These are some of my best pieces of financial advice. They are tidbits I want to pass onto my children. I hope you may find them useful or inspiring, too. I will add to the list as things come to mind.
On the big picture
Both time and health are far more important than money.
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Believe you have “enough”, and you are already wealthy.
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What you earn and save over your lifetime matters more than what you earn in a single year. Don’t sweat an unexpected expense, the loss of a job, or a bad investment.
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Experiencing scarcity as a child can motivate you to do big things. It can also make you greedy. Be mindful.
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We all make financial mistakes. Learn from them and move on.
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Be trusting, except when it comes to your money. See Charles Ponzi, Bernie Madoff, Anna Sorokin, et al.
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We’re all playing an unfair game that favors the wealthy and powerful few. Knowledge is your best weapon.
On debt
Banks are a necessary evil; they are not your friends.
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You cannot be at peace if you owe a debt or someone owes a debt to you.
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Never loan money to family or friends. If you want to help them, give them a gift.
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Right or wrong, society equates good credit with good character. Play the game or bear the consequences.
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Do not borrow money you do not intend to pay back. But if life deals you a setback, remember that banks expect some loans to default. It’s just business.
On investing
The best investment you can make is in yourself.
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Your house is a home, not an investment.
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There isn’t a single person in the world who knows whether the stock market is going to go up or down. Anybody who claims otherwise has something to sell you.
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Since it began, the stock market has never lost money over a 20-year rolling period. Buy and hold.
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The old advice “if it sounds too good to be true, it is” still applies. (Even if you know someone who got lucky.)
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If it feels like a bubble, it is. You just don’t know how much bigger it will get before it pops.
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Ninety-five percent of investing advice is bullshit. The other five percent says to start investing early, buy low-cost index funds, and forget your account exists until you retire.
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There isn’t a person alive who doesn’t wish they started investing younger.
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Inflation is every investor’s enemy number one. Learn to respect it, then learn to beat it.
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Anyone who truly believes they’ve found the next Apple, the next Microsoft, or the next Tesla isn’t going to share that information (or even sell it).
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Good investing is painfully boring.
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Never check stock prices, especially when they’re down.
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Fear and greed will bankrupt you.
On work
Taking a job based on the salary alone is a one-way ticket to misery.
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Trading time for money is a terrible way to get rich.
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But getting paid to do something fulfilling can be a great way to spend time.
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Productivity declines rapidly after four hours of work a day.
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Ninety percent of the work we think we have to do accomplishes nothing. Learn to focus mostly on the ten percent that really matters.
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Being the boss is a lot harder than you think.
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A good boss develops employees until they no longer need a boss.
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Do not tolerate a toxic workplace. Do what’s necessary to get out of it; even if it’s terrifying.
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Everyone suffers from imposter syndrome sometimes.
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Confidence is just as important as competence, if not more so.
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Appearance matters. Dress well, even on Zoom.
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On Zoom, a neutral background and good lighting are everything.
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Arrive early for everything. You’ll never regret it, but you may regret being even a minute late.
On consumption
Our culture idolizes gross excess. Tuning it out is good for your wallet; it’s even better for your soul.
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You cannot judge a person’s wealth by their clothes, car or house. Don’t even try.
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Trying to impress other people is the stupidest reason to spend money.
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It’s true: Money spent on experiences leads to more happiness than money spent on stuff.
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Most of the stuff you buy today will someday become shit you want to get rid of.
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Like taking a drug, buying something produces dopamine. As with a drug, the rush wears off fast. Whether we realize it or not, most of us are consumption addicts.
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Consume in moderation, but know that it’s OK sometimes to splurge on things that bring you joy.
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You and your spouse may have different things that bring you joy. Tolerating each others’ spending is an important ingredient in a happy marriage.
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If you want to buy something, write it down and wait. If the thing costs more than you earn in an hour, wait a week. If it costs more than you earn in a day, wait a month. If it costs more than you buy in a month, wait six months. After that time, if you still want it, buy it.
On having money
Money can solve a lot of problems.
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But Biggie was right: Mo’ money, mo’ problems.
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Sometimes, a checkbook is the best tool in the toolbox.
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The best thing about having enough money in the bank is not worrying about how much the things you need cost.
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No, you’ve never seen a hearse with a trailer hitch. Spend your money — or give it away — while you’re alive to enjoy it.
On happiness
There are a lot of people richer than you who are less happy than you.
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If you’re unhappy even though you have a safe place to live, ample food, and a few dollars to spend on the things you enjoy, more money is not the answer.
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You can’t be unhappy about losing what you don’t have to begin with.
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Focus on how far you’ve come, not how far you have to go.
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There will always be someone with more than you. Comparison is a fast road to misery.
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Be generous. Expect nothing in return.
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If you are aware of your body, your thoughts, and your breath, you already have everything.
Fin