A business can do everything right, but if they have poor business communication, they’ll never succeed. You are your business. You need to make sure you have the ability to communicate your goals and priorities to yourself, your partner and to others that that are involved in your bottom line.
If you don’t know this about me yet, let me just tell you that I am NOT a patient person. I have zero patience. When I decided I wanted to have a baby, I wanted her to arrive yesterday!* When I apply for something or have to wait for results, the world ENDS until I find out. If none of this sounds like you, GOOD NEWS! You are already one giant step ahead of me on your journey to financial independence!
Patience is Needed on any Financial Journey
I, myself, am famous** for saying: “Financial Independence is not a marathon. It’s more like a sprint followed by a rest on a moving sidewalk.” We all know the power of compounding and the numbers behind how easy it is to become a millionaire when time is on your side, but sometimes it’s just plain hard to remember.
When is Valentine’s Day again? TOMORROW?! Don’t worry… I’ve got your back. I literally don’t do a THING until the day before to prepare and I don’t spend a penny on this holiday!
(Insert: rant about commercialization of a made-up holiday designed to make you spend money to prove your love…)
Valentine’s Day Decorations
Okay, fine. We planned a LITTLE bit ahead on this one, but I still had to share it because it is literally the GREATEST IDEA EVER (I can’t take credit… I found it on Pinterest years ago and I can’t find the original source…).
On Sunday, my razor head broke. That’s right. It broke. The plastic connecting it to the razor broke. And I had been using the same razor for just over one year!
Men’s Razors are Better Than Women’s
Yes. There’s a wage gap and, I believe, a razor gap. They just don’t make them the same for women. I’ve been a men’s razor snob since Gillette accidentally sent me a Mach 3 razor when I turned 18 (I was a male on their marketing list apparently). So, let me tell you, ladies… it’s time to pick yourself up a Men’s razor. That’s step one.
Razor Heads Can be Sharpened
Over the past year, I’ve come across some pretty interesting studies about fund managers. Based on the research, let’s take a look at who the ideal fund manager is:
Top Performing Fund Managers:
- Drive “Practical but Unexciting” Cars – Fund managers who drive sports cars take on more risk… but the risk doesn’t translate into better returns. So, make sure you’re checking the parking lot before choosing your fund manager!
Are from Poorer Backgrounds – It turns out privilege puts people in positions they don’t necessarily deserve to be in. Fund managers from poorer backgrounds may have to prove themselves more because of their lack of connections or status, so the ones that make it are smarter and have more grit than the ones that got a “leg up” to get there.
- Actually Do Very Little – This article is about Nevada’s 35 billion dollar fund manager. He describes his method as “bare-bones.” The article says: “The Nevada system’s stocks and bonds are all in low-cost funds that mimic indexes. Mr. Edmundson may make one change to the portfolio a year.”
Be Your Own Manager:
The key, as Mr. Edmundson from the Nevada fund would tell you, is low-fee index funds. Even if you don’t choose Vanguard funds, you can thank Vanguard for creating The Vanguard Effect – The combined savings of Vanguard’s low fees added to the driving down of prices in the industry leading to a savings of over $1 Trillion to the consumer!*
Maybe this is the end of investing as we know it if everyone jumps on the passive funds train. Or maybe you think index funds are communist (I don’t make this stuff up!). Then make up your own mind… but for now, I’m going to drive my sensible car and put my money in index funds and leave it alone!**
*This is similar to the “Costco Effect” in Anchorage. We’re told to be grateful we live in Anchorage after Costco came because before that, prices were much, much higher.
**I can’t claim I don’t have the privilege card, because I do.
Today’s Roth IRA Challenge comes from fellow freelancer Patricia Sanders. You can find her on Facebook if you’re looking to connect after hearing her story:
How I fully contributed to Roth IRA after moving out of my parent’s place
I grew up in a median household. The only bread earner was my father. From the very childhood, I knew about the importance of budgeting, as my father preferred to spend every dollar for a reason and wanted everyone to follow the same. During my college days, he retired with modest retirement savings. I didn’t ask my parents to fund my studies as the savings was for their future expenses.
I took a private student loan to complete the studies. Since the final year of the graduation, I was doing part-time job to deal with the student loan.
