Buy to impress is the way of less money
No.1 Greatest personal finance lesson that changed my life
The author reveals that “spending money to show people how much money you have is the fastest way less money”. Morgan Housel, author of "The Psychology of Money," suggests that people often try to show social validation through purchases. However, this can lead to poor financial habits. The author advises spending money on items that add value and avoid spending money to impress others, as it doesn't matter and can result in holding bills without anything to show for it.
Real Millionaires Are Frugal
No.2 Greatest personal finance lesson that changed my life is that real millionaires are actually Frugal Dave Ramsey one of the most famous American personal finance personalities said it best “Typical millionaire lives in a middle class home drives a two-year-old or older paid for car and buys blue jeans at Wal-mart”
Dr. Thomas Stanley's 1996 book, "The Millionaire Next Door," reveals that real millionaires are not as wealthy as media portrays them. Instead, they live frugally, wearing inexpensive clothes and suits, and often driving used cars. They often call themselves tight WAD, a term used to describe their lifestyle. This perspective contrasts with the lavish lifestyles often associated with the media, which often portrays wealthy individuals as lavish. The true wealth of real millionaires is built on a foundation of frugality.
Average Friends ,Average Life and Average Expenses
No.3 Greatest personal finance lesson that changed my life
When we have average friends we will have an average life Jim Rohn is the Motivational speaker famously said “It best we are the average of the five people we spend the most time with”
Our networks are often shaped by our upbringing, schooling, and co-workers. We often stay within our comfort zones, hanging out with people we know and doing what we've always done. However, if people within our natural circles have negative life and money habits, it's unlikely they will become financially successful or become healthy and educated.
Marry For Money
No.4 Greatest personal finance lesson that changed my life is that when it comes to finding our perfect spouse we should most definitely marry for money. The other characteristics of millionaires Dr Thomas Stanley found in his research was a relationship between marriage and wealth “It is very difficult for a married couple to accumulate wealth if one is a spendthrift a household divided in its Financial orientation is unlikely to accumulate significant wealth”
Investing Should Be Boring
No.5 Greatest personal finance lesson that changed my life is that effective investing should actually be quite boring Paul Samuelson the first American Economist to win the Nobel Prize in economic Sciences said it best “Investing should be more like watching paint try or watching grass grow if you want excitement take 800$ and go to Las Vegas”
Investing Should Be Simple
No.6 Greatest personal finance lesson that changed my life is is that effective investing should also be very simple.Jack Bogle the founder of Vanguard and the father of index fund said “when there are multiple solutions to a problem choose the simplest one”
The media often portrays investing as complex and risky, using jargon like Alpha dividends and capital gains to make people feel dumb. However, it's important to remember that investing doesn't have to be complicated; understanding jargon can lead to compounding returns. Starting with simple index funds can help beginners become more confident and confident. Creating an effective investment portfolio doesn't require a rocket science degree, and with just a few simple funds and 30 minutes a year, anyone can become a Bonafide investor. It's as simple as choosing what to eat for dinner today, and only requires a few minutes a year.
Investing Should Be Simple
No.7 Greatest personal finance lesson that changed my life is that effective investing should be for the long runand when we mean long run really long Warren Buffett the stage of Omaha said it best “our favorite holding period is forever” Warren Buffett doesn't invest in index funds he finds good quality companies however Warren Buffett tries to find stocks that are worthy of being held for many years down the line instead of focusing on the short-term opportunities of a stock he considers the fundamentals the company's ability to innovate in its market and consistently boost his profit the lesson here isn't that we should try to stock pick like Warren Buffett because there's a reason why there's only one Warren Buffett rather his philosophy and long-term investing none of the companies purchased or Investments made by Berkshire Hathaway was ever done with a short-term mindset Warren Buffett and Charlie Munger didn't choose companies or stocks because they thought the price was going to rise this week this month or even this year they bought and invested in companies because they wanted to own those businesses for the long term yes they still sell stocks occasionally and for a variety of reasons but their primary approach is still with the mindset of owning them forever for example Berkshire Hathaway has owned Coca-Cola which owns about 10 of the shares for 34 years American Express 29 years Costco 22 years now compare that to an average investor who holds a share for five and a half months so when we're approaching our own investment we should have a long-term mindset that once we buy a specific fund we should plan on holding it essentially forever not trying to time the market not trying to buy funds for cheap so we can sell them for a hefty profit quickly there are countless studies that shows that market timing is a Fool's errant The Motley Fools defines Market timing most accurately “A strategy based on predicting short-term price changes and securities which is virtually impossible to do” learn from the best and focus on long-term Investments not short term.
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