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  1. #1

    How should one approach money?

    I am sad to say that I am financially illiterate. I do not know anything about money except that you use money to buy stuff. I didn't receive financial education at home or school, and video games don't teach you about money, too.

    I have bought some books that speak about money, but they are revolve around self-help gimmicks (feel-good books) or books that expect every average person to be capable of becoming the next Microsoft or Apple.

    What monetary concepts are crucial? Where can I learn how economy works, so I could understand what an investment is, and what's an interest rate and how banks work in a context that allows me to be smart about my finances?

    I came across several YouTube videos where the dude says "saving money" and "spending less" is not what the "1% rich" do to save money. It's having infinite sources of income that allows them to live as extravagantly as they can without repercussions... that's ridiculous.

    There are also several dilemmas in the making: if you work in a traditional job, should you work just enough to be legible for a paycheck, or should you work too hard to solidify your position in your job? Should you buy high quality things for a higher price so at least these said items outlive their value, or do you buy second hand items for a cheaper price and risk paying more in forms of replacements?

    I am using extreme restraint to not buy stuff I don't really need, and I go out of my way to find cheaper alternatives. I am also modifying my daily routine to save money (eat at home instead of eating out etc).

    Really, how to approach all of this?

  2. #2

    Re: How should one approach money?

    Quote Originally Posted by throwawayeh View Post
    How should one approach money? What monetary concepts are crucial?
    Hi Throwaway, a couple of youtube videos that you might want to see / have seen already:

    What is Money? - YouTube (https://www.youtube.com/watch?v=3IhxYSImsW8)

    How is Money Created? Ė Everything You Need to Know - YouTube (https://www.youtube.com/watch?v=mzoX7zEZ6h4)

  3. #3

    Re: How should one approach money?

    I would suggest trying to locate some good, fundamental texts on how to handle money. I would focus on the practicalities of it -- budgeting, planning, saving and investing. You're looking for something at the intro level, a "Handling Money for Dummies" type book. In fact, I did a quick search, and here it is:

    Managing Your Money for Dummies:

    https://www.amazon.com/Managing-Your...a-298057114060

    p.s. Just to clarify, I'm not implying that you are a dummy. I've read several of these "books for dummies" or "idiot's guide to...". They are often very helpful introductory guides to various subjects, written by people who know the area well. They are designed to be easily understood, and they cover the basics well.
    Last edited by Eddie Haskell; September 15, 2021 at 4:48 PM.

  4. #4
    Senior Member mgtower's Avatar
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    Re: How should one approach money?

    Make as much as you can, as fast as you can, and shore up your investments, money is a statement of personal value, investing in knowledge, tools, and knowhow increases your marketplace value! Stay clear of mentally stagnant employment, those jobs are for machines and machines only do one thing!
    Any man that seeks leadership outside himself has a fool for a guide.

  5. #5
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    Re: How should one approach money?

    A lot of it is common sense. Success with money depends a lot on what you donít do with it.

    1) Donít go out to eat, not even to Dunkin Donuts for coffee. (Never mind what your friends are doing.) If youíre working, bring your lunch with youósomething you made at home.

    2) Donít get rid of anything for something better/newer/shinier if what you have today is still giving you good service.

    3) Before you spend even one dollar on something, ask yourself how that expenditure is going to benefit you financially five years down the road.

    4) Donít carry a credit card balance. If you have one now, your top priority should be paying it off, even if you have to subsist on baked beans and tap water until it's gone. From then on, pay the balance within the 30 day no-interest window.

    5) Donít take out car loans. Instead, save for your next car starting as soon as youíve paid cash for the one youíre buying today. (Yep, it takes discipline, but you can thank me later.)

    6) Donít buy junk products. Read trustworthy reviews by real people whoíve bought the products youíre interested in. Always go for reliability over feature set.

    7) Donít buy for image. Buy for long-term quality and functionality.

    8) Start investing, but start by finding a good financial advisor. Don't invest through a bank, though. And don't make your own financial decisions, because you'll never be as fast or as smart as the day traders and the computer systems that react with microsecond speed. If you have to start with $20 a week, that's fine. The idea is to make routine investments part of your daily life, like paying your monthly utility bills. Keep kicking your weekly investment up higher and higher, to the extent you can withstand.

    Thatís some of it.

  6. #6
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    Re: How should one approach money?

    Listen to what kru-kut wrote.

