10 Types of Friends Who Are Costing You Money

10 Types of Friends Who Are Costing You Money

By Tim Lemke

Our friends are some of the most important people in our lives. But have you ever considered the impact they have on your finances?

Some friends can suck money from your wallet, even if they don't intend to. And because they're your friends, you may not even notice.

Consider whether yours fall into any of these categories of friends that cost you money.

1. The Leech

He's more than just cheap. He's a moocher. He's always asking to borrow money. He raids your fridge, and if you go out to eat, he always insists on paying just half the check — even if he ordered more. He wants you to spot him his share of the monthly rent and promises to pay you back — but you know he won't. He'll even "borrow" books and DVDs that you'll never see again. You need to draw a hard line on what you'll do for this friend. Otherwise, you'll both end up suffering financially.

2. The Big Spender

If you go to a baseball game together, they insist on getting tickets behind home plate instead of in the bleachers. When you suggest a weekend of camping, they push for a week of skiing in Aspen. Perhaps this friend is wealthy and has a good chunk of disposable income.

Or, perhaps they just love to spend and hate to save. Either way, keeping up with their lifestyle is making you go broke. You like this friend because you enjoy his or her company, but you must politely find a way to spend time with them on more frugal terms.

3. The Bad Association

He's always getting in trouble, and you're often dragged in his wake. He's the guy who shows up with weed at parties, or gets into fights at clubs. You can try your best to be on the straight and narrow, but just being around him can put you at risk for legal trouble.

And even if your criminal record stays clean, your social media profile might not. Think you're due for a raise at work? You better hope the boss doesn't see the drunken Instagram pic your friend tagged you in.

4. The Awful Entrepreneur

She always has a new idea for something that will change the world, and all she needs is some money to get it off the ground. Maybe it's a new mobile app to help you brush your teeth, or a new restaurant specializing in gourmet scrambled eggs.

You admire her entrepreneurial spirit, but the truth is that she has neither the business sense nor the dedication to get rich from any of these schemes. It may be tempting to lend money to friends for their business ventures, but don't let your friendship skew your assessment of whether the investment makes good financial sense.

To continue reading, please go to the original article here:

http://www.wisebread.com/10-types-of-friends-who-are-costing-you-money?ref=seealso

No Such Thing as Enough Money

No Such Thing as Enough Money

Jacob Schroeder   Oct 27, 2021

How much money is enough?

It’s a philosophical money question that often arises out of discontent. We see someone of substantial means, like a celebrity, live a troubled life. Or, we ourselves experience great fortune yet feel unhappy.

It makes us wonder where the finish line is, the point when you can stop striving for more and settle into a life of satisfaction.

There are some great financial blogs that provide good answers, such as here and here. And then there are a variety of books that tackle this question in their own ways: Ego Is the Enemy, The Last Lecture, the Bible, to name a few.

Another book that resonates with me, perhaps because of its instructive format, is How Will You Measure Your Life? by the late Clayton Christensen.

He comes to the startling realization:

“I had thought the destination was what was important, but it turned out it was the journey.”

That to me is the answer to the question. Though it is, in a way, a non-answer. As with many of life’s mysteries, there is no definitive conclusion.

There is never enough money.

Don’t get me wrong. I don’t mean that you can always use more money to achieve a perfect life. Rather, I mean the exact opposite.

No amount of money will insulate you from suffering.

This week Elon Musk’s wealth jumped by $36 billion in a single day, bringing his net worth close to $300 billion. Yet, even he has experienced some very public setbacks, including the tragedy of losing his first child.

“The race is not to the swift or the battle to the strong, nor does food come to the wise or wealth to the brilliant or favor to the learned; but time and chance happen to them all.” (Eccles. 9:11)

There is no such thing as enough money, as there is no destination of absolute happiness. It’s all about simply having the capacity to notice the truly joyful things along the journey.

