Earning money is good. But keep in mind that it's never the end goal. Don't be too desperate and compromise morals just to have more. You might succeed in hitting a big one today then have your life gone the next day. Or you might live long enough to regret doing a grave thing in the past for the sake of money that will ruin the rest of your future.
Being a good steward of things here on earth is a responsibility given to us by God. We are expected to make good use of our skills, strength and talents to take good care of our family, surroundings and our own selves which includes financial matters.
Earning and building wealth to put into good use is always a great thing. But never forget that all material things are temporary. We might be capable to buy all the things we want but we can never afford to lose sight of the more important things in life which are everything beyond material things and money.
If you want to earn for a living, your goal must not be how to make money. Your focus must be on offering something of value to others. It may be your skill, talent or some product that improves other people's lives. People pay for things that makes their lives better and easier. Look at yourself, then on the others. What problems do you have now and what could be your solution? Think of what you could do or create to make lives trouble-free. Then build it. Make people know about it and you can start from that.
You call it prudence, others will see it as playing safe. Your passion for planning of your future is perceived by some as dissatisfaction and ungratefulness of your current situation. Laziness and hopelessness are sometimes interpreted by others as contentment. Or maybe to use it as an excuse to do something.
Contentment is not when you keep on complaining about your situation while criticizing those who are striving to improve their lives.
Investing for your future must not be mistaken as a sign of
discontentment and ungratefulness of your current situation. It actually
means you are grateful and contented with your life that you want your
loved ones to feel the same or better even when you are gone.
The most perfect timing to start investing is now. Tomorrow will be late. Yesterday is already past. Timing should be one of your last concern in investing. It should be which investment you want to start with and then begin right away upon decision.
Flashy cars, big houses, top of the line phone models, signature shoes and gears, these things are what usually capture the attention of those who get hooked and schemed by shady types of investments. And there are lots of them. Warnings are provided by the government authorities but many are still falling victims to them. Ignorance is one reason that it happens. But there are many who are supposedly smart people but still get caught on this trap not because they are not aware of the possibility of being scammed but due to a great attraction of a possible quick chance of a home run. Greed got into them and it is a far more dangerous black hole that pulls people strongly into the depths of poverty compared to ignorance.
It is also one thing that scares people away from legitimate investments. And many of those who got victimized couldn't move on and thought that everything else are the same. Whenever they hear someone talking about money and finances, they move away. Though it's really so easy to know whose professing real financial literacy from who's not.
If someone's teaching against materialism, showing you the way to detachment from worldly riches and becoming good stewards of what you have, then that is FINANCIAL LITERACY. It is really that simple. And that's also the only solution to work on your financial woes. The more you crave for more money without the correct mindset, the more financial problems you'll have. The more you detach yourself from material things, the more content and happy you'll become.
I lost a lot of money before but not because someone stole it but then, I didn't exactly know what happened that I just wished that I knew it was indeed robbed. And there were days that it felt like I got more stuff than what I could afford. It is like magic. But it's also called budgeting.
There are many techniques out there that offer ways of budgeting your hard earned money. For sure that many of them work since they are mostly based on experience. I tried using some of them. Some worked, some did not. But I noticed that it's not the technique that is causing me to fail or not in managing my finances. It's what I did first before applying the technique that gave better results. Or maybe it's just about it. I prioritize.
Budget consists of 2 major parts, money at hand and the things you need to pay for. Those which you are not capable of buying because of lack of money are categorized as out of budget. Therefore you allot your money only for the things that you need to make sure you are within your budget.
It's basic and I'm sure you know about this already. But there are still a lot of us that find budgeting too difficult even for those who get paid a lot higher than the average earners because we are not being honest with ourselves. Sometimes, you get confused with the things you really need from those you just think you deserve to have. There are things that you buy that you can't afford though there are cheaper options where quality is not sacrificed. And there are things you buy that you think you should have though you don't really need. There's also this tendency to upgrade just because you earned a bit higher even if it's not necessary.
Let's also not fool ourselves that we are "investing" on unnecessary clutters as discussed on this blogpost. These are the biggest killers of budget. We tend to justify buying the things we just like and then later on wonder what happened to our budget.
Bottomline is, you don't need to do any other budgeting technique when you only buy what you need which you are financially capable of including your savings and investments. By having the familiarity of your cash flow and the discipline to buy only the things you can't live without, you don't have to do budgeting any more in your entire life.
I lost almost half of what I invested in the stock market last 2008. Just this Monday, Aug 24, things seemed to be repeating all over again. This might mean that it is or maybe it is not. No one really knows, though there are indicators that major corrections are about to happen. We have been enjoying bullish movements for the past years and we all know that it's gonna happen sooner or later.
I won't give tips on what to do about it. I'll leave it to those more experienced and seasoned traders. I read them also by the way. But what I just want to do here is to share to you and at the same time remind myself of what I experienced during the last recession. I saw people losing jobs then. Just one snap and they are jobless. Then stock prices were free falling. Foreign and local fundies were selling off and the individual traders were losing hard earned money. Property bubble was the culprit then. Now, they said it's the instability of some economies in Asia (China) and Europe (Greece, etc). Other factors come into play as well. Wars for example.
For the individual traders, it matters less what the cause is. The effect is what hits them directly into their pockets. We may be able to understand all these things and know the steps to do when it happens. But the most important thing I learned in 2008 was that, even if you think you know what to do, it's never that easy. You know the steps but will never be sure when to execute since the market cycle is only obvious on hindsight and not when you are currently in it. And then there's your emotion. There might be signals on what to do but your feelings will always get in the way.
As important as knowing what to do is to be prepared emotionally, physically and mentally for the grind. You must toughen up your skills, composure and physical body as much as you can. Your readiness will dictate what your actions will be during crisis. It will be a long tough battle so being generally healthy is of high importance. Make no mistake about it. It's a war out there.
Complacency and "peacetime" will provide you the moment to equip yourself but it is always during the moment of danger that your maximum potentials will be triggered. Your knowledge will be your ammunition. But if your body is not capable to carry out your game plan, every weapon that you carry will be useless. Also remember that the experience of how you handle these moments will be the most valuable lessons that you'll bring throughout your investment journey. Everyone of us will go through the same economic cycle bringing in the same fundamental knowledge of it. The differentiator would be nothing else but your self so being healthy is your best advantage.
So everyone, enjoy the ride and hold on to your seats as we go thru this roller coaster ride of stock market and investments.