    When I was your age, long before the internet, I ran across a pamphlet that changed everything for me, in a good way. It spelled out a number of steps to shape my thinking about the money I was making. It has been 40+ years and I don't know what happened to that pamphlet, but I remember the back page listed the rules to follow. I only recall from memory two of the rules, perhaps the most important:

    FIRST RULE: PAY YOURSELF FIRST
    .
    .
    LAST RULE: GET STARTED TODAY

    I googled those two rules, didn't exactly recognize the pamphlet online but I did see links like this one (notice I made bold the two rules I had recalled):

    10 Ways to Stop Living Paycheck to Paycheck (and Become Financially Independent)


    You can stop living paycheck to paycheck no matter what your current financial situation is, all you need to do is make some smart, lasting changes to see huge results!

    Stop Living Paycheck to Paycheck in 10 Simple Steps
    1. Pay Yourself First
    2. Create a Spending Plan (Budget)
    3. Track Your Spending
    4. Track Your Net Worth
    5. Build an Emergency Fund
    6. Open a Brokerage Account
    7. Negotiate Your Bills Lower
    8. Add Extra Income Streams
    9. Change Who You Spend Time With
    Step 10 Ė Think Long Term
    You Can Do This. Start Taking Action Today!
    The concept of pay yourself first was a word twist that threw me when I first saw it but oh boy did I catch on quickly. In the early days, starting out in my career, when I wanted to payroll deduct 50 bucks into savings, I'd make it be 55 bucks. Instead of later increasing it to $100, I would make it $110. If I got a scheduled pay raise, I'd add that to my savings and pretend I didn't receive a pay raise. Like kru-kut says, Keep kicking your weekly investment up higher and higher, to the extent you can withstand. It became a fun habit and watching my savings grow (Step 4, above) was great reinforcement.

    Tracking my spending let me understand where my money was going. I purposely haven't carried a credit card balance since 1980, paying no interest ever, and still my credit score is always 810 or higher.

    As kru-kut advised, I did not copy what my friends did. If you do what other people do, you will have other people's problems. Stay focused and keep your eyes on the prize.

    I retired at age 56 and have enough money to live comfortably until I die. I directly thank that pamphlet from my youth. How lucky was I to have had it. You won't be sorry that you planned for your future.

    Across the years, I've always said, Tomorrow always comes. How will you be there to greet it?

    Now that my tomorrow has arrived, I thank my younger self every day.
    The two most important days in your life are the day you were born and the day you find out why. - Mark Twain

    The mass of men lead lives of quiet desperation.
    - Henry David Thoreau

    There are 10 types of people in the world - those who understand binary, and those who don't.

    Suitable for bookmarking: www.fakehatecrimes.org and www.breitbart.com/tag/hate-crime-hoax

  7. #7
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    Re: How should one approach money?

    One thing that helps me with money is that I'm not married, I have no kids and I have no debts (meaning interest) that I can't pay off in a single month. Those are just expenses you don't need. I was in debt for 7 years, having to pay down the minimal since my money was limited back then. Since January 2013, there has not been a single month I couldn't pay off my credit balance in full, and it gave me a credit score of 802 according to Credit Wise which is owned by Capital One.
    It's a man's world and we need to take it by the throat and make it give us what we desire.

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    Re: How should one approach money?

    How you make you money affects you almost as much as the amount you get. I grew up in wood products, which was always a boom or bust industry. If the markets good, you might get overtime. If not, then it's recessions, shutdowns and layoffs. I never went on strike, but my old man did a time or two.

    Then wood products tanked, and I found myself in a much lower paying gov job. Now I did get a layoff or two, but overall it was much more steady work. And you know what, it was actually easier getting by, at least after getting a little more money. So for me, slow and steady worked better than boom or bust. The trouble with that is you lose more during the bust than you gained when things were booming.
    Last edited by frog; September 19, 2021 at 1:29 PM.
    Every day I make the world a little bit worse.

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    Senior Member mgtower's Avatar
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    Re: How should one approach money?

    Quote Originally Posted by frog View Post
    How you make you money affects you almost as much as the amount you get. I grew up in wood products, which was always a boom or bust industry. If the markets good, you might get overtime. If not, then it's recessions, shutdowns and layoffs. I never went on strike, but my old man did a time or two.

    Then wood products tanked, and I found myself in a much lower paying gov job. Now I did get a lay off or two, but overall it was much more steady work. And you know what, it was actually easier getting by, at least after getting a little more money. So for me, slow and steady worked better than boom or bust. The trouble with that is you lose more during the bust than you gained when things were booming.
    The flipside of that coin; How you spend money directly effects the value of money you make.

    While others are drinking, whoring, and laughing their lives away, the frugal man is always investing in his future arrangements with the time and money he has today.
    Any man that seeks leadership outside himself has a fool for a guide.


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