I was just cruising around on Yahoo Finance and I ran across this article which sums up pretty nicely what I think about personal finance. 5 Power Truths for Wealth Builders by David Ning.
I particularly liked the ones about considering the downside and a little effort can lower your expenses. With regards to considering the downside, he mentions stocks and how many people don’t consider that that hot stock which seems to be going up and up will also come down. Successful stock market investing involves staying the course and sticking with your plan, even in down times and instead of panicking and selling, those times should actually be thought of as buying opportunities. Anyone who can’t live with the reality that the value of their portfolio will go down as well as up probably shouldn’t be investing in stocks.
The second thing I liked is how a little effort can lower your expenses. He mentions things such as being too lazy to comparison shop, failing to negotiate a discount and not waiting for the sale that is inevitable around the corner. I have to admit that I’m sometimes guilty of this because my salary has increased significantly the last few years and it didn’t seem like such a big deal, but paying attention to this stuff can actually go a long way towards achieving financial independence. I plan to make this a big priority in my life when I move back to Canada and hopefully I can get my initial set-up costs and monthly expenses as low as possible, especially since I’ll just be bleeding money for a couple years going back to school. I anticipate doing some part-time work and still have my passive income thing going on, but I will likely not be able to cover my monthly expenses.
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