From Nothing to the Unimaginable.
The last 15 years have been a phenomenal time to grow wealth.
Think about this. In 2009,
- Instagram didn’t exist.
- Microsoft’s Azure was on the cusp of launching.
- Satoshi Nakamoto created Bitcoin.
- Uber was founded.
Fast forward to 2024. Those four products created trillions of dollars.
It’s hard to imagine how crazy this is.
Our 2009 version of ourselves would gasp at the thought of the world we live in.
The last 15 years have been some of the best times to be an investor.
They haven’t been without crisis or drama (recall last week’s edition), but they’ve been very good.
While I have no doubts there will be trillions in new wealth created over the next 15 years, I have yet to talk with someone who feels like this will happen.
For good reasons, Americans are struggling with inflation, crazy politics, wars, etc. – today.
It’s hard to think long-term when fear is preached and then, at McDonald’s, we see a value meal costs $13.
Times are different.
But some financial principles are timeless. They hold true, no matter the economy or markets. They apply whether you’re 5 or 25 years from retirement.
So today, I want to share with you seven timeless pieces of wisdom to focus on with your money.
The Seven Pieces of Financial Wisdom
First, when you have the time, energy, and gumption – get a financial plan
- I’ve written a lot about this on Tired & Rich. People with financial plans are better off than those without them. There is study after study after study on this. Most of you who read this are midlife, if you don’t have one yet, get one. I have one, and I follow it to a T.
Second, don’t work at crappy companies
- This is some of the best financial advice you can ever receive: don’t work at crappy companies. Crappy companies are those that are barely surviving and have little chance of turning things around. It’s hard to make more money when the company you work for struggles with the same problem — making more money. Most of you have 20 years or less in your career, don’t waste them working at these slow growing, debt ridden, poorly managed businesses.
Third, don’t buy too big of a house and drive cars for longer
- Getting these two things right can radically change your financial life. Next time you buy a house, or when you get your first home, do everything you can to get what you want without stretching. If you stretch in housing, drive your cars for longer. Cars suck, and this comes from a guy who really likes cars. Drive them longer, particularly in your core wealth building years 35-55.
Fourth, pay yourself first
- As I wrote three weeks ago on budgeting, people on track for a great retirement pay themselves first. They invest before they spend. They have a bias for investing, they have a bias for paying down debt and avoiding it at all costs. This fourth step is about the basics. Always invest no matter what is happening in the world.
Fifth, invest more each year
- As I wrote above, the last 15 years have created trillions of dollars of wealth in our world. And almost every single investor who has “made it” has done so by consistently investing. Seriously, every single successful person you know invests consistently. Investing consistently in the right accounts with the right investments is literally your financial life. And make it a goal to invest more, if you saved $15,000 last year, shoot for $20,000. Wealth is what is left over after you spend your money. Make it a mission to do more of that every year.
Sixth, do what you said you’d do
- This, to me, is one of the most important skills in all personal finance, and that is doing what you said you’d do. If you said you wouldn’t buy a car for a year, don’t buy a car in 8 months. If you said this would be the year to invest, invest. If you said you would donate more money to charity, do it.
Seven, be a builder
- As the last 15 years have proved, the markets will reward people and companies who take part in building the world around us. I have no question there will be another Amazon, Costco, Microsoft, or Tesla. So look for them and find a way to invest in them.
There you have it, seven timeless pieces of wisdom to keep you out of trouble and in the green.
And to share with you how to use these. I want to share with you a quick personal story.
A Challenge to My Family
Six months ago, on my birthday, I asked my wife if I could go to our office downtown for two hours while our two youngest napped.
I wanted to reflect on my life, our family, our business, and where we are going.
To dream.
Pick apart wasn’t working, and what was.
I needed space to think.
To be creative.
I ended up writing a short manifesto of what I wanted the rest of our 30s to look like.
And in doing so, I updated my family’s financial plan.
I wrote in detail what we wanted and how our financial life would reflect these desires we have as a family.
The words written live in a blue moleskin that has since been fully used, but I think about them all the time.
Because financial plans are ultimately the math behind dreams.
Six months later, my wife and I are now in the “do what you said you’d do phase” with our plan.
Here’s the takeaway this week:
Pick one of these pieces of wisdom and dive deep.
Take 30 minutes this week and do some reflecting on life and money.
Use these points as a guide.
The last 15 years have been fantastic.
But in the next 15 years, who knows? It’s up to you to decide.
Looking forward to hearing your thoughts on this edition.
Thanks for reading this week.
