Wealth

Not getting The promotion

You Did Not Get The Promotion, Now What

Money Maroon

At some point in our lives, if you are an employee, a worker for pay, you will miss out on a promotion in view of someone else. This other person may be a current coworker or someone from outside the company. In either case, it will leave you wondering, why. Especially if you believe that the person receiving the promotion is less experienced and/or less qualified.

Be Graceful

Once a promotion has been given to another, congratulate that person. Rise above your feelings of disappointment and be professional. No matter how you may be feeling, your reputation matters. Do not come off as unprofessional or as someone who do not know how to deal with disappointment. By not being graceful or lashing out because you were passed over for a promotion, you may be confirming that you are not mature enough for the role. Be graceful, even if it is difficult.

Evaluate Why You Did Not Get The Promotion

If you missed out on a promotion, you will be hurt. This feeling is normal. It does not matter whether or not you really wanted the position or not. Just being rejected will have an effect. While you may be hurt, you must try to be objective. Was the chosen person better for the role? Where you misled about what is required for the role? Do you think that you were treated unfairly in any way?

If in the end you were objectively not the best person for the position, if you really want this position, it is time for you to add to your skillset. Work toward a direction that will get you where you need to be.

On the other hand, if you were truly the better person, find out why you did not get the role. Is there a bit of favoritism or some other isms at play? Did you have the credentials, but others did not believe that you were qualified or ready? If this is the situation, it may be time to begin advocating for yourself. Begin to show who you really are and what you know. At times, the most qualified person may not get the position. The role typically goes to those who promote themselves. Lots of idiots have been promoted because they know how to play the game.

Ask For Feedback

Ask for feedback. If you did not get a role that you believe that you are qualified for, ask for feedback. Note that most managers are terrible at giving feedback, so try to read between the lines. At times, when you ask for feedback, your manager may justify the case for the other person being promoted, without actually giving you the feedback you asked for. So read between the lines. 

Some managers will provide adequate feedback and provide a roadmap to being promoted.  This rarely occurs, but it does. When you have such a manager, you are very lucky. You are more so lucky if the roadmap provided actually leads to a promotion.

Some managers will flat out tell you that you did not get the promotion because you are needed in your current role. If this happens to you, it may be time to leave. It essentially means that you are too good at your job. The company is not incline to promote you and train two people to do your work, when they can simply keep you at that position.

Some managers may even say that you will be up next or there was a business need for a specific skillset or there will be more opportunities in the near future. It will really be up to you to believe if this is truly the case or not. Many employees have been strung along in the past with the promise of a position opening up or an opportunity that is just on the horizon. Be careful in how you approach these promises. Many times, these promises are only lip service for you to calm down and to move beyond your disappointment.

Review The Landscape

In your evaluation of why you did not receive the promotion, review the landscape. Were you best placed for the role? For example, were you told not to apply, encourage not to apply or told that there are certain requirements but then the chosen individual did not fit the announced requirements? There could be more at play here.

Take a step back and look at the individuals in the role that you did not receive. The requirements posted about the role may just be a preference but not really a requirement. The most important characteristics may not actually be posted. By looking at who previously occupied the role, or who currently occupies that role, you can gain a lot of information. 

Some corporations have a certain type that is elevated to certain positions. That may be education level, select schooling, sex, race or demeanor. When you look at the role you missed out on, do you fit? This is a real question and you must be honest with yourself? If you do not fit the role, it may be time to leave as it is unlikely that you will ever be elevated to that position.

Improve Yourself

If you received a road map that will lead to a promotion, if you believe that the recommended action would lead to a promotion, follow that path. Also, seek to improve yourself for the job you want with your current company but also for another company. Work to improve yourself not only for a promotion but also to better yourself. Take additional classes in an area. Volunteer for new assignments. Work across departments. Make your resume the best it can be for your future role or new job that you may be interviewing for in the near future.

Didn’t Get The Promotion, Leave!

If you believe that you were wronged, or you see your non promotion as a pattern of activities, begin your task of leaving. Many times when we work for a company, we may hear stories and rumblings of who is being promoted. It may not bother you at first because it was not affecting you, but once it affects you directly, you may see things a bit differently. If you are in this situation, know that this is how your company works, and they will likely not change. As such, it may be time for you to leave.

