Money Things
There are many things in life that we don’t know. However, there are a few things that we’ve picked up about personal finance, investing and money that we think can help clients and their families.
- The Jones family, next door, isn’t as rich or happy as you think they are…
- Luck is what happens when preparation meets opportunity
- Really rich people almost never attribute their success to getting lucky
- Get rich quick and get poor quick are two sides of the same coin
- The more complicated the investment advice, the more expensive and the less useful it is
- Spend less than you make. Always
- Ask about anything you don’t understand
- There is no such thing as job security in any industry
- Your personal residence is a place to live, not an investment. Stop watching HGTV
- Stocks tend to payoff because they are so volatile, not despite it
- Your mortgage broker is lying to you about how much house you can afford
- Never reach for yield. High dividend yields aren’t a good predictor of forward returns
- All fees erode investment performance
- Excess is never permanent
- You will never have enough money
- If it depreciates then avoid paying interest on it (I’m looking at you, cars)
- You don’t have to be rich to invest but you must invest to be rich
- Invest in your mind and your skills
- Splurges bring the greatest happiness and then diminishing returns
- If it seems too good to be true, it is. Full stop
- Einstein never said that thing about compound interest (see below). But it’s accurate nonetheless
- If you’re excited about an investment, it’s probably a bad idea
- A penny saved is more than a penny earned
- Market corrections come more regularly than birthdays – expect them
- Forecasting is for weather professionals – and even they suck at it
- The only sure thing about stocks is that there are no sure things
- A raise in your income shouldn’t mean a raise in your lifestyle
- Your life is a better benchmark than the Index
- There is an inverse correlation between performance and time spent watching financial news
Props to Khe Hy @khemaridh for the thought experiment
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