This post is 591 words, a 3-minute read. Enjoy!
We all want the best advice we can find, hoping it will help us skip some steps, get to our destination a bit faster, or recover from a difficult time.
However, we all hate the best advice we are given. Because the best advice we are given is typically extremely boring. The advice seems unintelligent or, even worse, too obvious.
If the advice we get isn't beautiful or elaborate or feels complicated, we tend to believe the person giving us the advice knows no better than we do, so we ignore it and chase after someone who is selling a facade.
The Best example for this is with our finances.
To be good with money, you only need to know a few rules, and it can be stated in a simple sentence:
Live on Less than you make, Invest and Safe the Rest.
The saying breaks down to:
Make income and grow income.
Don't spend your entire income on living expenses and wants.
Save for emergencies and large life expenses (cars, weddings, etc.)
Invest as much as you can. Preferably in low-cost index funds or target date index funds.
Of course, there are specifics for each of these things and I share those specifics in the 6-Part Series on "Everything You Need To Know About Money".
However, the key advice is not fancy or exciting. Which, ironically, is what we should want when talking about managing money. You want simplicity over complexity. However, we naturally hate that idea.
We want a complex tax planning strategy that involves creating an LLC that might allow you to deduct expenses and potentially reduce your taxes.
In reality, all you really need to do to reduce your taxes is invest in either a 401(k), 403(b), 457, TSP, IRA, or HSA.
We want a complex investing strategy of trading stocks, options, or investing in Hedge Funds or Venture Capital.
In reality, all we need to do is consistently invest in low-cost index funds over a very long period of time.
We want the complex real estate strategy of BRRR (buy, remodel, rent, refinance, repeat).
When most of us should start with basic house hacking to even know if we like being a landlord.
Or better yet, just invest in Real Estate Investment Trusts (REITs), which ironically you would already be investing in with a low-cost index fund.
We want complex money strategies so we can "feel" smart or special or different. But choosing to do these things costs us our peace and the joy of using money to live the life we want.
Now, do not get me wrong. None of these things is bad or wrong for anyone to do. They are all possible strategies to achieve financial freedom. However, the more complicated the strategy, the more time and resources are required.
There are two questions we have to ask ourselves:
Is the stress worth it?
What do I get?
We have to always remember that money is nothing but a tool to allow us to live the life that we want to live. So, we gotta be mindful to ensure that we do not get carried away with the chase of acquiring more that we forget the purpose of money in the first place.
Remember Generosity>greed
God Bless You
✌🏾
Recommendation Section
The inspiration for this post comes from Morgan Housel’s recent post called “Beautiful vs. Practical Advice.”
Ben Carlson in "Some Things I'm Thinking About", discusses the stuff that actually matters after losing his brother to cancer. Two of my favorite snippets are:
My lists are changing. The list of things I don’t care about is growing exponentially. There is a lot of bullshit in the world I’m more or less done caring about. The list of things I do care about is shrinking, but my feelings for the important things are growing stronger by the day.
Life is for living. Money is for spending.
Nick Maggiulli in "Never Root for a Recession" discusses the second order effects of a stock market crash. Typically, I am the guy who gets hyped about market crashes, but Nick presents a good case why this is never great for anyone especially for those of us who are just starting out our careers. Great quote:
The problem is that market crashes don’t exist independent of the economy. It’s like those people who want to buy a house but are waiting “until prices crash.” Do you think there exists a world where housing prices crash and everything else stays the same? No way. The same thing is true of financial crises in general. Such declines have higher-order effects that could create problems for you that you would never anticipate.
Jack Raines in "Russian Uber Drivers Are America's Leading Optimists", discusses the importance of giving ourselves a better perspective outside the bubble we live in every day. Especially those of us who have acquired a level of success in our life but yet feel inadequate because of what we are around. My favorite quote:
Young folks, who are, by any conceivable metric, crushing it, are walking anxiety disorders worried about not making enough money (despite making double the median household income in the US on their own), not having a nice enough apartment (ignoring the beauty of living within a 10-minute walk/drive of their friends), not progressing in their careers fast enough (despite the fact that they’re only a few years into their careers), and feeling like they just aren’t doing enough, despite being better off than virtually anyone, anywhere, at any other point in history.
Josh Brown in "Give it a minute", discusses the best way to approach most situations that seemingly make no sense.
Heather Boneparth in "Six Financial Red Flags You Can't Afford to Ignore" explains some of the biggest issues that affect the finances in relationships. Some of my favorites snippets:
Two forms of Never Enough: overspending and ever moving goal post of success. Great quote from the post "The issue this brings into relationships is that when nothing ever feels like enough, then eventually, no one ever feels like enough. Your partner starts to feel like they’re becoming one of your moving targets, and nothing they ever say or do will be, well, enough."
DON'T LIE: "Even the little white lies I hear about in my day-to-day life, they compound. Lying is a slippery slope. We convince ourselves certain conduct is acceptable, then we get more comfortable, and we go deeper and deeper. Our standards dive lower and lower."
Having no patience: "People find it hard to respect the timeline. And when they can’t respect the timeline, they end up taking on risks they really shouldn’t, or they shut down and miss out on opportunities altogether."
There are hidden costs in almost everything we choose to purchase. Doug and Heather Boneparth have a series covering many of them. The latest topic is on Tariffs
🎙️Podcasts Episode I love:
50Fires. It is by Carl Richards, a recovering Financial Planner and Advisor. He could help other people with their finances but had a difficult time talking about money with his wife and children. It has quickly become one of my most anticipated podcasts to listen to every week.
Money For Couples by Ramit Sethi. Ramit is no one new to the world of money and personal finance. In his podcast, he talks with couples about their finances and helps them better enjoy their money or better get aligned. This is very important podcast for me as I enter a new stage of life.