On this episode, we’re jumping into the March Madness spirit by seeding some of your biggest financial life decisions. We have weeded through all the challenging financial decisions that you will come across in life and ranked the top 8. By carefully choosing how you decide these 8 factors, you could change the trajectory of your potential to build wealth over your lifetime. These decisions can make differences in the millions of dollars! Problem is, you don’t get a lot of practice at many of these decisions, making most of them only a few times over your life. So listen in, to hear a few ideas on many of these decisions that you’ve already, are currently or plan to make.
These 2 big financial decisions may surprise you!
Number eight on the list affects everyone differently since the type of car you drive can say a lot about the type of person you are. With the average cost of a car at $31,400, this is often the second largest purchase that most people make. What does the type of car you drive say about you? Spend some time carefully deciding what to drive, how often to replace your vehicle and whether to lease or buy. Number 7 is a costly choice, but it is a gamble that can bring the ultimate return on investment. You’ll want to listen in to hear how to bring about the best return on this important family investment.
How and why you borrow money is always an important financial decision
How much and how you borrow money over your lifetime will have a lasting effect on your ability to create wealth. How you get a loan, how much can you afford, and what the overall cost of the loan are all critical factors when borrowing money. You’ll also want to be able to decipher between what is good and bad debt? How much debt to take on is an important factor when trying to build wealth over a lifetime. Everyone has a different opinion about debt, listen to this episode to hear ours and to learn how debt can affect your financial stability.
Have you considered all the factors when thinking of purchasing a home?
Buying a home is laden with emotional influences that can hijack your rational decision making. When you buy a home, you’re not just purchasing a house so what are all the factors you should consider? What part of the country you live in can drastically affect how much you may spend on a home. Even further, choosing a neighborhood will have a larger impact than you may initially think. Choosing some neighborhoods could leave you feeling he pressure to keep up with the Jones. This is where it’s important to remember that the less house you buy, the more disposable income you will have to spend on your hobbies, your family, and your savings. Listen to this episode to hear all the considerations that you need to think about when purchasing a home.
How do you save your money?
The fourth item in our top eight ranking is how you choose to invest your money. Many of today’s headlines are ripe with reasons to not invest in stocks, nine years in to a bull market. But investing in stocks is an important way to build wealth over a lifetime. Having a diversified portfolio increases the cumulative returns that you’ll see over time. So why do so many struggle to maintain an appropriate allocation to stocks? Many understand that investing early in your life can more than double your investment returns over a lifetime. But our emotions often have different plans when tough times surface. Listen to this episode to hear how important stock returns are to your wealth accumulation. I’m sure you’re wondering what our top 3 picks are, but you’ll have to listen in to find out!
Outline of This Episode
- [0:27] It’s March Madness! Here are our top 8 financial life decisions
- [3:39] What kind of car you drive
- [6:26] How many children will you have?
- [8:38] How much and how you borrow money over your lifetime
- [12:07] The home purchase
- [15:26] The average allocation to stocks that you have
- [20:48] Having a compatible spouse
- [24:00] Your savings rate
- [27:47] Your human capital
Resources & People Mentioned
- JP Morgan Guide to Retirement
- BOOK – How to Win Friends and Influence People by Dale Carnegie
- Farnam Street Blog – Decision Journal
- Episode 45 – How Likely Are You To Build Wealth?
- Episode 30 – Buying a Car
- Lessons from the Millionaire Next Door
Connect With Chad and Mike
- Connect on Twitter @csmithraleigh@TeamFSINC
- Follow Financial Symmetry on Facebook