I cover a lot on investing here on SaveInvestBecomeFREE (IBFREE). There is a reason for this. Savings is the only way to build your wealth but once you have quite a bit saved and plan on using that money to fund your lifestyle for a long time (maybe 50 years for a very early retiree!), good investing becomes the main factor between financial success and failure.
Your post-job, lifetime financial success depends on how you manage the money you saved.
Continue reading “Why knowledge of investing is critical for financial independence”
I thought I would write a bit about investing today, including an update on some personal stock investments. As I’ve shared before, I’m a big fan of passively owning businesses (i.e. investing in stocks). Over the long-term, businesses Continue reading “Mid-Year 2017 Investment Update”
I’m a recovering pessimist. I used to joke that I am not a pessimist, I’m a realist. And the only reason I sound negative is because so much in the world is negative. There is some truth to this of course. There are a lot of problems. But there are also a lot of wonderful things in this world and those are the parts that I am recognizing and appreciating more and more as I get older (or maybe now that money isn’t a big stress?). Continue reading “The Future – Why Optimism is more Rational than Pessimism”
Anchoring is a psychological term used to describe the tendency we humans have to anchor our thoughts to a reference point, even though that reference point often doesn’t have any meaning and shouldn’t be used to guide decisions. This is an important topic to understand in investing, particularly in volatile assets like stocks or real estate. It’s another area where knowledge of how our mind works helps us fight our natural but irrational instincts. It will help make you a better investor.
Let’s start Continue reading “Mind vs Money – Anchoring”
Business ownership is one of the best proven ways to gain wealth. To get super-rich, you need to actually own or start a business and be successful in profitably growing that business. Personally that seems risky to me and way too much work.
So I do the next best thing; I Continue reading “Harvesting Capital Gains instead of Tax Losses – Advantages of using Stocks for Income in Early Retirement”
Investing. Stocks. Risk. Fear. Return. Volatility. All of these terms go together. The so-called Risk vs Reward spectrum means that investors should rationally demand higher returns for riskier investments as compensation for bearing that risk. So ultra-safe US treasuries or cash accounts will have the lowest returns. Riskier investments like stocks, real estate, longer-term bonds, or various alternative investments should have higher returns (but also an increased chance of losing significant value). But the term risk is thrown about pretty loosely and is viewed differently by many people. So this article will delve into risk. Particularly risk in investing. I’ll use the stock market as an example since it is my primary vehicle for maintaining and growing my own long-term wealth and security. I believe it’s critical to understand this well for your long-term financial success, particularly in early retirement where you are likely to be dependent on investments to sustain your spending for 40-50+ years. As you understand this better, you’ll make better investing and allocation decisions and also be less likely to make poor short-term financial decisions. The vast majority of FIRE success stories involve people who understand this well. It’s worth learning.
Continue reading “Increase your Long-Term Stock Investing Success by Understanding True Risk”
This post will cover both our 2016 progress as well as a look at the last 10 years from a financial perspective. I started tracking data more carefully 10 years ago so this is a perfect time to do a decade in review. Our total financial journey has really been 15 years since graduating and starting work but I’ll focus on the last decade where I measured things more carefully. A key point of this post, in order to help inspire those that are early in their financial independence (FI) journey, is to show the magic of what happens near the end of a many-year journey of saving aggressively and investing. At the final stages of “accumulation” is where your net worth increases a lot each year. It’s a fun place to be and is the reward for saving a high percentage of income over time and investing it in appreciating assets. Continue reading “2016 and the Last 10 Years in Review -Money Fun During the Final Stages of the Journey to Financial Independence”