The times are changing. We all see it, from the housing market to the grocery store and gas pump to airfare. Inflation and price gouging have left no corner untouched, and what would have been a sufficient middle-class family income 15 years ago is now barely scraping by.
Many of us are wondering what on earth to do. It seems like we can’t win, and financial illiteracy only exacerbates the problem. Taylor Easley of Easley Wealth Management has given us a few helpful investment tips on how to train ourselves and our children to make the most of what we have.
The biggest mistake people make regarding their finances, Taylor says, is reacting emotionally. “Letting emotional bias, a psychological phenomenon, guide their investment decisions. (Especially) in which an investor decides based on their preconceived ideas of what will or won't work without considering the evidence.” Of this, we are all guilty.
Perhaps our family has only ever bought this brand, and we do the same. Friends or influencers online don’t like this restaurant, so we decide to eat somewhere else. A celebrity we admire endorses a product; let’s buy it regardless of the reviews or whether it even works or not. It’s the same financially. We have notions about what we think is the best way to handle our money based on external influences, but not necessarily expert ones.
Unfortunately or fortunately, Taylor's absolute best advice for those wanting to save is to start early. “The longer you invest, the larger the compounding effect becomes. Albert Einstein famously referred to compounding interest as the eighth wonder of the world.” Of course, it’s never too late to start and, today, there are far more untraditional saving opportunities online that offer higher interest rates.
For those of us with children, we have the opportunity to start them down this road now. Open a Keiki account and start helping your child with their financial literacy so they feel prepared to enter adulthood. According to Taylor, the most crucial part of this process for them is “Learning how to delay gratification, which will lead a child to become a saver/investor versus just a consumer.” In today’s world of smart devices, online shopping, and in-app purchases, this may be the toughest lesson of all.
Not just for the children, either. Our culture has trained us to immediately fulfill our wants and ignore self-control while flooding us with financially disastrous opportunities. Social media is especially tangled up in this wallet-draining web, with up to 40% of the content you see being paid ads and an untold number more unpaid. The idea that absolutely anything can be on your doorstep in mere days is often devastating.
In short, strangely and certainly not without difficulty, the best thing for your wallet’s health may be time away from your device.
Learn more at RaymondJames.com/EasleyWealthManagement.
Learning how to delay gratification, which will lead a child to become a saver/investor versus just a consumer.