This does not mean announcing that you will leave or making an ultimatum. Simply prepare your resume and improve yourself. Over the next few months, keep an eye on job openings and apply. When the time is appropriate give your two weeks notice and move on. There is no reason for you to stay in a toxic environment. Especially if your non promotion begins to impact your mental health.

At times, once you give your two weeks notice, you may be offered a higher salary, you may even be offered a new role. Whether or not you stay at your current company or leave is up to you. But note and keep in mind what it took for the company to come up on your salary or offer you the new role. You had to threaten to leave. Will this be required going forward? This also does not bode well for you when times are hard and the company performs a reorganization to cut headcount, it is highly likely that you will be cut.

Conclusion

At some point in our lives, if you are an employee, a worker for pay, you will miss out on a promotion in view of someone else. This other person may be a current coworker or someone from outside the company. In either case, it will leave you wondering, why. Especially if you believe that the person receiving the promotion is less experienced and/or less qualified. In these situations, be graceful, evaluate why you did not receive the promotion, ask for feedback, improve yourself and if necessary, leave.

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Video Summary

The racial wealth gap

Closing The Racial Wealth Gap

Money Maroon

You would have to be living under a rock to have not noticed or heard of the racial wealth gap in the United States. This article will not address biases or racism, implicit or explicit. The focus of this article will be on high level ways to address the racial wealth gap. More specifically, what can minority groups do to increase their wealth.

Racial Wealth Gap Explained

The Federal Reserve reports that “In the United States, the average Black and Hispanic or Latino households earn about half as much as the average White household and own only about 15 to 20 percent as much net wealth.” White households hold 87% of the wealth and account for only 68% of the population. Blacks account for 16% of the population, but owns only 2.9% of the wealth. Hispanics hold about 2.8% of the wealth and accounts for about 11% of the population. These numbers are very telling. 

A striking stat is that the 400 richest American billionaires have more total wealth than all 10 million Black American households combined.

On average, the net worth of a typical White family is about 10 times greater than the average net worth of a typical Black family. Based on some calculations, Black families are expected to have $0 net worth by 2053. The same is expected for Hispanic families just 20 years later.

All things being equal, we would expect the proportion of the population to equal the proportion of the wealth. This is however not the case. 

Wealth Building

To really look at the wealth gap, let us take a look at the wealth drivers in the United States. Huge wealth generation traditionally comes from entrepreneurship, ownership of real estate and stock market returns. 

To address the racial wealth gap, these three areas are prime targets.

Entrepreneurship

When we look at businesses, and entrepreneurship generally in the United States, Whites owns about 70% of businesses, Hispanics 14% and Blacks 6%. In view of the wealth statistics, this is not surprising. Additionally, for all the amazing work being done in the start-up space, less than 3% of total venture capital funding went to Black and Hispanic founders.

The industries that minorities operate in further exacerbates the racial wealth gap. Minorities generally own firms in the service and retail industry, many serving low-income and minority communities. Therefore, many minority enterprises have missed out and are missing out on the boom happening in the high skill sectors and the tech industry.

To combat the racial wealth gap, increase minority representation in entrepreneurship, the high skill workforce and the tech industry.

Stocks

On average, about half of Americans are investing in the stock market. For the most part, stock ownership is highly concentrated in the upper class and the highly educated. Greater than 90% of those in the top 10% based on income owns stocks. Looking at the top 10% in wealth, 94% of those individuals own stocks. Minorities are not well represented in the top 10% in wealth and income.

Looking at the racial breakdown, about 64% of Whites own stocks. Only 35% of Blacks and 24% of Hispanics owns stocks. Looking specifically at wealth, for Whites, 24% of assets are in the stock market. On the other-hand, only 13% of Blacks and 10% of Hispanics’ assets are in stocks. This have huge implications. 

What this states is that over the past decades of growth in the stock market, minorities participated less and have less of their funds in the stock market. The end result is that minorities have reaped and continues to reap significantly less benefits from the stock market boom. The losses are significant. 

Therefore, to close the wealth gap, increase minority participation in the stock market.

Real Estate

You cannot approach the effects of real estate on the wealth gap and not appreciate the effects of governmental policies such as redlining. The past policies of redlining have detrimentally affected the wealth of many in the United States to the benefit of others.

