There are Many Flavors of Investing. Find your Favorite.

This post is for those earlier in their financial independence (FI) journey who have graduated from a focus on paying down debt, building a small emergency fund and getting any employer 401K contribution match (if you’re lucky enough to get this), and are now faced with the nice problem of figuring out where to invest the extra income each month.

This is typically a time of anxiety.  You feel like you’re putting your hard-earned money at risk by investing even though you know you have to.  But how to make the right choice?  There are so many ways to invest and as we’ve discussed before, too many choices is paralyzing and makes it seem impossible to make the “right” choice.

Fortunately, there is no “perfect” choice in investing.  What is most important Continue reading “There are Many Flavors of Investing. Find your Favorite.”

Growing our wealth while paying expenses and not having a job.

Decumulation is the technical term for spending down one’s assets. It’s the opposite of the accumulation phase of building up those assets.  So typically it’s the point at which you transition from your job income that is both paying your living expenses and allowing you to save money, to where your savings now need to pay for your living expenses.  Your net worth slowly declines as you spend the money you saved.  It’s a stark transition and it’s  psychologically difficult.

I don’t really like the idea Continue reading “Growing our wealth while paying expenses and not having a job.”

Why knowledge of investing is critical for financial independence

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”

The Future – Why Optimism is more Rational than Pessimism

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”

Mind vs Money – Anchoring

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.

Your Home

Let’s start Continue reading “Mind vs Money – Anchoring”

Harvesting Capital Gains instead of Tax Losses – Advantages of using Stocks for Income in Early Retirement

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”