Financial Archives - Page 10 of 14

Think Longer Term

Posted on June 20, 2021

It would be great to have everything right now. No waiting or requirement for patience. However, if you think long term, you can get a lot of what you want now and have a good long term too.

It is so easy to spend money and time. It is more difficult to keep an eye on them and guard them. But it makes sense to do so. Living for today is a great and exciting way to live life. However, if you sacrifice 100% of your future to maximise today, things could get challenging later.

Although, consider the future you and how much they will thank you for being a little patient. If you do, you might do things differently. If you eat well and exercise in the present, your 40, 60 and 80 year old self will greatly appreciate it. Saving and investing 1%, 10% or 20% of your monthly income could make the retirement era you very happy indeed.

I know it takes time to set these plans in place. But, if you can do it, you’ll be better off. Both the time you have in your later years and the money comforts will be greatly appreciated by the older you.

Think longer term. Future you will be glad you did.

Financial Gratitude Think About It

Feeling Grown Up

Posted on June 13, 2021

At what point do people feel like an adult? There are many times that people say they feel 18, 23 or 28. Feeling grown up means different things to different people.

Some people feel grown up when they can drive a car on their own. Others are instilled with civic duty, so voting is their grown up moment. For others it could be travel overseas on their own, getting married, having kids, buying a property or having a senior role in a prestigious company.

There probably isn’t just one grown up moment for anyone. Different moments will elicit a range of feelings and emotions. Perhaps they build on each other until you feel you are doing grown up stuff all the time.

There can be a lot to unpack in just how people approach this term. Are you grown up because you are serious or take on a level of responsibility? Owning an impressive house can feel grown up to some. It may depend on what they say ‘grown ups’ do or what seemed to be expected for that group when they were young.

Being grown up may just be moments of taking particular responsibility for yourself, your future and others around you.

Feeling grown up can be a mental burden for some. Remember to let your hair down occasionally.

Action Financial Observe Reframe your thoughts Time

The Power Of Compounding

Posted on June 11, 2021

Following on from the last few days, I’m combining retirement thoughts with compounding. The power of compounding is quite incredible.

I read an article recently about setting aside almost $3,000 for a child when they are born. This money could come from parents, grandparents, uncles and aunties or even from crowdfunding, I suppose.

The idea was that you could put that $3,000 into a low cost S&P 500 index fund and just let it sit there for 65 years. You would not take any out, nor would you need to put any more in. You would just let it roll over and compound.

Using the figures from the article, it noted the S&P had delivered an average annual return of between 10% and 11% in its nearly 100 years of existence. If it continued to average that rate, or even a little less (9.5%), the account would be worth over $1m by their 65th birthday.

This is more than 90% of what people would have in their retirement savings. By doing this one thing, during pregnancy or within the year after their birth, you would set them up for retirement. Regardless how their financial habits developed, they could always count on their $1m retirement fund when they turned 65.

The power of compounding is compelling.

Financial Observe Think About It

The Retirement Idea

Posted on June 8, 2021

Is it a myth or reality? Even if it was realistic for everyone, would everyone want to do it? The retirement idea is an interesting one.

Leaving one’s job and ceasing to work is roughly what the Oxford dictionary says it means. The ceasing to work is the bit that I find most interesting.

The idea that you do not work at all from that magical date, might be alluring for some. However, many others may find it a bit stressful not working at anything. So we have to dig at its meaning a little more.

Would it have to be no paid work or simply no working at all? What if you like your work? Many older people continue to work at their career job well after retirement age. Musicians and actors are both groups where we see some people working into their 70’s. Entrepreneurs and business owners can also be found working into their 70’s, 80’s and even 90’s.

Other people who work in occupations outside of the spotlight can also carry on working past the official retirement age.

For some, they like keeping busy. For others, they don’t have something else they would necessarily like to do. Others do it to keep some money coming in, even if they don’t really need it. Still others continue to work because the extra income helps them have the income they want or need.

The retirement idea may need a rethink.

Action Financial Health & Fitness Think About It

We Invest in AI Not IAM

Posted on June 5, 2021

We teach machines more than humans. Some people are more interested in creating robots that learn and not children. We invest in AI not IAM. Despite the incredible progress and benefits of the AI industry, perhaps we are missing something.

Some studies I have seen suggest we need USD 36 billion to teach the rest of the children not already being taught. Meanwhile USD 73.4 billion was raised by AI startups in just the fourth quarter of 2020 alone!

We are trying to get a machine to learn and think. Investors are putting more money and intelligent resources into how to improve AI rather than in teaching children to be better.

It does seem a little odd. All those people out there who could learn and improve but few do. It is partly that they do not want to but more often they are not aware it is an option.

Sure there may be more efficiency in AI and robotics. But we have the people available. And while we are at it, could we get the curriculum to include money, financing, budgeting and self-discipline. Perhaps they could teach goal-setting and a few other life essentials.

Teach children phrases like I am amazing or I am winning.

Unfortunately, we invest in AI not IAM.

