Take Action - How You Can Get Your Finances Back On Track
"Life rewards action, not intelligence.
Many brilliant people talk themselves out of getting started, and being smart doesn't help very much without the courage to act.
You can't win if you're not in the game." - James Clear
I recently saw a “financial wellness order of operations” summary on Twitter:
A list of 14 may be a bit much. But I recommend you prioritize and attack these six:
Get organized - How can you make progress on your financial journey if you don’t know what accounts you have, can’t log in, or you don’t know the purpose of each account. Get your house in order. Summarize your assets and debts and start tracking these at least annually.
Align Spending with Your Values: Usually spending is a reflection of your ego - we want to show people that we have money. But remember what Morgan Housel said, “Spending money to show people how much money you have is the fastest way to have less money.”
What do you love to spend money on? Prioritize those things and ruthlessly cut everything else.
Emergency Fund: There is no ‘magic’ number for an emergency fund. I recommend that you build up your short-term bucket with cash that you anticipate using within the next 12-months. Even if you don’t foresee major expenses, keep cash readily accessible to pounce on opportunities. A high-yield savings account can be a great tool here as you are getting paid to wait.
Employer Match: If you have a retirement account offered to you through work, you need to understand your employers match policy. At a minimum, you should be contributing enough into your retirement account to receive your company’s match. It always amazes me that people do not take full advantage of this. WE DO NOT LEAVE FREE MONEY ON THE TABLE!!
Taxable Brokerage Account: Once your emergency fund is established and funded, open an investment account. Don't let your money sit idle in a traditional savings account earning nothing. Use the stock market to help you work towards your medium-long term goals. Even if you don’t know what those are, focus on going in the right direction.
IRAs: If you and your spouse don’t have access to an employer retirement plan, than consider a traditional IRA for immediate tax savings. If your income is below the compensation limits to contribute to a Roth IRA, do it, like right now…
Most people know they should be doing SOMETHING with their money, rather than just letting it sit at a bank doing nothing.
But they aren’t sure where to start.
Or, they are always looking for a stock pick or some shortcut to accumulate wealth.
Stop wasting time and cut the shit.
Automate your savings and stay consistent.
Take risks, especially when you are young.
Be patient.
Surround yourself with good people.
Remember - we were all born to do something great. But a select few are willing to make the sacrifices and stay disciplined long enough to see tremendous results.
Don’t wait, take action today.
Disclosure: This material is for general information only and is not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
All indices are unmanaged and may not be invested into directly.
All investing includes risks, including fluctuating prices and loss of principal.