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FI Weekly – February 27, 2024: Psychology of Money Lessons, Memento Mori, No Complexity Required

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. American Express is a ChooseFI advertiser. Disclosures.

Psychology of Money Lessons

The ‘Compounding Quality’ account on Twitter is one of my favorites, and they produced a top quality graphic that is worthy of your time and attention:

18 Timeless Lessons from the book The Psychology of Money

Morgan Housel’s book has a comfortable place in my “essential 3” personal finance books alongside ‘The Simple Path to Wealth’ by JL Collins and ‘Die with Zero’ by Bill Perkins.

If you haven’t read Psychology of Money, grab it from the library and in the meantime, here are my 3 favorite lessons from Compounding Quality’s synopsis:

· Never Enough: “The hardest financial skill is getting the goalpost to stop moving. Happiness = Results minus Expectations.”

· Save Money: “Building wealth has little to do with your income or investment returns, and lots to do with your savings rate. Savings are the gap between your ego and your income.”

· Freedom: “True wealth is having time to do what you want to do, whenever you want to do it.”

Memento Mori: Practical Application

The Stoic concept of ‘Memento Mori,’ which loosely translates as “remember death,” has been on my mind lately, and even though it sounds morbid at first glance, I think it’s a powerful push to truly live life.

When taken together with ‘The Tail End’ article (visual representation of your life and the time you’ll spend with loved ones) on Wait But Why, Memento Mori helps me realize something more viscerally about life:

This ISN’T a dress rehearsal.

We have one shot and for me I’ve reached (blown by?) my halfway mark.

How I’m remembering death, or more accurately the death of a major season of my life, is this:

I have a running countdown that I manually update (again, so I can viscerally feel it) each morning that shows the number of days until each of my daughters goes to college.

Seeing that number get below 1,000 days for my older daughter has emboldened me to really spend more quality time with her and be truly present.

We just got back from a trip to Texas to go to three amusement parks together! She’s a certified ‘Roller Coaster Enthusiast’ and we put together this ambitious trip during a random 4-day weekend that we otherwise would have spent lounging around at home.

She hit her 100th lifetime “coaster credit” (different coasters ridden) and we had an absolute blast.

We’re already planning a trip this fall to North Carolina and Georgia and it’s only a matter of time before we head back to Florida to visit her favorite park (Universal Studios) and some other new parks throughout the state.

Find a practical application of Memento Mori in your life and utilize it to its fullest!

No Complexity Required

“I don’t know who needs to hear this, but if your financial life is complex, it’s because you, or someone you hired, wants it to be.

There is no magic net worth number above which complexity is required.”

John Stoj posting on Twitter

ChooseFI Community Taking Action This Week

“My 1% better is doing overtime at my job to make extra money. I’ve been thinking about ways to earn more money to accelerate my path to FI, and even considered potential side hustles. Then I had to do some overtime at work and realized it was the perfect answer. My organization is currently understaffed and management has been gently encouraging us to do overtime. I had been avoiding it (mainly for fear of getting burnt out) but doing some overtime will help me stay on top of my heavy workload.

Since I’m a government employee, I’m lucky enough to get paid time-and-a-half for working overtime. So working just a few hours of overtime can generate several hundred dollars each month that I can use to fund my brokerage account (I’m already maxing out my retirement accounts). Instead of spending time and effort researching and learning a side hustle, I can spend just a few extra hours a month doing a job I already know. I’ve even noticed that I have a more positive attitude about work. The extra hours are helping me to better manage my work, and helping my path to FI at the same time. Now, I feel more positive than ever about my financial future.”

– Jennifer

“My 1% better, I followed the directions laid out in Episode 474 with Denis Shapiro on Social Security and found out 2 cool things:

First, more of my teenage low-earnings years counted toward the 40 credit requirement than I thought, I just turned 26 and by the end of this year I should have all 40 credits required to one day qualify for Social Security (like most in the community I don’t count on this in my calculations at all — but still cool to know!)

Second, I was able to see every yearly amount that I’ve earned and was finally able to do the activity suggested in “Your Money or Your Life” and add up every dollar I’ve ever made. It was motivating to see that I’ve maintained nearly half of it in net-worth rather than squandering it to keep up with the Joneses.”

– Luke

“My 1% better is buying 12 copies of Pathfinders by JL Collins and gifting them to my 12 employees along with their Christmas Bonus. I’ve planted the seeds so I hope at least some will take hold and work toward living an intentional life.”

– Nathaniel

“My 1% better is saying positive affirmations in my mind. I learned that automatic negative thoughts are quite common in humans. But I can respond to those thoughts. I’m working on improving my life. I particularly like Louise Hay’s book ” I can Do It”. Because I CAN and I WILL do it. My next 1% better is I walked for 52 minutes yesterday. Again, not too bad from not being able to go 5 minutes just one month ago. Onward and upwards.”

– Sheila

“I wanted to share how I improved just a little bit this week from listening to Choose FI. At this point, I’ve become a long-time listener of the podcast and I’ve listened to every episode for almost the past 3 years! Sometimes I don’t always take action right away, but I love that I can go back and listen to the show when I decide I should take action on something.

For example, my 1% better this week was finally taking action and securing my online presence. I listened to episode 397 (Securing your financial life) with Tom when it first came out, but it took me until now to take action on it.

When I did get the motivation to take the action I loved that I had the memory of listening to the episode and the option to rewatch it! I ended up getting a password manager set up and changing the password to all my important financial accounts as well as some other top-priority accounts. I also purchased 2 security keys and locked down my email account and any other accounts that supported security keys.

I feel so much better knowing my online accounts are more secure now than they have ever been. Thank you for creating the ultimate crowdsourced show and sharing knowledge with everyone!”

– Zuhayr

“My 1% this week: After starting from Episode 001 in January of this year, I cut down a lot of my expenses and figured out how to spend less money and still live a happy life. After cutting my expenses, I was able to begin maxing out my 401k contribution from my previous 2% contribution rate. This is so exciting for me since I’m doing this at 24 years old.”

– Kayla

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. American Express is a ChooseFI advertiser. Disclosures.
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