To continue reading, please go to the original article here:

https://rootofall.substack.com/p/no-such-thing-as-enough-money

Four Things That Make Money Meaningful

Four Things That Make Money Meaningful
Jacob Schroeder   Nov 13, 2020

Behind the long braids of barbed wire and tall machine-gun towers of Dachau came the unmistakable sound of laughter. A transport of prisoners from Auschwitz had just arrived, and they were joyful. 

To me, this was the most affecting scene in Viktor Frankl’s book, Man’s Search for Meaning, about his physical and spiritual survival in Nazi death camps. He and his fellow captives became elated upon realizing they had been relocated to a camp without a chimney. As he writes: “We laughed and cracked jokes in spite of, and during, all we had to go through in the next few hours.”

Even in the darkest periods of mankind, fleeting moments of felicity could be found. Throughout the book, Frankl details what gave him a sense of meaning – art, humor, work, camaraderie – which helped him carry on over his several years in captivity.

As people tried to take away his humanity, he abided by the very thing he believed makes us human: “[A] human being is not one in pursuit of happiness but rather in search of a reason to become happy…through actualizing the potential meaning inherent and dormant in a given situation.”

Whether you believe it is the pattern recognition system in our brains or some deep ineffable cosmic conscious, it is hard to deny we hunger for meaning. And regardless of your circumstances, you need not go far to find it.

So, if there is meaning to be found in everything, what about money?

How we use money can be considered an expression of what we consider meaningful. Although it is easy to succumb to societal pressures and spend it on status symbols that provide no meaning at all.

It’s why any financial adviser worth a ***** will tell you to concentrate on your values, the things that truly give your life meaning. Those things help you use money not to build wealth for wealth’s sake but build life satisfaction. What good is money if you feel empty?

What is meaningful to you, may not be to me; and what is meaningful to me, may not be to you. However, there four things that often involve money and that various studies show are where most people tend to find meaning in their lives.

1. Family

When I look at my bank statement, I can separate expenses into categories like entertainment, food, transportation, etc. But underlying about 90% of them is one thing: family.

Perhaps, you can relate.

To continue reading, please go to the original article here:

https://rootofall.substack.com/p/four-things-that-make-money-meaningful

Sam Bankman-Fried vs. The Match King (Enigmatic Charlatans Are As Old As Time)

Sam Bankman-Fried vs. The Match King  (Enigmatic Charlatans Are As Old As Time)

Posted November 13, 2022 by Ben Carlson

“Everything in life is founded on confidence.” – Ivar Kreuger

On October 28, 1929, Swedish businessman Ivar Kreuger appeared on the cover of Time Magazine.

He was one of the most talked about people in the United States at the time because he was rich, powerful and mysterious. Kreuger controlled three-quarters of the production and sales of matches, owning more than 200 match factories in 35 different countries all around the globe.1

The Match King, as he was called, owned a private island in the North Sea and apartments all over the world. He was friends with actress Greta Garbo and an advisor to President Herbert Hoover. Kreuger played a prominent role in the Nobel Prize ceremonies and had business dealings with world leaders and prime ministers.

The man was treated like a celebrity.

There were even plans to use his story to depict the American dream in a full feature-length film. That movie never saw the light of day because he shot and killed himself shortly thereafter as his empire of fraud came crumbling down in the Great Depression.

Before it all came to an end, he created one of the biggest business empires in the world.

Kreuger’s take-no-prisoners approach to business quickly allowed him to turn his match company, International Match Corporation, into a monopoly in the space.

Many countries were cash-strapped from their World War I debts. So Kreuger’s strategy for world domination of the match industry was to loan money to needy countries at favorable terms so government officials would allow him to buy up the match companies and factories within their borders.

The problem is International Match was only getting 6-8% in interest on those loans while Kreuger’s financial holding company was paying out double-digit dividends to investors, upwards of 15-30% in some cases.

It doesn’t take a genius to understand that spread does not make for a sustainable business model. But Kreuger was a master at deception when it came to the financials of his various holding companies.

