Yesterday, I asked a simple question: What are the Top 10 Rules of Money?
Rather than just leave it as a blog post, I brought it to Twitter:
There there were lots of broad and deep responses, filled with thoughtful insight. My column on the idea of the rules of money will be out Monday, but in the meanwhile, some highlights I gleaned from FinTwit:
These three were suggested by many people:
“Live below your means.”
“Compound interest is magic.”
“Pay yourself first.”
They are popular for obvious reasons — they include a sensible approach to budgeting, and that leads to having cash to invest, which lets your money make you more money.
From John O’Connor
“There is no growth without risk taking. It’s an iron law of life, not just money.”
Risk and reward are two sides of the same coin. People often forget that.
Charles Rotblut of AAII was one of many who suggested several rules:
Basic Rules for Money:
1) Define your goals and have a plan for reaching them; update goals & plans as your life evolves
2) Automate the process of saving as much as possible
3) Have a consistent, well-defined approach to investing
4) Follow rules 1-3
James Werner is a CFP, so his observation has planning component to it:
“Money is powerful when it has a purpose. Only the holder can give it purpose. Might be survival, opportunity, growth, charity etc. True financial planning is only achieved when every dollar has a purpose.”
Ann Lee Gibson, now comfortably retired, suggested:
1-Discover what you truly love; support your passions with experiences.
2-Grok the power of compound interest.
3-Early on, find a GREAT financial analyst; do what s/he tells you to do.
4-Never buy an annuity.
5-Don’t agonize over your mistakes; everyone makes them.
Brett Specter (how do Superforecasters get certified?) reminds us that:
“Money decisions are also time decisions. Learn how the two interact.”
Marc Dore writes:
“It’s not the buying and selling that makes you money. It’s the waiting.”
I like Brian Portnoy’s philosophical approach:
The path to funded contentment has 3 steps:
1. Define your purpose
2. Set financial priorities within that context
3. Make appropriate decisions
And iterate this process throughout your life.
Last, Yannick Kälber, a systematic investor out of Germany:
“Your last pair of pants has no pockets.”
That is both dark and deep.
These are just a few of the ideas I pulled from the responses. There were literally 100s posted, and I suggest you check out the full list — you are sure to find something that intrigues you.
When used properly, Twitter can be amazing . . .