How to Manage Your Money Effectively and ”Buy Happiness”
Jay Calangi
Technical Recruiter at Thakral One | Ateneo BS Management Engineering 2020 | Let's connect!
Before making rash decisions about your money, pause and try to think. This is obviously the right move but people keep forgetting to do this. If you’re on the brink of an impulsive decision, sit on that thought a bit. Not making a final decision until after 1 week can save you tons of money.
Risk tolerance in investing is not fixed; growth causes aggressiveness. On the flip side, when the market is going down people then fear risk. When you trade stocks, always focus on the inherent value of companies. You’re not just trading for paper but things that have in what they do. As you get excited about mall discounts, see the same for stocks. Their value does not change just because the price goes down after all.
When you invest, know that you’re competing against the smartest. Then, the chances of someone regular being the best investor is slim. If there’s an undervalued stock, someone out there will buy it quickly. Rather than beating the market, try instead to just match the market.
As you get a salary much like earning money from a bond, invest in stocks. Then, once you reach old age, you may want to go for bonds more. A target-date fund’s great as it’s conservative as the target year nears. This will ensure that people have the money to retire without losing much.
People should know that they need more money as they’ll live longer. This also means that you have more time to invest in the stock market. Having a 70-year investing time horizon, think about things long-term. It does not matter what happens with tomorrow’s or even today’s prices. If you have a long time horizon, good savings, and patience, you’ll be rich. You don’t have to be an investing genius, as time will do the work.
Money does not buy us happiness because of the hedonic treadmill. We get accustomed and then upset with problems from the new lifestyle. Then, you have to think about spending money on experiences. With this, you’ll enjoy anticipation, experience, and memories of things.
Source: Jonathan Clement