He was the only one who knew what the actual profit and loss numbers looked like for International Match and all his various financial holding companies. In fact, Kreuger created some four hundred different off-the-book conduits to move money around and hide what was really going on.

He was so good at hiding what was really going on that his board and investors had no clue what was really going on. In fact, they had total faith in the Match King because he was so well-connected politically.

Percy Rockefeller, the nephew of John Rockefeller, was a member of the board of directors. Rockefeller gushed to other board members, “He [Kreuger] is on the most intimate terms with the heads of European Governments. Gentlemen, we are fortunate indeed to be associated with Ivar Kreuger.”

Little did Rockefeller know that Kreuger faked calls to prime ministers and presidents to prove how powerful he was.

He had some relationships but not nearly as many as his board thought.

 Kreuger’s match business was on the way out as a profitable business once electricity became more ubiquitous but the stock market was on its way in as all sorts of new and exciting financial products were created during the roaring 20s.

To continue reading, please go to the original article here:

https://awealthofcommonsense.com/2022/11/sam-bankman-fried-vs-the-match-king/

How to Stop Carrying Too Much Financial Anxiety

How to Stop Carrying Too Much Financial Anxiety

Jacob Schroeder   Mar 16, 2021

Your heart starts racing when a credit card rep calls about a payment you accidently missed, and then you turn on the news to see the stock market plummeting 10%, so you log into your 401(k) account in a panic as you berate yourself for not saving more and then wonder whether to sell your stocks to stop the bleeding, which reminds you of John from accounting who told you weeks ago to buy bitcoin, which is, of course, up 5,000%, and you just know he's going to gleefully boast about it at work tomorrow, and since his son plays with your son on the same soccer team, you suddenly remember that you need to spend another freaking $100 on new cleats, along with league registration fees, but you're tired of buying all this sports equipment because you don't even know where to store it, which is one of the reasons why your partner wants to move into a larger home in that one neighborhood everyone wants to live in, except you worry it's too expensive, but now you realize, after several tense arguments, you may have to surrender, though what you really would rather do is just run away and live in an apartment by yourself curled up under a warm, safe weighted blanket.

Any of it sound familiar?

There are certain financial situations when feeling anxious is a rational response: loss of a job, stock market crash, high unexpected expense.

This article is not about those. In a time of elevated financial FOMO (fear of missing out), many people may suffer from self-induced financial anxiety.

We are anxious creatures. Some psychologists suggest anxiety is a by-product of our transition from hunter-gatherers to sedentary citizens. After the agricultural revolution, we started to spend much more time thinking and worrying about the future. The problem is that we often worry more than necessary, our thoughts high-jacked by innumerable possibilities that never come to pass or undesirable situations that are never as bad as we feared.

Seemingly, nothing makes us more anxious than money.

Money-related issues are the death knell of love. Heck, some of us fear running out of money more than death itself. And it doesn't matter if you're rich. According to a Northwestern Mutual study, 85% of Americans reported feeling financial anxiety, spanning all levels of income, race and gender -- and that's before the pandemic.

Financial anxiety is unavoidable. We suffer because we want. Anything you want to achieve in the future is going to cause some friction in the present. But that doesn't mean you should carry more than necessary.

"The heaviest burdens we carry are often the thoughts in our own head."

To continue reading, please go to the original article here:

https://rootofall.substack.com/p/how-to-stop-carrying-too-much-financial-anxiety

5 Friend Types That Can Hurt Your Finances

5 Friend Types That Can Hurt Your Finances

By Aja McClanahan

Your inner circle of friends can have a direct impact on many areas of your life, including your financial behavior. According to a 2014 study from the Journal of Consumer Research, peers can influence you to make certain decisions.

You can even bond with someone over decisions to abstain or indulge in certain activities. The study found, for instance, that friends bond over small shared indulgences like eating chocolate, but were more inclined to abstain as the stakes were raised.

