We’re breaking down Listen Money Matter’s Twelve Financial Philosophies. Think and meditate on them and then live by them.
1. You are responsible for your own wealth. Don’t expect to marry rich, inherit a fortune or win the lottery. Don’t blame your back ground, the economy, or any other excuse you can come up with. If you want to build wealth, the onus is on you.
2. Getting out of debt is an emergency. If you have debt, use the stack method to pay it off.
3. Always take free money. If your employer offers matching 401K, take it. Even if you have debt, contribute to the 401K.
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4. Super frugality is a waste of time and money. We’re all for frugal but if it takes two hours to make your own laundry soap, that’s perhaps not the best use of your time. You would save more batch cooking for two hours so you don’t have to buy lunch at work for the week.
5. Credit cards make spending cheaper when correctly used. A good cash back card will save you a small percent on your purchases.
6. Avoid bank fees and find low investing fees. Seek out a bank that doesn’t charge crazy fees for things like checks, automatic payments, and minimum balances. Choose an investment tool that has low transaction fees. We discussed bank fees in Episode 9 and Vanguard, a low fee investment company in Episode 109.
7. Automate your finances. Set it and forget it. Use auto pay, use Mint, use auto transfers. Andrew explained how in this article.
8. Savings accounts are stupid. In episode 107 we explained where your emergency fund should be kept and it’s not in a savings account.
9. Materialism inhibits wealth building and leads to debt. A house full of stuff you don’t use costs you money when you buy it and money in the future because you didn’t invest it.
10. Budgeting makes smart people smart with money. You’ve got to know what you have to work with and where it’s going otherwise you’re navigating blind.
11. Health is always more important than wealth. The money you spend on your health whether it’s good food, a gym membership, or regular check-ups, will more than come back to you in the future. Being sick is expensive, especially in America.
12. Investing is a long-term strategy. Once you start investing, remember you’re in it for the long haul. Be fearful when others are greedy and greedy when others are fearful.
That’s it, LMM’s raison d’etre in twelve simple ideas. Let us know in the comments what your philosophies are.
Check out this fun little money-saving tip video I did over the weekend:
The Obstacle is the Way: A modern philosophy book.
Betterment: An investing tool that let’s you set it and forget it. Use this link and get six months of fees waived.
Mastering Mint: Our book on how to get the most from Mint. Listen to the episode and find out how to get it for free.