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February 2, 2022
Personal finance is complicated. There can be unlimited variables that go into making a single “good” financial decision, let alone everything that contributes to a lifelong quest for wealth, security, and happiness.
That being said, we recently asked people in the NewRetirement Facebook group to simplify their money philosophies. We asked, “What is your best financial advice in 8 words or less.” The group delivered (usually within the word count) a tremendous amount of wisdom.
The greatest number of responses – more than one third – involved guidance for how to spend (or not spend) money. The second most popular category involved advice for savings and investments – these tips were varied, but complementary.
Overall, each tip is smart and worth consideration. However, Howard may ultimately be right. He suggested that the best financial advice is: “Don’t limit advice to 8 words or less” to which we might add, “Do what is right for you, not everyone else.”
It is somewhat surprising, but out of 200 responses to the question about financial advice, there were only two that seemingly challenged the premise. Are these perhaps the best answers?
One word: health. (Long)
The only benchmark is happiness. (Darol)
People had a lot to say about how they thought money should be spent and not everyone agreed with each other – especially related to boats and horses.
Below we separate all the spending advice into 5 categories:
Boats and horses are notorious for being expensive to maintain and not used as often as hoped. However, not everyone agrees that they are a bad use of money.
Don’t buy a boat. Don’t buy a horse. (David)
Buy the horse… It is cheaper than therapy. (Michele)
Buy the boat. (Pat)
Don’t put your horse on a boat. (John)
Remember that convenience costs money. (Barbara)
Drink water when you go out to eat. (Rick)
Don’t go to coffee shops. (Amy)
Don’t go to the Superbowl. (Bill)
Always take free beer whenever it is offered. (Glenn)
Travel as much and as soon as possible. (Anita)
15 year mortgage. No car payments. Enjoy life. (Jim)
Don’t buy what you don’t need or use. (Valerie)
Debt free. Professional guidance. Be smart. Enjoy life. (Gerard)
Live within your means and still enjoy life. (Trisha)
Be frugal, but don’t forget to live now. (Mark)
You can’t take it with you. Enjoy today! (Pat)
Every dollar you spend now is worth $300 in retirement. (Kathy)
Be modest with big spends – houses and cars. (Rob)
Limit spending on depreciating assets. (Larry)
Cut wasteful spending. Buy needs not wants. (Eileen)
Learn to distinguish between “needs” vs. “wants.” (Tish)
It’s what you spend, not what you earn or save. (Tim)
Create a budget. Stick to it. (Kimberly)
Create, update and review your budget, regularly. (Glenn)
Avoid debt, invest regularly, make coffee at home. (Joe)
Live below your means, stay out of debt. (Melissa)
No debt. Home cooking. Mutual funds. Savings account. (Stephanie)
Live within your means and save and invest. (Daniel)
Spend less than you make. (The Retirement Manifesto)
Spend less than you make. Invest the gap. (Rebecca)
Pay cash for everything. (Dave)
Can’t afford it? Don’t buy it. (Patty)
While income is the foundation of most people’s finances, there were surprisingly few tips offered in this category.
Pay yourself first. (Doug, Scott, Elaine, Shirley, Kristine and Tom)
Rental property is a big pain. (Pat)
Some money is not worth having. (Steve)
Own your own business. Live below your means. (Richard)
Keep working. (Elaine)
Earn, save, and invest. Repeat. (Kevin)
Get a second income. Like a spouse. (Brad)
It is clear from the genuinely sage savings and investment advice offered below that many people who use NewRetirement are disciples of Jon Bogle (Vanguard), Warren Buffet, JL Collins, the experts and many of the ideas behind behavioral finance.
If you want more in depth (certainly more than 8 words) guidance on savings and investments, browse 28 retirement investing tips from today’s financial geniuses.
Or, listen to the NewRetirement Podcast where you’ll find discussions of many of the themes hinted at below.
Read A Simple Path to Wealth. (Bobby and JD)
It’s time in the market not timing the market. (Marcos)
Buy and hold. (Michael)
Rule #1: Don’t lose money. (Rule #2: See rule #1.) (Warren Buffet as quoted by Patricia)
Invest early. Invest often. Stay the Course. (Chad)
Save. Start early and do it consistently. (Kevin)
Invest early and often. (Chris)
Start saving early in life. Compound interest. (Joey)
Save the amount of your raises. (Rob)
Save more, spend less. Invest the rest. (Lemuel)
Don’t mix insurance and investments. (Sean)
Buy and hold index funds. (Saul)
Buy low fee index funds. (Tom)
Save. Invest. Then spend. (Nicholas)
Invest for the long term. (David)
Save early. Save often. Don’t overthink it. (Mike)
You never lose money taking a profit. (Tom)
Rebalance portfolio every 4 months and then ignore. (Burt)
Buy low. Sell high. (Paul)
Don’t invest in something you don’t understand. (Dan)
Save as much as early as you can. (Greg)
Compound interest, the eighth wonder of the world. (Mark)
Start young and buy the dips. (Paul)
Save more. (Elliot)
Invest. Don’t speculate. (Michael)
Stop looking at your stock app. (Darcy)
Max your retirement accounts. Start early. (Andrea)
Don’t panic sell. (Wagner)
When you save into a tax advantaged vehicle, you get all the benefits of saving, plus you give yourself more money because you’ll pay less in taxes.
Redirect your money to tax advantaged vehicles. (Brett)
Convert to Roth IRA. (Gregory)
MAX out your retirement accounts ASAP. (Kathy)
Invest in the Roth & HSA early. (Alisa)
Invest in your future self. (Chris)
Start saving early. In your 20s. (Mark)
Don’t underestimate your future retirement expenses. (Greg)
Never too early to start planning and saving. (Gary)
Make good behaviors automatic. Add friction to bad. (Zach)
8 syllables: Au-to-mate ev-ry-thing to-day. (David)
Get an expert. (Jill)
Failure to plan is a plan for failure. (Mary Lou)
Budget. What gets measured can be improved. (Mark)
Prior planning prevents poor performance. (Jack)
Have a plan for a windfall and a crisis. (Lila)
Do your research. Stay the course. (Thomas)
Follow steps [Dave Ramsey’s 7 baby steps.], in order, no changes, as is. (Bo)
There were three types of advice offered related to friends and family.
It’s cheaper to keep her. (Kris)
Be good to your wife. (Mick)
If it flies or floats, (or $@#!s), rent it. (Herb)
Two words only: Don’t divorce. (Ryan)
Marry the right person. (Susanne)
Love the one you are with. Divorce is expensive. (Judy)
Get a prenup. (Mimi)
Duel income. No kids. (Jolene)
Public schools for kids. (Dorothy)
Send your kids to in-state college. (Scott)
Don’t compete with the Joneses. (Walter)
Do not co sign on anyone’s loan. (Sally)
Marry for money. (Jun)
Leave the kids enough to do something, but not enough to do nothing. (Dan)
Make your own path. Ignore naysayers. Full steam ahead. (Eric)
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