Here are 10 commandments for wealth and investing from Money Talks News and my responses to these ten commandments. Enjoy!
1. Thou shalt live like you’re going to die tomorrow, but invest like you’re going to live forever. In short, enjoy your life to the fullest every day â“ live like you’re going to die tomorrow. But since you’re probably not going to die tomorrow, plant part of your money in quality stocks, real estate or other investments; then hold onto them.
2. Thou shalt listen to thine own voice above all others. When you hear someone promising a simple solution to a complex problem, stop listening to them and start listening to your own inner voice.
3. Thou shalt covet bad economic times. Wealth is created when times are bad, unemployment is high, problems are massive, everybody’s freaking out, and there’s nothing but economic misery on the horizon.
4. Thou shalt not work. When it comes to work, you should try to do something that you regard as so fulfilling that you’d do it even if it didn’t pay anything.
5. Thou shalt not create debt. Paying interest is nothing more or less than giving someone else your money in exchange for using theirs. Rule of thumb: To have as much money as possible, avoid giving yours to other people.
6. Thou shalt be frugal â“ but not miserly. The key to accumulating more savings isn’t to spend less â“ it’s to spend less without sacrificing your quality of life.
7. Thou shalt not regard possessions in terms of money, but time. You go to the mall and spend $150 on clothes. But what you spent isn’t just $150. If you earn $150 a day, you just spent a day of your life.
8. Thou shalt consider opportunity cost. This is related to the commandment above. Opportunity cost is an accounting term that describes the cost of missing out on alternative uses for that money.
9. Thou shalt not put off till tomorrow what thou can save today. Fortunes are rarely made by investing big bucks, nor are they often made late in life. Wealth most often comes from starting small and early.
10. Thou shalt not covet thy neighbor’s stuff. Decide what really makes you happy, then spend â“ or not â“ accordingly. When your friends make an impressive addition to their collection of material possessions, be happy for them.
Here’s my take on these:
1. Work-life balance is key to financial success as well as a high quality of life. Hold onto your investments and invest on a regular basis. Keep a big picture of your financial goals.
2. I read various blogs and financial papers, but when it comes down to it, I trust my gut with my personal finances. And it’s turned out really well so far.
3. When the market crashes, buy buy buy! Most say market timing doesn’t work, I disagree. Market crashes, you invest, seems simple to me.
4. Do what you love. Studies have shown this is how you maximize your earning potential. Excel at something you’re naturally good at. Simple as that.
5. Debt sucks, just don’t do it (unless it’s for a house).
6. “The key to accumulating more savings isn’t to spend less â“ it’s to spend less without sacrificing your quality of life.” I like this way of thinking.
7. Before a purchase, do some quick math to see how many hours you would need to work to buy the item. This has helped me avoid many stupid purchases.
8.Opportunity cost is everything. Could you get more out of your dollar buying/investing something else? Food for thought…
9. Yup, time is on your side. The sooner you invest, the higher your returns will be in the long run!
10. Ignore your neighbors. Focus on saving more than you spend, regardless of what other people are doing around you.
-JE
Written by Jon the Saver