Because of this, you want to be especially aware of how your friends might be influencing your financial behaviors. You don't necessarily have to dump friends who negatively affect your spending, you just have to know how to handle your interactions so they don't cause you to make poor money decisions.

If you think it's time to take stock of your friend circle for the sake of your wallet, here are some personalities to watch out for.

1. The risk-taker friend

This person takes a lot of risks when it comes to their money. They aren't necessarily careless, they just tend to leap without looking. Sometimes they win and sometimes they lose. If you're not careful, these seasoned risk takers can take you along for a ride you're not ready for.

The excessive risk-taker tends to be impulsive, and seeing them win can influence you to make similar choices. This friend may encourage you to make major decisions without properly weighing all the risks involved.

How to handle them

Take their "bright ideas" with a grain of salt, but don't shun everything they conceive. They can be good business partners when tempered with caution. Sometimes, you won't be able to talk them out of anything, but you can definitely leverage their passion for risk taking if you find yourself being too conservative for your money goals.

2. The spendthrift friend

This friend spends every single penny that comes into their hands. They take expensive trips, show up at exclusive parties, and seem to be forever shopping and eating at fancy restaurants. In fact, whenever you two hang out it involves spending obscene amounts of money.

The spendthrift is not always broke. They may actually have the money to support this lifestyle; you, however, do not. One minute with the spendthrift and you could easily find yourself swept away by the sheer excitement of spending more money than you can afford.

How to handle them

To continue reading, please go to the original article here:

http://www.wisebread.com/5-friend-types-that-can-hurt-your-finances?ref=seealso

5 Obstacles You Can Expect on Your Journey to Financial Freedom

5 Obstacles You Can Expect on Your Journey to Financial Freedom

By Denise Hill

The road to financial freedom is paved with good intentions — and littered with skid marks from those who started out, but opted for an easier path. It can be a lonely, winding road that has potholes, roadblocks, and detours. The best way to ensure any journey is successful is to properly prepare.

Here are a few pitfalls you can expect to run into on your way to financial freedom, and what you can do to cope.

1. You'll get tired

Living a life of frugality can be exhausting. Always pinching pennies, weighing options, tracking expenses, and telling yourself "no" can get old quick. Your ability to remain on the financial straight and narrow is directly proportional to your level of tolerance.

Some people can go months without new clothes, drive the same hoopty for years, take one vacation every decade, and be perfectly happy. Others cannot. Find a pace and intensity that fits your personality and level of discipline. Give yourself the wiggle room you need to succeed.

A great way to combat the fatigue that will pop up along your journey is to take breaks. Allow yourself the opportunity to relax and enjoy the view from time to time. Set financial goals that secure your future, but also keep you happy.

Plan to take a vacation, save up for a mini shopping spree, and blow a little cash every once in a while just hanging with friends. The key is to pace yourself. This journey is a marathon. (See also: Yes, You Need "Fun Money" in Your Budget)

2. You'll feel lonely

Forging a path toward financial freedom goes against the grain of our current society. You are bombarded with messages that tell you that you deserve the best no matter the cost. You are worth it. And you only live once, so you might as well live it up now. You are encouraged to indulge yourself.

Living a lifestyle contrary to the popular consensus can be extremely lonely. It can be hard to find people who support your money management value system. And not having someone you can talk to and who understands the dilemmas that come with financial freedom can leave you feeling isolated. You may even find yourself tempted to abort your mission and follow the crowd.

Before you give up and join the ranks of the financially irresponsible, consider this — you are not alone. There are others like you out there. If you're surrounded by those who do not share your passion for financial independence, you must look for those who do.

To continue reading, please go to the original article here:

http://www.wisebread.com/5-obstacles-you-can-expect-on-your-journey-to-financial-freedom

How Our Perceptions of Time and Money Change as We Age

How Our Perceptions of Time and Money Change as We Age

BY RETIRE BEFORE DAD

Our perceptions of the value of time and money shift as we age.   In early adulthood, time is abundant, while money is scarcer. We want more money and are willing to sacrifice our time to get it.

