.Who Are You After Financial Independence?

Financial Independence, FIRE, Money and Life by Vicki Robin

Your Identity Closet: What shall you wear now that you are free?

When we discover the possibility of financial independence, we change our identity from working stiff to working towards financial freedom. It affects every choice. Not spending money isn’t deprivation. It’s saving our lives.

Saving money is not longer impossible, it’s easy. Getting out of debt is no longer a goal too far, it’s a fierce commitment to liberate ourselves from debt slavery. FI has nothing to do with being dutiful, with putting on a costume that doesn’t fit. It’s the most exciting prospect on the horizon and every actions conforms to it.

In high school all three sororities asked me to join – three different flavors of girls to giggle and gossip with. I must have joined one because my actual memory isn’t of joining. It’s of dropping out in protest to some clique cruelty. When offered options A, B or C – I chose D. Life went on. I didn’t make a habit of rebellion. In fact, I developed quite a High School resume of clubs, groups and honors. Yet I’d learned that you can step outside any box you want to – and survive.

.5 Pieces of Dumb Financial Advice That Most People Believe

By The Penny Hoarder Staff

Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners. When it comes to money, everyone likes to put in their two cents. Oh, you should definitely buy and not rent. Stay away from credit cards; they’re evil. Why are you so worried about your credit score? It doesn’t matter.

There’s a lot of — quite frankly — dumb advice floating around out there, and it can be difficult to figure out what’s up and what’s down. Well, we’re here to set the record straight. Here’s all the dumb money advice out there — and what you should do instead.

Dumb Advice #1: Put Your Money in a Savings Account

You’ve probably heard the best way to grow your money is to stick it in a savings account and leave it there for, well, ever. That’s bad advice.

.The Three Sides of Risk

Aug 8, 2020 by Morgan Housel

In investing, the average consequences of risk make up most of the daily news headlines. But the tail-end consequences of risk – like pandemics, and depressions – are what make the pages of history books. They’re all that matter. They’re all you should focus on. We spent the last decade debating whether economic risk meant the Federal Reserve set interest rates at 0.25% or 0.5%. Then 36 million people lost their jobs in two months because of a virus. It’s absurd.

I grew up ski racing in Lake Tahoe. I was on the Squaw Valley Ski Team, and it was the center of my life for over a decade. At a conference a few months ago I was asked what skiing taught me about investing. This was on stage, where you can’t ponder your answer – you have to blurt out whatever you can think of. I didn’t think skiing taught me anything about investing. But one incident came to mind.

“Well, let me take this to a dark and tragic place,” I said before telling a group of 500 strangers a story I hadn’t talked about much in almost 20 years. A dozen of us had grown up skiing together. Most had known each other since we were young children. By 2001 we were in our late teens, having spent the majority of our waking hours over the previous decade never far from each other. We skied six days a week, 10 months a year, spending summers on the glacier of Mt. Hood, Oregon and in New Zealand, where the seasons mirror our own. Skiing took precedence to everything.

.How To Get Money To Stick To Your Fingers

August 9, 2020 · by The Escape Artist

When I was young and in my first proper job, one of the senior people described a new client that he was excited to be working with. He explained the reason by saying: “they’re the sort of person for who money just sticks to their fingers”.

Being an inexperienced idiot, I didn’t know what he meant. Perhaps that person had jam on his hands and sticky fingers? Perhaps he worked in a glue factory?

Er, no. What my colleague meant by that was that the person (a successful entrepreneur / businessman) had a Money Blueprint that meant they couldn’t help but get rich(er). They had a set of beliefs, habits and skills that meant that, all things being equal, they would likely go on to accumulate more wealth. There are no guarantees in life but a helpful Money Blueprint is…well, helpful to getting money.

.How to Talk to Your Financially Irresponsible Partner

Trent Hamm, Aug 3, 2020 Founder of The Simple Dollar

My wife Sarah and I have a good financial relationship. Sure, there are times when I feel like she spends too much on things like crafting supplies and extra camping gear, and there are times when she feels like I spend too much — usually on Kindle books or tabletop game items. We’re not perfect by any means, but we’ve reached a point where we’re clearly headed toward our shared goals and we recognize that we both are imperfect and make mistakes sometimes.

It wasn’t always this way. There were many times earlier in our relationship, particularly before we started taking our finances seriously, where we both perceived the other person as being financially selfish. I’d see Sarah getting tons of expensive coffees and believe in my head that she was the one being selfish and causing our financial problems, while she’d see me with a new video game or an armload of new books and believe it was me.

The feeling that your partner is being financially selfish and the cause of your shared financial problems is a common one, and it’s a tough issue to tackle. Often, people don’t know how to tackle that sense of a partner’s selfishness, so they either sit on that negative feeling until it festers and grows into an outburst, or they try to immediately address that feeling in a clumsy way and cause a fight. Obviously, neither one of those outcomes is a healthy outcome.

.“Personal Finance Is More Personal Than Finance”

Personal Finance Financial Planning Justin / August 2, 2020

“Personal Finance Is More Personal Than Finance” – Tim Maurer

A couple of weeks ago Morgan Housel joined The AGC™ for one of our weekly webinars. During the conversation, he shared what he called his “worst financial decision, yet his best money decision”. The short version of this decision is he and his wife aggressively paid off their mortgage. You might initially question why he might consider this his worst financial decision–paying off debt is typically a good financial goal and milestone.

However, with mortgage rates at historical lows, spreadsheets and financial planning software would suggest investing the dollars that would be used for additional payments instead of paying off a mortgage; the long term expected return of a diversified portfolio is greater than current mortgage rates. Yes, I’m aware that past performance does not predict future returns, but even the most skeptical investor has to believe the long term return of a diversified portfolio should do better than the interest rate on a mortgage today.

.Don’t Be That Person

Adam M. Grossman August 2, 2020

THE TRICKY THING about investing is that there’s no single “right” approach. In an earlier article, I described the approach I favor—what I call the five minds of the investor, which involves being part optimist, pessimist, analyst, economist and psychologist.

But there are many other ways to be successful: You might invest in real estate, or follow a quantitative investment strategy, or invest in private companies. There are plenty of people who do very well with these approaches.

That said, there are also many investing styles that look like they might work, but often don’t. Want to fare well financially? Here are five common approaches to investing that you should probably avoid:

.Inheritance Tips So You Don’t Screw Up Your Child’s Life

Posted by Financial Samurai

If you’ve amassed a decent amount of wealth, you will likely want to leave some of it to your children. Let’s discuss some inheritance tips so we don’t screw up our children.

One of the reasons why my 30-year-old neighbor still lives at home with his parents is probably because he expects to inherit a boatload of assets. His parents’ home, alone, is probably worth about $2.5 million.

The great thing about my neighbor’s living situation is that his parents only come to visit during the weekends. His parents have another home in the North Bay. He also rents out one of the rooms to his friend.