As mentioned in my Tsundoku for December, I went deep into a financial rabbit hole. When I came back out, I hadn't found any rabbits, but I came packing a few money truths. I share them below. They are in no particular order.
But before, a note on why I even read (past tense, I hate that word) these books:
I know the theory, especially the big stuff. The stuff your grandparents keep spitting at you. The stuff like "live below your means", "save x per cent of your income and invest it", "don't buy things you don't need".
Nothing new here. But... I'm human, and I'm anything but rationale (no one is, see below). I resemble my dog more than I want to admit: Whenever I see a shiny new thing, my brain goes into squirrel mode and shouts, "Oh, want! Must have! Now! My survival depends on this! Where's my credit card?".
I guess this is what it means to be human? So, these rules are not there to show you how well I can read. Or how intelligent I am – quite the opposite, actually. I am stupid, and I need to remind myself not to be a financial idiot by looking at them regularly.
And now, back to your regular programming. The actual rules:
- Money doesn't buy happiness, but it surely helps to have enough (what can be considered "enough" is strictly personal).
- People often mistake what they want. They think they want to buy possessions when they want to buy freedom.
- Money is a tool, and it's neither good nor bad. Wanting to have more money is also neither good nor bad.
- The pie is growing/infinite. Someone else doesn't have to lose for you to win.
- Time is the single most powerful force in investing.
- Humans can't be rational (no, you aren't either). We should at least be reasonable.
- It doesn't matter how wealthy you are. Everyone should always live below their means. (This is the truth numero uno.)
- Investing (into bonds/ETFs, etc.) is a sure way to grow money, but a slow one.
- There is such a thing as getting rich quickly (quickly still taking a few years), but there is no such thing as getting rich easily.
- Most debt is bad, but not all debt is bad. Credit card debt is bad. Financing a car, you could buy cash because you want to deduct it from your taxes could be considered "good" debt.
- Becoming rich is a process, not an event. (And you have to go through the process. This is why lottery winners lose their money as fast as they win it.)
- Everyone has different needs. Write yours down, and don't play someone else's game. (Don't mistake their game for yours.)
These are nowhere close to all the things I learned during my reading. But it's what remained with me the most. They might not all make sense taken out of context, as here in this blog post.
Why I plan to look at some of these truths in more detail in the future.