By middle age, a thriving career helps us earn more, but job and family obligations consume our time. Life is expensive, and working middle-aged people never seem to have enough time or money.

Approaching retirement, we’re more willing to spend money to save time. Why mow the lawn when you could be playing golf or Bridge? And what good is all that wealth if we have no time to enjoy it?

Time was valuable all along.

But as we age and grow wealth, we learn to appreciate time more because we have less of it to live.

The sooner we learn, the sooner we can shift our focus to what’s most important.

Important of time vs. importance of money chart.

The crossover point — when we fully embrace time as the superior resource and prioritize accordingly — is realized at different stages of life for different people.

It may be gradual or sudden.

The approach to retirement is a typical time when priorities shift.

Does retirement change our perception of the value of money?

The standard path of attaining an expensive education and then working full-time for the next four decades to retire at 65 is still predominant.

But that’s Baby Boomer gold-watch thinking.

We have more options.

Time vs. money purpose?

Maybe when we find our true purpose in life, we modify priorities to elevate the importance of time, relationships, and our impact on the world over income and wealth.

For those with a clearly defined purpose, time spent not fulfilling that purpose is wasted time.

There can be prosperity in purpose. Finding work you love that serves others and makes you wealthy might be the holy grail.

Diagnosis as the cross over point.

A serious health diagnosis, accident, or death of a loved one might change your feelings about time and money too.

Imagine a doctor telling you there are only a few months left to live.

Life’s priorities would shift immediately.

 To continue reading, please go to the original article here:

https://www.retirebeforedad.com/time-and-money/

Type I and Type II Charlatans

Type I and Type II Charlatans

Posted December 27, 2020 by Ben Carlson

Pockets of the market are flirting with silly territory.

SPACs, IPOs, and electric vehicle companies are all sprouting up like weeds.

I’m not intelligent enough to sort through the winners and losers in these areas but the fact that there are currently winners means there will be a flood of losers to follow. That’s how these things work. When speculative investments are in demand, the supply ramps up to meet it.

And many of those losers will be pushed relentlessly by hucksters and charlatans who flock to rising markets like me to a new Tom Cruise movie.

Charlatans tend to flourish when some or all of the following characteristics are present:

When there’s an “expert” with a good story

When greed is abundant

When capital becomes blind to risk

When individuals begin taking their cues from the crowd

When markets are rocking

When innovation runs rampant

There are two types of charlatans you need to watch out for when trying to avoid getting taken advantage of during these types of market environments.

When testing a hypothesis using statistics, there are two types of errors a statistician can make. A type I error is when you reject a null hypothesis that is actually true. A type II error is when you accept a null hypothesis that is actually false.

This meme is the best explanation of this concept I seen:

Type I charlatans are the visionaries who are more or less sincere but wind up ruining their investors anyway because they take their ideas to the extreme or fail to account for the unintended consequences of their ideas.

 These false-positive charlatans are so passionate that it becomes difficult for their victims to see any downside. When you combine intellect, passion, and people in search of money and/or power, it’s easy to become blinded to potential risks.

And once a Type I charlatan gets a taste of success, it’s tough to pull in the reins when things go wrong.

 To continue reading, please go to the original article here:

https://awealthofcommonsense.com/2020/12/type-i-and-type-ii-charlatans/

The Golden Age of Fraud is Upon Us

The Golden Age of Fraud is Upon Us

Posted April 27, 2021 by Ben Carlson

A 30-something low-level actor created a business plan that would buy the rights to cheap movies and turn around and sell those rights to HBO for audiences in Latin America.  The investors backing the project were promised returns of 15% in just 6 months.  No bad in an era of 0.25% savings account yields.   Investors forked over more than $690 million to bankroll the rights to these films.

