5 More Money Ideas to Enhance Your Life

Most personal finance books stretch 150-250 pages but the best concepts can sometimes be captured in just a few paragraphs. Here are five more random ideas (see my previous blog post for the first 5) that you can reflect on and incorporate into your financial plan.

1. Link your passion with your career

How many people do you know who count the hours, days, or years left to their own retirement? While it may be unrealistic to wake up every morning excited to tackle the challenges of your work day, there is a big difference between loving what you do and hating what you do. Of course most of us need to work for a living but, if time is precious, isn’t it better to earn a little less and enjoy the 40 hours a week we need to put into our jobs? It is never too late to re-consider where your passions lie and re-tool to seek work that you are passionate about. We live in a world where the average person switches careers 3-5 times during their working life, so you won’t be alone if you take steps to make a change this year.

2. Buy experiences over stuff

Much has been written about what drives ‘true happiness’, and apparently, but not surprisingly, it is not the new toys we buy but the experiences we create that drive contentedness. What does this mean? Perhaps instead of buying a new car, you should consider buying a good used car and investing the difference in a family trip. Perhaps going Mini-Putting is a better use of $30 than another storage bin from Walmart. When you look at your monthly spending, make sure there is room for experiences that simply have a ‘longer life’ than the latest new attention-grabbing widget that will lose its luster sooner than you can imagine.

3. Watch the Latte Factor

Okay, you’ve heard this one before. It’s the little things that can whittle away your wealth. I don’t whole-heartedly believe that, since the big decisions (cars, homes, lifestyle, debt management) can make or break an individual’s net worth trajectory far easier and faster. However, the difference between making 5 purchases a day vs. 10 certainly impacts one’s ability to save. And yes, $4 dollars a day can add up to over $100,000 over 30 years so you want to make sure you’re getting good value from your small purchases. If you add a ‘value’ filter to your wallet, you’ll perhaps spend a little less and appreciate your spending a little more.

4. Keep your investing simple

It seems the more people know about investing, the worse their portfolio returns. Over-confidence breeds mistakes in investing. The problem with thinking that you know a lot about investing is that the collective wisdom of the overall market is generally smarter than you. Remember, there are thousands of brilliant institutional investors who collectively dictate the prices of tradeable securities. If you let low costs, personalized asset allocation (the right mix of stocks, bonds and cash) and inertia do their thing, you will do far better than most active investors. Don’t get in your own way by learning how you can beat the market and finding out later you can’t.

5. Keep money in perspective

The money category is a dangerous one. Managed well, money can improve your lifestyle, bring you some amount of peace and allow for wonderful generosity. Managed poorly, it can destroy your work, your health and even your relationships. Recognizing what money cannot do is an important part of keeping money in perspective. It is far from the most important thing in life. Don’t let it take you over, regardless of whether you have a little or a lot. It won’t love you back. Manage money responsibly and you’ll be content. Follow these five principles – and the five that preceded them – and you’ll be well on your way.

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