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  • - Millionaire Habits, Career and Mindset | No B.S. Personal Finance | Retired at 35
    Millionaire Habits, Career and Mindset | No B.S. Personal Finance | Retired at 35
  • Some great tips on this one



    2023 resolutions
    I think now is an appropriate time to share some proposals for New Year’s resolutions for investors:

    1. Don’t get spooked by tough times.

    Arguably the biggest mistake made by investors during the Global Financial Crisis was to exit equities near the bottom, thereby locking in losses and missing out on participating in the strong stock market rebound that followed. We’re likely to have geopolitical, economic and market events that will strike fear in the hearts of investors in 2023. Remind yourselves that over time, no matter what the event, from the Great Depression to the Cuban Missile Crisis to the Gulf War, the stock market has had a way of shaking it off (of course some events took longer than others to shake off) and continuing to climb higher.

    2. Expect the unexpected from the markets.

    In looking at asset class and sector performance by calendar year over time, it’s clear that markets can shift quickly; today’s leaders can be tomorrow’s laggards, and vice versa. Ensure your portfolio is well-diversified — consider a range of assets across and within the three major asset classes. In particular, ensure adequate exposure to areas that appear poised to perform better on a relative basis — in my view, this includes emerging markets.

    3. Don’t wait for “perfect” entry points into the stock market.

    I keep getting asked if the stock market has bottomed yet; investors are clearly looking for that perfect time to jump in. The reality is that we won’t know the perfect entry point until it’s in the rearview mirror. I believe we are likely to see significant volatility early in the year as we wait for greater clarity on when the Fed will hit the pause button. I also expect earnings to be downwardly revised in coming months, which should also spark volatility. Whether a retail or institutional investor, dollar cost averaging can be a prudent option, especially in this kind of market environment.

    4. Look for income potential in bonds and beyond.

    I expect modest gains — and significant volatility — for major asset classes in 2023. However, the positive byproduct of aggressive Fed tightening is that income is far more abundant than it was when we began 2022. Investors may benefit from ensuring adequate exposure to fixed income sub-asset classes such as investment grade credit, municipal bonds and higher quality high yield bonds that have relatively robust yields. And don’t forget the income potential of dividend-paying stocks and real estate investment trusts (REITs). In an environment of low or non-existent capital appreciation, income can make a significant difference in total return, and I believe the benefits of diversification also apply when it comes to sources of income.

    5. Create an investment plan and stick with it.

    I saw firsthand the value of an investment policy statement when I sat on the board of a small private endowment 20 years ago. The investment policy statement created structure and discipline. Key portfolio decisions such as asset allocation bands and the annual “draw” were decided upon in an emotionless vacuum. When the Global Financial Crisis occurred and some committee members got spooked, the investment policy statement guided the portfolio — think of it as creating “guardrails” — as markets moved and emotions ran wild.

    6. Apply Stoic principles to investing.

    My older son, a junior in college, has for some time been espousing the virtues of Stoicism, an ancient philosophy, for application by college students seeking a way to juggle their lives. It got me thinking … Stoicism also has practical applications for investing today. Stoics believed it was important to put life into two broad categories: that which you can completely control and that which you cannot control (either completely or partially). Stoics believed it was important to focus on the things you could completely control. In investing, that includes creating an investment plan, adhering to that plan, and ensuring adequate contributions — long-term portfolio performance and the achievement of investing goals will be a byproduct of these controllable actions combined with the uncontrollable path of markets.

  • The 10 Main Areas of Financial Education

    Gaining financial education means gaining enough knowledge to be dangerous in these essential categories. Remember, you don't have to be a expert in everything, but you need to have working knowledge and a good understanding in each one of these areas.

    • Budgeting: Understanding how to create a budget, track expenses, and manage cash flow.
    • Saving and Investing: Understanding how to save money, create an emergency fund, and invest for the future.
    • Credit management: Understanding how credit works, managing credit cards and loans, and building a good credit score.
    • Risk management: Understanding and managing risks, such as inflation, market fluctuations, and fraud.
    • Tax planning: Understanding tax laws, deductions, and credits to minimize taxes and maximize savings.
    • Retirement planning: Understanding the different options for retirement savings and planning for retirement income.
    • Insurance: Understanding different types of insurance, such as health, life, and property insurance, and how to choose the right coverage.
    • Estate planning: Understanding how to plan for the distribution of assets after death, including drafting a will and setting up trusts.
    • Entrepreneurial finance: understanding how to manage finances as an entrepreneur, including budgeting, cash flow management and tax planning.
    • Behavioral finance: understanding how psychology affects financial decisions and personal financial behavior.
    A great article on Financial Education Resources


    Financial Education — Shocking Insights: You Need To Act Now
    What Is Financial Education? Financial education refers to the knowledge and understanding of how money works and how to make it work for you. It in…
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