A drama-free financial life – one that produces passive income and steady growth that requires little maintenance.
That’s what this is all about.
If your financial life feels more like a Hallmark movie than a well-oiled machine built for your success, you’re missing out.
I’ll admit I’ve had my fair share of drama over the years, from spending too much money in my twenties eating out to side hustles gone wrong to almost a never-ending saga of scary world events that tempt investors to flinch.
I remember in 2017 when Kim Jon Un, North Korea’s President, shot a ballistic missile over Japan that landed in the middle of the Ocean for the second time in a month.
He was shooting missiles like I drink coffee – clearly too much.
I saw the headline, leaned back in my office chair, and thought, “You’ve got to be kidding me?!”
What’s next? War?
Furthermore, if your entire life’s savings are invested, stuff like this is nerve-wracking.
Nervous people do one thing well—they ignore the long term and become laser-focused on the short term.
Drama causes short-term thinking (remember middle school?)
Short-term thinking is not synonymous with long-term wealth creation.
Drama is great on TV but should be avoided like the plague in our financial lives.
Here the playbook:
Get Out of Financial Trouble
Going to put my Dave Ramsey hat on for a second.
Many of you are not in financial trouble, but if you are, get out for your own sake.
Financial trouble looks like this – not enough cash.
That’s it.
How do you get more cash? Spend less or make more.
You may not have been the source of your financial problem (layoff, market losses, health issues), but it’s your responsibility to get out.
I know this sounds harsh, but I’ve been in trouble a few times over the years myself; the faster you get out, the quicker you can return to investing.
Focus On The Most Important Place
They say home is where your heart is.
In financial terms, your financial home is where you go first in your mind when you think about your money.
Here’s the question – what did you think when you read that?
- Checking account?
- 401k?
- Credit Card?
- Brokerage Account?
Whatever you just answered is probably it.
What’s mine?
My company and two Schwab brokerage accounts.
Rather than focusing on my checking accounts, which have nothing to do with my long-term wealth creation, I focus on the places where I can create the most value—with the Fjell team and our clients, and the place where extra cash goes —brokerage accounts.
Choose your home base wisely because whatever it is, you will check it a lot, think a lot about it, and work on it a lot.
Use the Snowball Effect
You are out of trouble and spending time on the right things; what’s next?
Use the snowball effect to your advantage.
The snowball effect is how money grows—it’s like a snowball going down a hill and exponentially getting bigger the farther down the mountain it goes.
This is the principle of proximity from last week.
You need to put your spare cash where money can grow – think 401ks, brokerage accounts, real estate, etc – and keep buying more.
More money begets more money.
Avoid Dumb Financial Mistakes
Warren Buffett famously said, “Only when the tide goes out do you learn who was swimming naked.”
Put another way; it’s easy to hide financial mistakes – until the tide turns, something happens, and you discover financial humiliation.
Large financial mistakes are humbling, discouraging, and dangerous.
How to avoid them?
Partner with a financial advisor.
My team at Fjell is constantly looking for things that could go wrong for clients, and steering clear of them.
Through consistent communication, up-to-date financial plans, and opportunistic investment portfolios, we help clients find financial freedom and enjoy a drama-free financial life.
One of the easiest ways to win financially is not making mistakes.
Remember, you only need to become financially independent once.
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So, while Kim Jon Un has caused some headaches over the years, the show must go on.
You win when you treat your money how it wants to be treated.
- When you stay out of trouble, you can invest more.
- When you focus on the right things, you will improve.
- When the snowball gets rolling, you’ll be unstoppable.
- When you partner with an advisor, you’ll avoid mistakes.
This is what a drama-free financial life looks like.
It’s the best.
PS—The SP500 has been up 110% since September 15th, 2017, when the second missile flew over Hokkaido, Japan.