Action Financial Think About It

Provide Value To Receive Money

Posted on June 4, 2021

The economy is not rigged. The world is not run by 30 all-powerful people. Think this through folks. You need to provide value to receive money.

Now there are a lot of other things you could receive. However, the main culture around the world is to give money to those providing a valuable product or service.

The greater the perceived value for the item in question, the greater the amount of money to change hands. No one forces you at gun-point to buy your groceries from Ocado or Tesco. Neither do people force you to use Amazon to buy books, gifts or tech equipment.

However, the natural flow of things means that if you do use a certain company to fulfil your desires, it will receive your money. So, if lots of people do this, the company will receive lots of money. No conspiracy or rigged system.

If you have a problem with your money going to Amazon employees, suppliers and shareholders, then stop using their services. It really is that simple. However, you are unlikely to stop the millions of other consumers from using their service. But if they did, they would shrink out of existence like Blockbuster and Kodak.

You need to provide value to receive money. What value are you creating for others?

Action Financial

Set Specific Metrics

Posted on May 27, 2021

We all would like to have more money. But how much more? You need to be clear with the universe. Set specific metrics so that you know whether you met the target or not.

I know it seems a little odd to be so precise with future outcomes. In addition, it is hard to feel confident with numbers that don’t have a solid basis.

But that is why you must do the numbers. You need to put in a few minutes with a calculator and pencil. Better still would be to use a spreadsheet so that you can quickly process changes in your assumptions. Also, a spreadsheet is a clean and easy way to see the numbers. You can also show others when things are neat, tidy and legible.

So decide on the numbers. For example, if you would love to achieve a £200,000 income before taxes this year, what has to happen? Do you need a new job, another job or a side hustle? If you sell dining tables at £2,000 each, you need to sell 100 tables. But what if each table costs £700 and your admin costs per table are 300? With only a £1,000 net, you will need to sell twice as many tables, or 200, to hit your target.

Set specific metrics so you know what you are aiming at and if you hit it.

Action Financial Gratitude Health & Fitness Think About It Time

Those Defining Moments

Posted on April 2, 2021

That early win or terrible slip-up can have a long lasting effect on our self-perception and confidence. Those defining moments can haunt us or provide much needed energy for our sails. Which defining moments can you recall?

It’s great to look back on these and unpick them a little. Was it a sporting achievement or scholastic? Were you 8, 13, 18, 27, 33, 48, 57 years old or a different age?

I was fortunate to have great friends, be athletic and be very good with academics. So I can recall mostly good memories at an early age and also as I went through secondary school.

Can you recall the first time you went on a big road trip? Do you remember being on a boat, train or airplane? Who inspired you the most when you were under 10 and who was it when you were a teen?

Most importantly now, is not what has happened, but what will happen. What defining moments would you absolutely love to have in your life? Will it involve an athletic achievement? Perhaps you have an academic goal in your sights? Relationship and financial success are both wonderful things to work towards. Don’t think any of these things just happen. You have to get yourself in the right place both physically and mentally.

Then those defining moments can happen!

Action Financial Progress Think About It

Producing And Consuming

Posted on April 1, 2021

Do you consume more than you produce? It is an interesting question. Producing and consuming are both required in life. However, imbalances in your life will occur if you do one more than the other.

Producing here means providing something of value. The more you offer in value, the more productive you are being. The more the market perceives value in what you are offering the more you can charge for it.

If more people like what you offer, the larger your business will grow. This is how the world has companies valued at billions of dollars. Because of this, we also see billionaire founders and investors. This is what happens when you provide something that others find valuable, not just what you think is valuable.

What you think is valuable is what you will consume. The more value you place on a product or a service, the more you will be willing to pay for it. This payment you make will come from your own resources such as income or savings.

If the value of your consumption is more than the value of your production, you will have less money or wealth. If your production value is greater than your consumption value, you will attract and keep more money.

Producing and consuming are part of life. Which one you focus on helps determine how you spend it.

Financial Observe Think About It Time

Feeling like Spring 2000

Posted on March 31, 2021

Anyone else got that deja-vu thing going on? Stock markets near all time highs and some stretched valuations. It’s feeling like spring 2000.

The Deliveroo IPO was not in line with City expectations. This immediately made me think of a similarly hyped IPO from March 2000. It was the IPO of Lastminute.com, the dot.com seller of discounted travel. Although it’s initial day was much better, it turned south very soon after. Things continued to unwind through April and into May. Actually it continued for a full year. From the 14th March 2000 IPO through to 14 March 2001.

The NASDAQ peaked in March 2000, coincidentally. It then went on to fall 78% over the ensuing 31 months. The descent ended in October 2002.

This all came on the back of a very unique year, which was the last year of the Millennium/Century/Decade. We’ve also had a very unique year in 2020. That seems more circumstantial, or not relevant at all. But I thought I would throw it in there.

Anyway, after the bull market in the 90’s, there was a shake out. Maybe we are seeing the start of a shake out now again. We have had about a decade of bull market activity, so theoretically markets are due a correction.

It may be just me, but it’s feeling like spring 2000.