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Wow! Volatility is back in a big way almost as soon as I wrote this piece. I try to write a little ahead, and I thought about not publishing this because markets are no longer going straight up. But then again, what better way to drive home the point of how stocks don’t always go up than when stocks are actually down a little?
What do you think? Did you feel any different a couple of weeks ago when stock values made you feel wealthier? Here’s what I thought you should’ve been thinking about a few weeks ago when stock prices seem unstoppable.
One of Warren Buffett’s most memorable quote is “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.” But when the market keeps going higher, you could argue that there’s a more appropriate one for the masses.
You are never as rich as you think you are in a bull market.
The significant push higher lately has been nothing from breathtaking. April was a big month after recovering a bit from the March lows. Then you’d think the momentum would slow down in May but that came and went with another serious gain. June did slow a bit but the markets were still positive. Then it was July and we were off to the races again. And what happened in August? The S&P 500 notched its best return in August since 1986. In fact, the S&P added 35.4% since April, and that five month record was the best since 1938!
Volatility’s picked up a bit in September, but it’s almost difficult to not have made money with any stocks or stock funds you bought in the past five months. [ continue reading… ]
I was talking with a friend about a few ways that he could start earning some more money the other day, and he said something that absolutely stopped me in my tracks: he told me that he didn’t want to earn too much money because it would bump him into the next tax bracket. He was absolutely adamant that he didn’t want to be paying more in taxes.
But, in my mind, a higher tax bracket is a good thing. It’s not something to be avoided. Don’t get me wrong: I’m not quite crazy enough to go out of my way to pay extra taxes, but higher tax brackets are beneficial to your bottom line. Here are five reasons for that simple fact. [ continue reading… ]
Moving after being in our home for 10 years was so painful, but if there were any positives to the whole packing and sorting everything out ordeal a few months ago, it was that we were able to declutter and make some serious cash on stuff that’s been lying around the house. Emma was amazing at selling stuff, posting pictures, responding to requests, and scheduling pickups. She even managed to convince someone to buy our own bedroom furniture set for a hefty sum when he came by to pick up a mattress. That was a godsend because not only did we make the most money with that set, we would otherwise have an extra bedroom furniture set that’s hard to get rid of sitting in our garage of the new house. When it was all set and done, we managed to put $2,800 in our pockets.
$2,800 dollars.
And before you think you need a super seller like Emma, know that anyone can make some money declutter their home. Travis, my friend, also decluttered recently. Here’s his story. [ continue reading… ]
How far things changed in just a few short months…
With the pandemic still ravaging the economy and the incredible market crash just a few short months ago, it’s hard to imagine that here we are, contemplating early retirement because of strong market performance.
Yet, one of the readers is doing just that. He met his retirement number a month ago. And with the market’s going straight up ever since, he’s now pretty confident that the pot he saved up will last his family for the rest of their lives. He’s only 51 years old though and doesn’t know anyone nearly as fortunate as him so he’s a bit nervous.
If you were him, what questions would you be asking yourself before you tell your boss you’re leaving for good? Here are a few to consider.
Am I going to drive my spouse insane being at home all day? I put this one up first because it sounds ridiculous, and thus it’s a question that’s often overlooked. Yet, there are far too many people who find out that seeing each other at home all day unbearable after years of having one (or both) spouse(s) out of the house for long periods of every day.
I’m not saying to keep working forever just because you and your significant other can’t work it out, but take the time to talk to your spouse so there’s an understanding that there’s going to be a change. Go to couple’s counseling if you have to. Do whatever it takes, because an early retiree might be spending the next 50 years living together with their spouses and seeing them for 10+ hours each and every day. [ continue reading… ]
Personal finance experts often warn against “keeping up with Joneses” or splurging on unnecessary items. Latte factor anybody? Stop going to Starbucks and have a million bucks more by the time you retire!
And though this is good advice, what about the other side of the equation?
Do you ever feel guilty for spending money on yourself — even when you have your financial house in order?
When Should You Splurge? When It’s Something You Really Want and You Can Afford It…
I’m now at the point where I have absolutely zero debt, fully-funded emergency savings, and an automatic (albeit small) contribution going into an IRA every month.
Yet, I still don’t feel comfortable allowing myself to spend money. [ continue reading… ]
One of the more interesting things I’ve heard about recently was a piece about how the wealthy think differently than the middle class.
Steve Siebold, the author of the book How Rich People Think, interviewed more than a thousand millionaires and billionaires and came up with some information on the way that the wealthy approach life.
Among Siebold’s most interesting observations is the fact that, in the middle class, many people trade their time for money. Here’s what Siebold points out:
Formal education teaches people how to think and perform in the linear world of commerce, but the rich rarely become wealthy trading time for money.
This made stop and think. Am I trading too much of my time for money? [ continue reading… ]
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