth IRA through a brokerage - Fidelity, Vanguard, Charles Schwab, M1 Finance
What To Invest In
Target Date Index Fund
Fidelity Freedom Index (60 + Birth Year) Fund
Vanguard Target Retirement (60+Birth Year)
Schwab Target (60 + Birth Year) Index Fund
Index Funds
Fidelity® ZERO Total Market Index Fund (FZROX)
Vanguard Total Stock Market Index Fund (VTSAX)
Schwab Total Stock Market Index Fund® (SWTSX)
How to Invest in 401(k)
For 401(k) contact your HR to determine how to set up your 401(k) automatic deposits
Be mindful of the fees that are given in the selected investment options.
When looking at the investments, do a page search for the words "EXPENSE RATIO"
The number should be no more than 0.1%
Investment options may not be the exact same as what is shown above but look for things with words such as Index Fund, S&P 500, Total Market, International Market, World Index Fund
How to Invest in Roth IRA
Set up automatic deposits into the Roth IRA
I suggest doing a direct deposit from your paycheck.
This way you never see the money and never miss the money
Set up automatic buying of one of the suggested investment options above
Leave it and watch your money compound
How Much to Invest
401(k) at the minimum invest up to your company match
Typically to get a 100% match, you have to invest 6% of your paycheck
Roth IRA
I suggest most people max out this account which is $6500. This is $500 a month
If you cannot max out the account, do whatever amount you can afford. I started with $50/month
Idea 3: Buy Nice Things not Fancy Things
"You Get Rich by Living Poor. You Get Poor By Living Rich."
Dare I say that a Fully Loaded Honda Civic is a better car than a base model BMW 3 series?! Let me explain.
But first a question. What's the difference between A fully loaded Civic and a base model BMW 3series?
A fully loaded Honda Civic costs about $31,000.
A base model BMW 3 series costs about $45,000.
The Civic is nice and makes life more pleasant.
The BMW is a status symbol.
Spending your money to buy status is the fastest way to go broke.
1 Recommendation
Morgan Housel, "Respect and Admiration." Morgan in another banger blog post, talks about the various ways we spend money to acquire status and why that is a complete waste of our resources.