Money – Must Be Funny

What? No ABBA fans here? Today I wanted to talk about something that I’ve mentioned surprisingly little on the blog for how much I love it in real life – money. That sweet, sweet green.

Now, I don’t want to talk budgeting because I really don’t have anything to add to that conversation. I have a budget, I keep track of all my expenses on a painstakingly detailed spreadsheet and there are millions of apps to help you out with budgets. Plus, my friend Rachal just released a comprehensive guide to creating your own budget on her blog, so if that’s your cup of tea, then begone to her blog post here.

What I want to cover is a concept called wealth building. I recently read an article discussing Jeff Bezos’s worth (founder of Amazon for those of you living under a rock), and the article put his worth at around $130 Billion. To put that in perspective for us peasants, $88,000 dollars to us feels like $1 to Jeff. I don’t know about the rest of you but I’d love to be able to throw around hundreds of thousands of dollars like it was coffee money.

However, there are only a couple of ways to really become wealthy. I’m not sitting on the next Amazon or Facebook idea at the moment, so the other major way I’ve been focusing on becoming wealthier is to make the money I do have work for me. I know it’s harder for my age bracket to feel like investing is a priority when the job market sucks so bad and rent is crazy, but the truth is – if you have Starbucks money, you have investing money.

I’m not going to go super in depth on investing strategies because 1. There’s a million of combinations, and 2. I wouldn’t exactly consider myself a strong investor just yet. But the point I’m trying to make is that so many of us are focused on saving ONLY. We want an emergency fund here, a future house fund there, but many people are only putting that money in an account for it to sit at the same value for years and years. A simple savings account usually has interest rates of less than one percent, and at our current young adult level, that means our money is literally only making a couple cents each year. The point of investing is so that the money that you’ve set aside makes money for you and you don’t even have to touch it.

Stay with me. Not all investing is making bets on the stock market, cryptocurrency, or being in real estate. There are simple accounts you can open with fiduciaries who will invest your money in a portfolio with a risk level you are comfortable with. A fiduciary is a firm that is required to act in their investors’ best interests.

So if you go ahead and start investing, you’ll probably make somewhere between a 2 and 10 percent return depending on your risk levels. Of course, you can get very lucky and make even more but even at 2% your money is going to grow way faster than just sitting in a savings account.

When I started investing, it was rather unrewarding. I didn’t have enough to dedicate to really see the difference, but now that I’m working with a few thousand dollars, those returns are starting to add up. And if we do the math, investing is the reason the rich get richer.  Let’s say they’ve got $100,000 sitting in investments. At 2% that is $2000 profit off of investments. If they’ve got $1,000,000 sitting there – that’s $20,000! And when you compound that interest, the number just grows and grows.

I’m going to stop with the math now since we all had to take basic accounting, but I take it I’ve made my point. The beauty of investing is that the money works on your behalf. There are risks with investing, of course, but they are surprisingly less drastic than the media and other authority figures have led us to believe. Just do some basic research.

One resource that was really good for getting started was Tony Robbins’ book Money: Master the Game. The first few chapters are a lot of motivational fluff, but if you really take notes and do some of the exercises, you’ll easily be able to build yourself a pretty comprehensive financial strategy.

The key to investing for me is to only invest money that I won’t miss too terribly. Obviously, as I dedicate more and more to my investment accounts, I would be livid if I lost ALL of it, but a 10% drop in the markets doesn’t phase me. Personally, I am in this for the long haul so any investments I make right now are with money I don’t need to live and wouldn’t miss if I couldn’t access it right away.

I have my simple savings fund set and my living expenses all worked out, and after all that I’m lucky enough to have quite a bit leftover to put into investments. One of my favorite investing ‘rules’ is to invest risky (risky here meaning more volatile investments, but with potentially higher rewards) while you’re young. Consequently, even if I lose every single cent of my investments, I’m young enough that I have time to rebuild. I also would make more money over my lifetime if I start young because of that whole compound interest rule we covered earlier. If I’m too risky when I’m older, it could be too late to recoup and I’d have to struggle for the rest of my retired life.

So while I might not ever reach Jeff Bezos levels of wealth, I think I’ll end up with more than enough if I stay on this track. Do some research for yourself, you might find that you like tacking zeros onto your bank account too 🙂

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Contrary to popular belief, millennials can have nice things like expensive toast AND have money for investments.

 

To Opine

This is going to be a short and sweet post since I’m currently sitting on my couch on a Sunday night stressing about all these work emails I just received, but dammit I committed to a post every Wednesday so I’ve gotta kick out this draft now.

Do me a quick favor and think about one of your most recent conversations. Did you talk about how you’ve been doing, and what you’ve been doing? Or maybe did it veer into likes/dislikes or maybe even heavier topics like current events? I basically covered every topic of conversation just now so unless you were having an intense philosophical interaction then your answer is yes. Chances are, you also shared an opinion at some point during that conversation. It may have been small like “Oh ew I could never eat that, cauliflower is disgusting,” or it might have been something heavier like “Lax gun laws in the United States are perpetuating a culture of violence and preventing accountability for violent actions.”

Sharing opinions is something that I have observed to be integral to United States culture in particular. Sure, people share their opinions in every other country as well, but the United States is obsessed with our first amendment, and thus our supposed right to say whatever we want, whenever we want.

Since I’ve had the opportunity to live in a couple different countries, I’ve noticed that no other culture is quite as aggressive about sharing their thoughts. You can get into a heated debate anywhere, but Americans seem fixated on their ability to share their opinion, ANY opinion, more so than others.

Don’t get me wrong, I don’t necessarily think this is a bad thing. In fact, people who don’t have strong opinions tend to bore me. PICK A SIDE PEOPLE. But that might just be my American showing. Personally, I immensely enjoy having conversations with people who have definite opinions because I have definite opinions.

Additionally, I would go so far as to say that nothing ever gets done by people who don’t have strong opinions. People in leadership positions often have polarizing personalities because they have strong ideas that maybe some people don’t agree with. Passive people rarely cause change. If you don’t even feel strongly enough about something to talk about it in normal conversation, you’re never going to shape the world to fit that ideal.

However, there is a limit to this opinion drenched, soapbox endemic that the American people love to court. Many people love to spout their opinion but don’t love to back it up. We’ve gotten lazy under the protection of free speech and we don’t bother to research and conduct our due diligence on our opinions.

In the end, I’m an American, and I am grateful for free speech. But I’m also grateful for the people in my life that taught me free speech is a responsibility and that I better know what I’m talking about.

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Waiting for your opinions