Here Is the Easiest Path to Build Wealth
In Today's newsletter:
Here Is the Easiest Path to Build Wealth
The best financial advice is what you will actually follow through on.
There’s often a huge gap between how you?should?manage your money and how you?will?manage your money.
Most people don’t like change.
Even if someone is deeply unhappy, they are resistant to making major changes to their day-to-day lives. Never underestimate the power of inertia—it’s part of human nature.
In this post, I explain one of the most undiscussed topics in personal finance; treating new money like it doesn’t exist, aka “reverse lifestyle inflation.”
How To Build Financial Resiliency
Financial literacy is only the tip of the iceberg of what’s required to manage money.
Early in your financial journey, financial literacy is basically all that matters. You need to learn how money works and build systems to help you track and invest your money, pay off debts and create and achieve financial goals like saving for your kid’s college education.
While there’s always more about specific financial matters to learn as the years go by—e.g., negotiating interest rates with your bank or salary with your employer— it doesn’t take all that long (relative to how long you live) to build a financial plan.
The real difficulty comes five years into that financial plan when you’re unexpectedly divorced, and the plan you were building with a partner needs to get thrown out the window. You not only need to start a whole new financial plan but a whole new life—under what is likely an incredibly emotionally draining circumstance.
Building a retirement plan isn’t hard. Sticking to that plan once you have your first child and your life becomes chaotic—and expensive—that’s hard.
Managing money is a lifelong pursuit, and life itself is unpredictable. Many amazing and terrible things will happen along the way, all of which will test your financial plan and your resolve to stick to—or adjust that plan as circumstances dictate.
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To withstand the inevitable adversities of life, you need resilience. Since you need to continue managing money through these adversities, you need to be resilient to be great with money.
Stick The Landing: A Rational Approach To Wealth Decumulation
As the great Mike Tyson once said;
Everyone has a plan until you need to start withdrawing from your portfolio without a paycheck.
Of course, that is not the actual quote, but Tyson’s point applies to a very important financial reality we all have to deal with. Creating a financial plan in a spreadsheet is easy. Following through on that plan and pinning your quality of life in retirement to that plan takes a tremendous amount of courage and unwavering belief in the plan.
When paychecks stop coming in, financial planning gets scary
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This newsletter is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.