Here is the first annual Mighty Investor Uber-post on money, investing, and career. One Post To Rule Them All…..
Frugality is a key plank to building wealth and a life where you have more control over your how you spend your days. You’re not cheap, just smart. However, be careful not to slip into a mindset of extreme scarcity. One way to avoid this is to regularly and intentionally be generous with your time, money, and attention. Giving and generosity don’t have to be about a lot of money, it can be service as well.
Keep an eye on the big purchases. Unless you have at least seven figures in liquid net worth (and even then probably not), buy used cars. This is one of the easiest ways to jumpstart your financial life while hardly impacting your overall quality of life at all. It’s a no-brainer. If you have no assets and are purchasing new cars on credit, you might want to brush up on your 9th-grade math…..
Ride the trailing edge of technology into financial bliss.
Be smart about your smartphone, and cut out the landline if you can.
Clothes. If it syncs ok with your style, be a bit alternative. It’s way cheaper. In my experience, confidence and a sense of purpose are as or more attractive than BMWs.
Think Hard About Your Career – Target Elite Institutions
You will be influenced by the organization you associate with; so be thoughtful about whom you associate with. Personal examples: the Charles Schwab Corporation influenced me to not trust people who work in finance based on commission and to truly focus on only doing what is best for the customer. The U.S. Department of State taught me the power of indirection and sometimes not responding; it also taught me the bad habit of gossip (since discarded).
If you are not entrepreneurial, think about associating with a monopoly and/or elite organizations. Think Google, Microsoft, Apple, Amazon, Facebook, or the U.S. Government. Don’t like the word monopoly? Read Peter Thiel’s Zero to One.
It’s not all about “follow your bliss” and “listen to your heart.” Yes, do both!, but use your head as well. Before you quit that job to go become an entrepreneur, can you negotiate a leave without absence rather than burning all your bridges? Think in terms of risks and rewards, limiting downside risks while maximizing upsides.
Start Investing Now
Start investing as soon as possible with a small amount of money. Even $100 makes sense to start with, and–of course–a thousand dollars will seem like a lot of money to someone at the beginning of their career. I would suggest investing with Vanguard. It is a trustworthy company and should be able to provide you with a fair amount of information. The key is to start getting experience as soon as possible.
Riding through bear markets is incredibly important to learning to be an investor. It is best learned by doing, and best learned by doing before one has significant assets at stake. Remember: buying assets at the right time can generate tremendous value in the decades to come.
If you don’t know how to invest, read this book. It will give you the basics and help get you started. If you venture beyond index investing, unless you are a professional investor (and even then), you will likely get yourself in trouble. (And remember, if you don’t know what you are doing or aren’t comfortable, talk to a financial advisor before doing anything.)
Investing Is More Than Just Buying Financial Assets
If you don’t have the funds to buy financial assets like real estate or stocks, that’s ok. You can still start investing. Invest in your health–take a walk, eat better, learn a new skill, get to work earlier and impress your boss. This is about a mindset. A mindset that thinks long-term and believes you can build the life of your dreams.
Dial It Up While You Are Young
If you can pull it off, dial up the savings and investing while you are young. The younger the better. Here are a bunch of things to consider: life with your parents for a year and SAVE–save for a down payment, to start your Roth IRA, to pay off school loans, whatever. Find a way to purchase a place to stay while you are in college and then have your roommates cover all your housing costs while in school. You can still have fun. Do a cross country trip, but camp they whole way. Remember: where you end up in your forties is a function of the cumulative decisions you make in your twenties and thirties. Your network will be very valuable.
If you aren’t super young, don’t sweat it. I’m not either ;). But remember that taking action is what will move the dial of your life.
Shoot For Financial Independence, Not Retirement
Have fun, AND remember that money is a means, not an end.
Oh yeah. Extra-ordinary behavior leads to an extraordinary life!