What I’m reading…
You may wonder, what I’m reading under lockdown. Well, what I can tell you is that I have read more books in the last 2 months than I have read over the last two years. Not just for the sake of being confined. This has more to do with myself allocating more time to it! My latest reads were on personal financing and investing.
In a previous post I wrote that I was reading Morgan Housel’s last piece ‘The Psychology of Money’. No, I have not shifted my focus from food to a financial role. This more has to do with the question about ‘WHY people invest’. Why are some people prudent and others greedy with money?!
Personal finance & Investing
If you’d randomly ask people about investing, many of them would respond saying that this is only for the ‘rich & famous’ top 1% of the population possessing a ‘slug of cash’. Yet, if you put as little as €10 / $10, or whatever currency you’re paid in, aside on a monthly basis on something as simple as a savings account, you are already investing. Namely, you are investing in your own future!
Lessons learned
One of the chapters in Morgan’s book that really stuck with me, quote: “Wealth is what you don’t see”. Later on, he described: “True wealth is the difference between your ego and your income”, often referred to as the so-called ‘ego-gap’. Some may feel offended, saying it is as simple ‘the more you earn the more you spend’. That’s partially true, don’t get me wrong. But think about it this way, if you are able to stop the goalpost from moving once your income increases, that’s when you increase your savings power.
Society wants to mold you
I agree, it is very hard to not get distracted by all the temptations to spend money online. Especially now when we are barred indoors. But if you are able to withstand all these temptations and NOT spend money, that is how you can prepare yourself for curveballs thrown at you.
Thus, as simple as the open-door sounds: true wealth lies in the ability to NOT spend money. Putting it away on something as simple as a savings (or brokerage) account, allows you to prepare yourself for the ‘what ifs’.
Sources:
The Psychology of Money – Morgan Housel (2020)
How I Invest My Money – Josh Brown & Brian Portnoy (2020)
Jesse Livermore – Richard Smitten (2001)
Questions? Contact me!
What I’m reading…
You may wonder, what I’m reading under lockdown. Well, what I can tell you is that I have read more books in the last 2 months than I have read over the last two years. Not just for the sake of being confined. This has more to do with myself allocating more time to it!
In a previous post I wrote that I was reading Morgan Housel’s last piece ‘The Psychology of Money’. No, I have not shifted my focus from food to finance. This more has to do with the question about ‘WHY people invest’. Why are some people prudent and others greedy with money?!
Investing
If you’d randomly ask people about investing, many of them would respond saying that this is only for the ‘rich & famous’ top 1% of the population possessing a ‘slug of cash’. Yet, if you put as little as €10 / $10, or whatever currency you’re paid in, aside on a monthly basis on something as simple as a savings account, you are already investing. Namely, you are investing in your own future!
Lessons learned
One of the chapters in Morgan’s book that really stuck with me, quote: “Wealth is what you don’t see”. Later on, he described: “True wealth is the difference between your ego and your income”, often referred to as the so-called ‘ego-gap’. Some may feel offended, saying it is as simple ‘the more you earn the more you spend’. That’s partially true, don’t get me wrong. But think about it this way, if you are able to stop the goalpost from moving once your income increases, that’s when you increase your savings power.
Society makes you spend
I agree, it is very hard to not get distracted by all the temptations to spend money online. Especially now when we are barred indoors. But if you are able to withstand all these temptations and NOT spend money, that is how you can prepare yourself for curveballs thrown at you.
Thus, as simple as the open-door sounds: true wealth lies in the ability to NOT spend money. Putting it away on something as simple as a savings (or brokerage) account, allows you to prepare yourself for the ‘what ifs’.
Sources:
The Psychology of Money – Morgan Housel (2020)
How I Invest My Money – Josh Brown & Brian Portnoy (2020)
Jesse Livermore – Richard Smitten (2001)