Stoicism is a life-survival strategy, a way to protect one’s sanity while facing the ups and downs of life. It helps us focus on what we can control and to let go of the stuff we cannot control.
While not many are aware of this, stoicism embraces money and wealth, and advises a person to make money with honesty, dignity and trustworthiness.
No matter how little you earn using income-generating skills like writing, speaking, coding or managing, you can get started with investing by simply earning more than your expenses.
One needs to focus on the income-generation part and create value out of nothing, using one’s skills.
The Richest Man in Babylon, by George S. Clason. The message of this 1926 book is that rich people are rich because they save their money and don't get into debt.
Your Money or Your Life, by Vicki Robin and Joe Dominguez. This book will change your relationship with money.
The Little Book of Common Sense Investing, by Jack Bogle. This book is about index funds. Jack Bogle founded Vanguard and created index funds.
Consider where you find yourself as each phase requires a different strategy.
From nothing to something. This is where you live from paycheck to paycheck without any savings. Try to build a financial buffer of at least one month of expenses.
Gaining traction. Once you've saved at least one month of expenses, aim for saving six months of expenses.
Peace of mind. Put your money in a savings account and don't touch it. Everything else you save from now on is meant for investing.
Financial freedom. This is the stage where you have enough cash and investments to cover your cost of living.
You need to invest your money. It simply doesn't make sense not to. Even if you only invest 5% of your money, it would still be worth it. This is your investing for beginners 101 guide, updated for 2019. We explain the basics of simple investing and aim to inspire the proper mindset you need to succeed.
Banks don’t like to give away their money. That mindset is reflected in the interest rates of checking and savings accounts of 0,5% and 0.9% avg. annual interest respectively.
When you deposit your money in the bank, the bank turns around and invests that money at 7% a year or more. After they collect their profit, they give a tiny shaving of it to you.
Your portfolio reflects your long-term wealth building investment strategy – not the short term. It includes everything you own. Your retirement accounts, your investment accounts, even your home are types of investments.
Diversification is a way to describe owning multiple types of investment assets. Diversification is smart because you both protect yourself from failure and position yourself to take advantage of multiple robust methods for building wealth.