Popular Financial Advice

Here are some of the most liked comments for personal finance:

  1. Most money issues have less to do with saving and investing money, and more to do with your mindset, your lack of patience and discipline, and your poor financial behavior and literacy. Too many people focus on what’s shiny rather than actually thinking long-term.
  2. If the housing prices where you live are too expensive and keep you from saving/investing money for the long term, you need to move and reduce your expenses.
  3. You should be able to enjoy your money. Once you have built strong financial habits and your saving/investing 20%+ on a monthly basis, you should take the vacation or buy the car you have been wanting (as long as you are able to pay with cash and still hit savings targets/sufficient emergency fund). Some focus too much on minimalism that they forget to enjoy life in the process. No one is guaranteed tomorrow!
  4. The most important financial decisions you make is who you marry and building wealth over the long term.
  5. Debt, taxes and excess spending destroy wealth. 
  6. You should spend less money than you earn.  Living within your means is crucial for financial freedom. Avoid debt by spending only what you’ve already earned, and prioritize saving and investing. This mindset promotes discipline, reduces stress, and sets you on a path to a financially secure and prosperous future.
  7. You should have an emergency fund for the unexpected expenses that will arise.  
  8. Utility bills are debt and a liability. Treat them that way. Get an asset to pay them.
  9. Don’t focus all your time, talent and treasure on investing by sacrificing living. There’s a lot more to invest in than finances. Be smart and plan for your future, learn from the past, and enjoy today. The most valuable asset you have is your time and your health, The only time that is guaranteed was yesterday. And, your health is an essential aspect of wealth.
  10. Patience is essential when investing in order to build long-term wealth. Markets are volatile in the short term, but staying the course and maintaining a disciplined approach will often lead to the power of compounding returns and greater rewards. Trust the process and watch your wealth grow.

The rich and the wealthy have different mindsets regarding building wealth. The rich and others think about how to make money, while the wealthy think about how to keep it and managing risk. 

You’re Responsible for Managing Your Money

“Don’t be like a ship at sea without a rudder, powerless and directionless. Decide what you want, find out how to get it, and then take daily action toward achieving your goal. You will get exactly and only what you ask and work for. Make up your mind today what is it you want and start today to go after it! Do It Now!” ~ Napoleon Hill

When you understand that you alone are responsible for managing your money and building wealth, everything changes. It’s not up to the government or your neighbor—it’s all on you.

Take control and make it happen.

It is ultimately the choices and actions you take with your money that have the greatest impact on your financial well-being.

It is about developing disciplined spending and saving habits, being responsible with debt, making wise investment decisions, and exhibiting patience and long-term thinking when it comes to financial goals.

Start by thinking about your end financial goal. What is the number (amount needed for retirement) you are aiming for? Once you have that number in mind, consider what actions you need to take now to make it a reality. If you’re unable to invest a lot right now, think about what steps you can take to change that situation.

Break down your goals into smaller, more manageable tasks, and you’ll be surprised at how much progress you can make.

Even if you cannot afford to invest $1,000 monthly, do not allow that to discourage you from investing. Beginning with more modest amounts such as $25, $50, or $100 can be a great starting point. It is crucial to make investing a priority, no matter how little, and then gradually increase your investments as time goes by.

When striving to build wealth and for financial freedom, don’t forget the importance of maintaining good health. True wealth is not only the freedom to pursue personal goals, but also the presence of good health. Without good health, financial freedom holds little to no worth.

While a healthy person desires numerous things, a sick person longs for just one: good health.

Defining Wealth

Frequently, when discussing wealth, the importance of good health is overlooked.

Being wealthy means more than just having money—it also means having good health. So, while you’re working hard to build wealth and be financially free, don’t discount the importance of good health.

Wealth is not about having the most expensive possessions, but rather having the freedom to do what you want, feeling joy and contentment in life, and being healthy. This is the best definition and meaning of wealth.

Mental Health Awareness Month: Positive Thinking

What you think shapes who you become and where you go.

Self-talk is the endless stream of unspoken thoughts that run through your head. These automatic thoughts can be positive or negative. Some of your self-talk comes from logic and reason. Other self-talk may arise from misconceptions that you create because of lack of information or expectations due to preconceived ideas of what may happen.

If the thoughts that run through your head are mostly negative, your outlook on life is more likely pessimistic. If your thoughts are mostly positive, you’re likely an optimist — someone who practices positive thinking.

There are numerous health benefits associated with positive thinking. Researchers continue to explore the effects of positive thinking and optimism on health. Health benefits that positive thinking may provide include:

  • Increased life and health span
  • Lower rates of depression
  • Lower levels of distress and pain
  • Greater resistance to illnesses
  • Better psychological and physical well-being
  • Better cardiovascular health and reduced risk of death from cardiovascular disease and stroke
  • Reduced risk of death from cancer
  • Reduced risk of death from respiratory conditions
  • Reduced risk of death from infections
  • Better coping skills during hardships and times of stress

It’s unclear why people who engage in positive thinking experience these health benefits. One theory is that having a positive outlook enables you to cope better with stressful situations, which reduces the harmful health effects of stress on your body.

It’s also thought that positive and optimistic people tend to live healthier lifestyles — they get more physical activity, follow a healthier diet, and don’t smoke or drink alcohol in excess.


References:

  1. https://www.mayoclinic.org/healthy-lifestyle/stress-management/in-depth/positive-thinking/art-20043950

Tax Everyone But Me – The Rich

Congress! Congress! “Don’t tax you. Don’t tax me. Tax the guy behind the tree.” ~ U.S. Senator Russell B. Long

Regarding taxing the other guy, “Most people have the same philosophy about taxes,” says U.S. Senator Russell B. Long, (D-LA), Chairman of the Senate Finance Committee, which handles tax legislation.

“All taxes discourage something. Why not discourage bad things like pollution rather than good things like working or investment?” – Lawrence Summers

Making federal tax policy is hard work because virtually any path chosen by Congress will have different impacts on sectors, regions, and tax payers no matter how hard one tries to make it as even-handed as possible.

“It is a paradoxical truth that tax rates are too high today and tax revenues are too low, and the soundest way to raise the revenues in the long run is to cut the tax rates.” – John F. Kennedy

In recent years, governments seem to have even stopped trying for tax policy neutrality and instead have embarked on tax policy competitiveness—using it as a bribe to entice companies to locate in their territory and as a weapon to punish companies that are either out of favor or attractive targets for easy money, writes William Reinsch, the Scholl Chair in International Business at the Center for Strategic and International Studies (CSIS).

“For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” – Winston Churchill

Recently, the European Union has begun to weaponize its tax policy as a search for easy money from foreign (almost entirely American)—marks and a way to disadvantage foreign companies in areas where the Europeans are having a hard time competing. The best current example of this is EU efforts, as well as those of individual member states, to impose a digital services tax (DST), according to Reinsch.


References:

  1. https://quoteinvestigator.com/2014/04/04/tax-tree/
  2. https://www.csis.org/analysis/dont-tax-me-dont-tax-thee-tax-fellow-behind-tree