My two rules of building wealth are: 1.) Live below your means and 2.) Invest early and often!
Rule number one is simple. I think pretty much everyone gets the concept of spending less money than you make. But it’s definitely not easy. Sometimes life happens and you need to spend more money. Sometimes your impulses get the better of you and you want to spend more money. There’s a million reasons why it can be incredibly difficult to spend less than you make. That’s why living below your means is simple but not easy.
On the flip side, rule number two (investing) is actually incredibly easy. Yesterday I was playing cards with some friends and one of them wanted to know how to invest. We pulled up her Fidelity account on her phone and with about four clicks she was optimally investing her money. It was very easy. But, before you know which four clicks to make and why you’re making them you have to sift through a ton of complexity. From Wall Street traders frantically screaming buy and sell to crypto day traders claiming to get rich quick, how do you sift through what is real and what is nonsense? That’s why investing is easy but not simple.
I constantly get questions from new investors about investing. I imagine that they’re looking at a sparsely finished jigsaw puzzle and asking a specific question like “which piece goes here”? And I can (and usually do) answer that question, but I DESPERATELY want to paint the full picture for them so they get an answer that makes sense in its wider context.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Jeremy