Today, Americans have a home ownership rate of about 65%. However, 73% of Whites own the home they live in. Only 48% of Hispanics and 42% of Blacks own their homes. But owning a home is not enough. Where you live matters. The value of the home you own matters. For minorities, it is a double whammy. Not only do minorities own less homes, minorities homes are less valuable.

It is no secret that home prices have been on an astronomical rise since the housing crash of 2008. Based on the above, this raise in prices and in turn equity benefits those who own, more specifically those who own high priced properties. 

To close the wealth gap, increase real estate ownership in minority communities.

Conclusion

To close the racial wealth gap will take a multi-pronged approach and it is a more complex issue than we have addressed. We have not addressed the effects of slavery, and Jim Crow segregation. We however, identify three areas that are the foundation for wealth generation in the United States. These areas are entrepreneurship, ownership of real estate and participation in the stock market.  By increasing minority participation in these areas, we can begin to address the racial wealth gap.

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Video Summary

Athlete

This Is Why Athletes Go Broke

Money Maroon

Over the years, for professional athletes, we have seen astronomical contracts that have repeatedly broken records. We have also seen the sobering news that many athletes go broke. At times, we may fall into the trap and think, how can you go broke after earning hundreds of millions of dollars? But do not forget, a lot of our sports stars are young and have never had the life experiences that would have taught them how to manage money and plan for the future. 

Athletes Go Broke Due To Short Careers

For most athletes, once they sign the big contact, the financial mistakes are immediate. Some begin spending in anticipation of the contract or is out spending once signed. This happens in some cases because like us, many athletes are aware of the superstars who have decades long careers. Many rookies believe that they will continue to play their respective sports for years to come, earning an ever increasing salary. But this is not the case.

For the National Basketball Association (NBA), the average player lasts around 4.5 years. Like many other sports, making it to the NBA is hard, staying there is even harder. For the National Football League (NFL), the average career length is about 3.3 years. Let’s take a deeper look at the NFL. On average kickers and punters last 4.9 years, quarterbacks last about 4.4 years, cornerbacks last about 2.9 years, wide receivers last about 2.8 years and running backs last a dismal 2.5 years. Those in the National Hockey League (NHL) fare a bit better and last around 5 years. The average career of a Major League Baseball (MLB) player is about 5.6 years, and soccer players have careers of about 8 years.

It is therefore unsurprising that the average retirement age for MLB players is about 29.5, 28.2 for NHL players, 28 for NBA players, and 27.6 for NFL players.

If you have no transferable skills, lack financial discipline and your career lasts only a few years, you will have financial problems. No wonder athletes go broke.

Athletes Go Broke Due To Their Contracts:

Not all sports contracts are created equal. In some leagues, it is normal for the contracts to be guaranteed, but this is not the case for others. So when a player signs a contract for hundreds of millions of dollars, depending on the league, they may never receive the full amount.

Players’ contracts are guaranteed in Major League Soccer (MLS). For the most part, NBA, MLB and NHL contracts are also fully guaranteed. However, this is not the case for the NFL. For many NFL players, only a portion of their contract is guaranteed. This is very troubling as the NFL has one of the shortest career spans of the major sports. NFL players are faced with only a few years on average of playing in the league and also not having guaranteed contracts. Don’t forget, as a contact sport, NFL players also have a very high risk of injury.

Young And Dumb

If you received 100 million dollars upon your 18th birthday, in ten years, would you have more or less. The fact is, for many of us, at the age of 18-25, our sense of money is to get it and spend it. For many, this is the period of time where we spend a lot of time trying to impress the opposite sex. 

With money, comes the expensive cars, clothing and homes. At this age, as hormones rage, it may be a matter of time before kids. For many professional athletes, kids occur outside of wedlock which leads to child support and crazy exes. Think of your twenties but to the extreme. The fact is, not many of us could manage money in our twenties.

For athletes, it is a bit worst. Everyone you know, knows that you have money. Everyone around you potentially will have their hands out or will be reaching into your pockets. For so many athletes, it was family, agents, accountants or friends that stole from them. It is no wonder about 78% of professional athletes go broke after 3 years of retirement. Some professional athletes stand very little chance of building wealth in view of the people that are around them.