So what’s the catch?   The movie contracts with HBO were fakes, the business plan was a hoax and the entire ordeal was a Ponzi scheme where new money paid off previous investors. The money was used to provide a lavish lifestyle for the architect of the fraud, Zachary Horowitz.1

One investor claimed to have “99% of his and his family’s money” invested in Horowitz’s scheme.

*******

Thodex is a cryptocurrency trading platform in Turkey. Last week it was reported the 27-year-old founder of the exchange took a flight to Albania.

He took with him $2 billion from more than 30k clients.

Last month the company brought in hoards of new clients by offering free dogecoin to anyone that signed up.

Whoops.

*******

I don’t know if this SCAMcoin actually happened or if it’s just a social media thing but it wouldn’t surprise me if it’s real: https://twitter.com/i/status/1385365742506364929

If Charles Ponzi were alive today, I have no doubt that he would be able to raise capital from investors, probably in the form of a SPAC. Many investors would laud him for being a genius as he bilked investors out of millions of dollars.

When I was researching the history of financial scams for Don’t Fall For It the one thing that jumped out above all else is how similar financial frauds are across time and place. They typically involve new technologies, people with extraordinary sales skills and the insatiable human desire for get-rich quick schemes.

Despite the fact that people have been getting duped by hucksters and charlatans for centuries, there was one period that kept coming up over and over again in my research — the 1920s.

It was the golden age of financial fraud.

The Roaring 20s had everything a con-artist looking to dupe people out of their money could ask for — innovation, new financial products, a booming economy, rising markets, new and exciting technologies, loose lending standards, new communication tools and people getting rich all over the place.

To continue reading, please go to the original article here:

https://awealthofcommonsense.com/2021/04/the-golden-age-of-fraud-is-upon-us/

The Art of Money - Turning Financial Success Into A Creative Pursuit

The Art of Money - Turning Financial Success Into A Creative Pursuit

Jacob Schroeder

What do you consider the act of ‘making money’? Is it an act of accounting and measuring? Or, is it an act of imagining and contemplating? Our finances involve numbers and data, but they’re intractably tied to our personal ideas, experiences, feelings and behaviors – intangible things you can’t formulate in a spreadsheet. Therefore, to manage the human side of money, it’s better to think more like an artist than a scientist.    It’s a shame many famous artists had financial troubles.

Johannes Vermeer is said to have left behind 10 young children, a house full of paintings no one wanted and enormous debts, causing his wife to declare bankruptcy.

Mozart wracked up massive amounts of debt, too, to feed an extravagant lifestyle. Not to be out done, Oscar Wilde lived far beyond his means, until he eventually fell into poverty and supposedly spent his last bit of money on booze. When he took his own life, Vincent van Gogh was poor and destitute.

It’s a shame, because some principles great artists follow to make art could also apply to making money.

Art and money share more similarities than we like to think. Money, like art, is a means of self-expression; it helps you turn the life you imagine into reality. They’re both deeply personal. There is no one right way to sculpt a Greek goddess or invest in stocks. Most of all, money offers a lot of insights into human behaviors and sensations.

It is often those human elements that lead to financial problems, but that also give our financial decisions meaning. Therefore, when trying to create a financially successful future, we may need a little more right-brain than left-brain thinking.

Take it from Andy Warhol, an artist who loved to blur the lines of commerce and culture, who declared:

“Making money is art and working is art and good business is the best art.”    Andy Warhol

Why it helps to think of money as more art than science

Is personal finance an art or a science?

The juncture of art and money has gotten most attention as it relates to investing. Investor Howard Marks said:    “Investing, like economics, is more art than science.”

Why?

Investing encapsulates the vagaries of human nature in the face of uncertainty. There is an element of personal intuition that guides the algorithms. That element of variance and uncertainty is what Barry Ritholtz expands upon in his definition:

“Investing is the art of using imperfect information to make probabilistic assessments about an inherently unknowable future.”

To continue reading, please go to the original article here:

https://rootofall.substack.com/p/the-art-of-money?s=r