After completing studies, I left my parents place to join a company, in California, with whom I am currently working as an editor.
My current income is about $50,000 in a year. I took a rented apartment, which cost me dearly in every month. I don’t have a car yet; but still, the income is quite low to manage all the expenses including the student loan bills.
During the first year of the journey, I couldn’t save a single penny. I lived paycheck to paycheck almost all the year. I talked to my father who told me to set aside at least 10% of income, but I failed to do so.
I started January all ready to kick this year out of the park! One month in and I’m waning. January was a weird month and I can’t say February is shaping up to be any less weird. We’re watching the daily policy deluge coming out of Washington and bracing for Mr. T’s job to be impacted. Since I’m in research, it’s hard not feeling completely worthless in a climate that ignores research. Neil deGrasse Tyson said it best:
I dream of a world where the truth is what shapes people's politics, rather than politics shaping what people think is true.
— Neil deGrasse Tyson (@neiltyson) January 24, 2017
Despite the weirdness, we’ll try to pick ourselves up a bit in February and see how much we can accomplish. I made very little progress on any of my non-financial goals this month. Let’s see how I did on the financial ones…
Want to know how easy it is for us to write these every month? I literally just log into my Personal Capital and revel in all the numbers being in one place. Do you like checking numbers? Do you like graphics? Do you like playing with calculators like retirement calculators and how much your fees are costing you? Then, you should obviously use my affiliate link to Sign up here to help yours truly speed toward financial independence! (I assumed bloggers pushed this because of the affiliate income until I started using it myself… worth the FREE pricetag! And Seriously Amazing.)
In light of recent events, I’ve started hearing arguments (from both men and women) that women have achieved equality and need to “stop complaining.” Everyone apparently knows that girls are brilliant already. I’ve also been informed that “men controlling women” isn’t a common theme that exists outside of my own “echo chamber” and that women can officially do anything they want to. I realize that research has also lost popularity as of late, but as a researcher, I will continue to publish research-based information.
Gender Stereotypes Start Young
In the midst of the arguments this past week, a study was published looking at 6-year-olds. In the first part of the study, children were told a story about a character that was “really, really smart.” They were then shown pictures of 2 men and 2 women and told to identify which one they thought was the protagonist of the story. 5-year-old girls and boys (not yet school-aged) were just as likely to choose a boy or a girl as a protagonist to the story (and likely to lean toward identifying the protagonist as themselves–girls would choose a girl, boys would choose a boy). 6-year-olds, however, were not. The study states: “Despite [the] strong tendency to view one’s gender in a positive light, girls aged 6 and 7 were significantly less likely than boys to associate brilliance with their own gender.”
Good Wishes are Not Sufficient
Happy Friday, friends! Mr. T came across this quote by the Dalai Lama this week and we both thought it worth sharing:
In the present circumstances, no one can afford to assume that someone else will solve their problems. Every individual has a responsibility to help guide our global family in the right direction. Good wishes are not sufficient; we must become actively engaged. – The Dalai Lama
We can no longer let the world move forward without our voices. It’s time to make sure your elected leaders know what you are passionate about. You cannot complain about the situation if you haven’t personally done something to try to fix it.
Start at home. Start with your family. Start with your neighborhood. Start with your city. If we can spread kindness and goodness from the bottom up, the impact will eventually spread. No one can change the world for us. It’s time to become actively engaged.
Tracking is the First Step
If you don’t know where your money is going, you don’t know how to make it go where you want. Simply having a budget or tracking your finances the right way isn’t going to change your behavior.
In Fall 2016, a study was published about activity trackers (ie: FitBits) and weight loss. It was a randomized controlled trial (the best kind of study there is!). 471 participants spent 6 months on a low calorie diet, group counseling, and physical fitness prescriptions. After 6 months, the group was randomized into 2 groups: “Self-monitoring” (ie: “you’re on your own, but here’s a website where you can enter your data”) or “Activity Tracker” (ie: “here’s a FitBit. It will capture your data.”) After 2 years (!), they all weighed in. Both groups had better levels of fitness, but the group without the FitBit lost significantly more weight!
You read that right… the ones that had the fancy trackers lost LESS weight than those that didn’t have them!