Most of us have been told that we should keep a budget. Most of us have been told that we should avoid credit card debt. If we’re lucky, we’ve even been told we should save and invest some of our money each month. But what’s the big picture? What are we really aiming for, and why? Any good financial planner, before recommending a financial plan, is going to take some time getting to know our personal goals and aspirations. Similarly, we need to have a familiarity with our financial philosophy before we dig into the details of our financial habits. My financial philosophy is simple: Live Now. Live Long. Change The World.
Live Now - Spending
Ahh. Every millenial’s favorite part - live now. The reality is, the only moment we’re guaranteed is this one right now. Therefore, it is not only depressing, but illogical, to rid ourselves of today’s delights purely in hopes of some future reward, which may never come.
How many years of our life will we allow ourselves to live for a ‘one day?’ And what future reward could possibly justify suppressing our dreams and desires right now? We all know someone who worked so hard and for so long in the name of financial prudence only to have wasted away their best and brightest years. Delayed gratification is important, but not at the total expense of today’s gratification. See, even if our future pans out like we intend, we’ll only experience it once that future becomes our present. We never actually live in the ‘future’ reality; we never live in a ‘tomorrow.’ We have today, and hopefully we have future todays still to come. In other words, the best way to fully enjoy our tomorrows is to teach ourselves how to enjoy our lives right now.
For the natural savers and more frugal ones among us, ‘Live Now’ may not come very instinctually. It sounds silly to the rest of the world, but for you, spending money on things you love may feel more like a discipline than a pleasure. But don’t be swayed by that old person you know that’s proud of you for hoarding every penny. Press on and discipline yourself to spend. And no, roof repairs don’t count. I’m talking good old fashioned spending. Your quality of life from here on out depends on it.
If Live Now is a struggle for you, take some time to answer the following questions for yourself:
Live Long - Saving
And all the Baby Boomers and Gen Xers said, ‘Amen.’
Whether or not words such as ‘emergency fund’ or ‘retirement’ are particularly inspiring for us, they absolutely need a place in our financial strategy. This is because, philosophically, the more we can be financially prepared for life’s road bumps, the better. We’re no longer worried about how much longer we can make it before getting our car repaired. We’re no longer banking on the best-case scenario; we see a clear pathway to prosperity and happiness regardless of what circumstances may come.
Not only that, but the more money we have saved up, the more opportunities we have - because money is opportunity. The possibilities approach infinity as our net worths multiply, and our capacity to experience and appreciate life explodes along with it. There is real potential at stake here, potential that isn’t worth sacrificing for avocado toast or a soon-to-be-outdated car, iPhone, or fashion trend.
Now you may think to yourself, “I’m not too concerned about saving; I don’t even want to retire. I plan on working until I die doing what I love.” Honestly, I align with that mindset in principle. My only question is - do we really know that? There are plenty of people in the world that would like to be working right now, but can’t land a job. There are even more people in the world that would like to be working right now, but due to injury or old age simply aren’t the productive employee they once were. I’m not talking doomsday stuff here. I’m talking commonsense life. These are realities we have to face, and that we can actually prepare for quite easily. So we should.
But I just told you guys a second ago to start spending money and focusing on today’s gratification - which one is it, Jeremy??
The answer is: both!
Why pick one if we don’t have to?
We can embrace this very moment while also setting ourselves up to enjoy the next one. We can spend and save. Personally, I’m preparing to live a full, rich, meaningful life all the way to 110 years old. How about you?
Change The World - Giving
We’ve been given too much to keep it all to ourselves. We were born to make a difference in the world and in the people around us. As it relates to my financial philosophy, this means giving money away is a top priority. Not just ‘one day’ when we have ‘enough.’ It’s time to say ‘enough is enough’ to the mindset that we don’t have enough. The truth is, we have more than enough already. We are more than able to give money and resources away generously, right now. Whether we like it or not, we’re some of the wealthiest people on the planet, so we might as well start living like it and give aid to those in need and to the causes we’re most passionate about!
What About Investing?
When it comes to investing, you have two options regarding how it fits within your financial philosophy. For most people, saving and investing go hand in hand. It’s all a part of their value to ‘Live Long’ - making sure they’re putting enough money aside to sustain themselves in the long run.
In my opinion, this is a terrible way to invest, and I’ll tell you why.
When investing is a part of your Live Long strategy, you are simply a consumer of your investments. You view investing as some sort of money grower machine made available to the general public. And what you end up doing is putting money into the money grower machine - whether it’s the S&P 500 or real estate or whatever else - and then you just sit back and receive the benefits of this nice service. Except of course, when the machine is broken. When your investments go down, you’re freaking out, and the odds are very high that you’ll make some bad decisions in those moments. And after the machine burns you, you’ll probably make some more bad decisions - like paying someone else to do everything for you, or putting all your money into CDs and bonds instead - all but guaranteeing a lifelong financial struggle.
But let’s say you roll with the punches and stay the course. What’s so bad about that? In short, it’s just plain uninspiring. There’s no personal ownership. There’s no passion or vision. You’re just an investment consumer paying a money-grower machine and hoping that it works. One day, you may get tired of this utterly demotivating investment strategy and decide instead to start your own business. 70% of first time businesses fail. Uh oh.
So what’s the other option, you ask? To make investing a part of your Change The World strategy. Now, instead of throwing our money in to an ambiguous pool and hoping it gets bigger, we’re buying ownership into only the best, most profitable, most purposeful and impactful businesses in the world. We’re true, proud business owners, and we can keep our day jobs, too. Instead of sitting on the sidelines and watching a money grower machine, we’re on an active and fulfilling mission. And when the value of our hand-selected business portfolio dips, we’re not stressed, because we have a vision for the decades ahead that the stock market ‘consumers’ know nothing about. Personally, I use Robinhood to accomplish this, mainly because it's super easy to use and 100% commission-free - and I like free. You can try it out here and they'll us both a free stock for using my link.
There is no price tag for a business that sustainably intersects profit, value, and purpose.
This is a major key to world change, and such an exciting journey to course. For world change to happen, we need more than generous giving. We need economically viable solutions! I’m convinced that investing as a way to Change The World is more enjoyable, leads to a more lasting global impact, and ultimately will earn substantially more financial return than investing to Live Long.
What businesses do you see that sustainably intersect profit, value, and purpose? Are you a partial owner?
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