Anyone who wants to build up something financially avoids debts or pays them off. “People who understand interest deserve it. People who don’t understand them to pay them.” The quote is from financial adviser Carl Richards.
you live smart Be careful with your money. Saving and investing go into your blood. It has become part of your life. You can do this automatically via an ETF stock savings plan, so you don’t have to set aside time for it.
Many Germans are afraid of poverty in old age but are not doing enough about it. Real estate can help as an investment, but it can be tricky. There may be trouble with the tenant. Expensive renovations etc. can occur. Craftsmen can be expensive.
Let the ETF savings plan run stubbornly and steadily
Maybe start an ETF savings plan like bestselling author Paul B. Brown does. It’s pretty convenient. Great for sloths. Brown’s father was a stock gambler who suffered from enormous overconfidence. Dad’s trading was a mistake: his timing was bad. Taxes and transaction costs kept piling up. So the son decided to do the opposite. A few decades ago he developed a do-nothing depot. He checked his depot twice a year to make adjustments. That was it. It couldn’t be fooled by the stock market. Only two days a year.
Journalist Brown rejected active funds. Why? The annual fees, front-end loads, and high total expense ratio (TER) were too expensive for him. To this day, he prefers low-cost index products (ETFs) because most active fund managers fail to consistently outperform the benchmark.
Instead of “buy and hold,” some juggle stocks their entire lives. Everyone has to know that for themselves. But studies indicate that investing patiently bears more fruit. Others think they can buy their happiness, or at least the “appearance” of success, with stuff. You are wrong. You take on debt. It can become addictive.
They show their material possessions on Facebook and Instagram: Modern houses, watches, jewelry, fashion, expensive furniture, kitchen island, fast car, junk… Of course, you don’t see the debt that comes with it.
It’s a crazy cycle of more stuff = success.
The sham world of influencers
HBO made a cool documentary about the world of influencers. The broadcaster portrays a dubious circus of followers, clicks, and advertising: “Fake Famous”
Comedian Oliver Pocher also takes a critical look at influencers, which I think is good. He calls it “screen control”. Teens get their noses, breasts, etc. done to look prettier in front of the camera. Despite Corona, you travel around in world history. They sell expensive, sometimes dubious products on Instagram to collect commissions.
Looking only at the outside is probably the wrong approach. I believe that less is more. Less pressure, junk, show…. Being debt free means less stress, worries, and fears.
You could afford a bigger home. For what reason? You are happy. Being debt-free gives you a liberating feeling. It is also helpful to have a large deposit and money in the bank. What’s so bad about that?
I wish all readers happy savings. Stay healthy!