Money Is Everything … Until You Master It. Then It’s Nothing at All.

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6 Responses

  1. Yes, all of this! Money makes the world go around, but being obsessed with it or ignoring it makes for a difficult life. I choose to master my finances on a daily basis and that ensures that I’m not worrying about it on a daily basis. It’s a great trade off. Fantastic post Joe with words that the world needs to hear!

  2. Arrgo says:

    Good stuff here Joe and all very true! From what I see most people are their own worst enemy when it comes to money. But when you break it all down its not really that complicated. Come up with a plan or system, stick with it, and fine tune as you go. And good comment about not letting money become the focal point of your life. Its important and has its place but you dont want to obsess over it. Dont let your net worth become your self worth. There is more to life than money.

  3. Part of this is that the financial services spends millions and millions of dollars trying to convince everyone that managing your money is too complicated for the individual investor, which is why you need the help of a professional advisor (for a small 1% fee of course!). Continuing your food analogy, it’s like when you see charts showing you that the government spends $5 million a year advertising good nutritional habits and the food industry spends $3 billion encouraging you to eat chips and drink soda (made up numbers, but you get the point). It’s not a fair fight. Once lawyers figure out that they’re being fleeced, they usually get pretty pissed and then figure out how to do it themselves. As you said, it’s not that difficult – particularly not for someone that’s already spent 3 years in law school earning a JD.

    • Joe Freedom says:

      Right on. And these are the stories that turn out GOOD (i.e., the ones that figure out they are being fleeced and get pissed and that motivates them to do it themselves). There are others that fall prey to elite-status thinking–the mindset that Buffett talks about when he says that modest-means people tend to take his advice and invest in low-cost index funds while the high-income crowd never does. The thinking goes “well, I’m a bigshot Biglaw partner making seven figures a year, surely I can get a higher return than all those saps investing in cheap-o funds with Vanguard.” Then they put their money with a high-cost hedge fund and never quite figure out how to determine whether they are or are not consistently keeping pace with the market after fees. I recently had a conversation with an ex-colleague who had always been a shrewd DIY-er, and I was shocked to hear that he had moved to a wealth-management firm. When I asked why he said that they could give him access to desirable hedge funds and private equity. This is a guy that has now been making seven figures for probably 7 years or so, and my conclusion is that he finally gave in to the elite-status mindset. And hey, maybe he wins the lottery and ends up in that very small group of investors that can consistently beat the market after fees going the ultra-active route.

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