Most professional athletes just do not realize until it is too late – your career will be short, and your savings must last for the rest of your life.

What Can We Learn

What we can learn from athletes is that it is not about how much money you have, it is about how much you keep and grow. If you have no financial background or do not know how to mange your money, it is likely that you will lose it. No matter if it is 10 dollars or 10 million dollars.

As you move through your career, or your many careers, learn to manage and grow your money. You should learn who to trust and set boundaries with friends and family to ensure that your financial future is secure. Be the CEO of your life and your financial position. It is your money so take responsibility for what happens to it.

Conclusion

Over the years, for professional athletes, we have seen astronomical contracts that have repeatedly broken records. We have also seen the sobering news that many athletes go broke. At times, we may fall in the trap and think, how can you go broke after earning hundreds of millions of dollars? But do not forget, a lot of our sports stars are young and have never had the life experiences that would have taught them how to manage money and plan for the future. 

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Video Summary

Jealous friends and your wealth

Jealous Friends And Your Wealth

Money Maroon

While you are focus on your financial objectives, you may lose sight of one very important aspect, your friends. Based on the people around you, can you or will you be able to truly enjoy your wealth? Would your friends be happy and congratulatory of you achieving your financial objectives? Put simply, do you have jealous friends. 

Here, the assumption is that you are not purposely flaunting your wealth to belittle your friends. If you are doing this, then you are the bad friend, and your friends should be distancing themselves from you.

Money Changes Friendships

It is understandable that as time progresses the dynamics of our relationships change. Some friends will grow with you while others will grow away from you. But for those that you aspire to be apart of your life for the near and foreseeable future, how will they react to your wealth or you achieving financial independence? 

You will likely believe or have heard the refrain that true friends will not care. But the fact is, this is wishful thinking. Money changes the dynamics of all relationships. Just do a general search on the internet and you will see what I am talking about. As you transition in life, few of your old life will be with you in your new life.

While I know this, I do hope for you and me, that we are able to navigate achieving our goals and continue to have current friends around us that cheers us on. 

Cheap

If your aim is to achieve financial independence and you have tried to balance your expenses by trying to limit your spending, you will be called cheap. You will hear it multiple times from certain friends who may not completely understand what you are doing. You will be mocked for wearing the same pants or shirts that you have had for years. You will have to endure others around you having newer things, but if you are really about attaining your goal, you will not care. 

But a funny thing happens as you get closer to your goals. All the mocking and jeering will fade away to real questions. How close are you to retiring? What do you think about this financial move, what do you think about that? Your friends will have real interest in what you are doing. They will want to get to where you are, but there is an issue. You have been sacrificing and working on this path for years while they are seeing the end results and wanting that result.

This is where issues may develop.

Real Friends

As your dreams begin to come true, your real friends will continue to cheer you on. 

What I am saying here is that if you are low key, you will continue to be low key. If you believe in stealth wealth, you will likely continue to do the same things with slight changes. If you have achieved financial independence, well, you may change jobs or begin to pursue other things. It is unlikely that you will tell your friends your net worth. However, your real friends will know that you have enough based on your actions.

But your other friends may not see it that way. They will say that you have changed. If you decide to upgrade after being frugal comments will be made. You may also be accused of thinking that you are better than others. Overtime, some friendships will become strained.

Resentment may come from comparison, sometimes it may be linked to your friends own self-esteem and the way they view themselves. Especially if you and that friend started at the same financial point or you were from a lower economic position but have now surpassed them.

Real friends or jealous friends - friends jumping in the sun
Really friends or jealous friends

Why You May Have Jealous Friends

Some friends will be jealous friends because they do not want to see others, not even a friend, do better than they are doing. Some jealous friends are jealous because they love to cause chaos. Misery loves company. But if you have friends who have been with you for a long time and they become that jealous friend, it could be a matter of envy because you had the confidence to take the risks and make the sacrifices to achieve your goals.

How To Solve Or Preempt Jealous Friends

To prevent jealous friends, be aware and have the tough conversations. As you embark on your journey to financial independence and early retirement, note that not everyone is on the same journey. Be conscious of this. While you may be ostracized at first, note that the lifestyle that you will build for your family will likely be the envy of others. 

Once you have achieved your goals, you will likely have amply free time and the financial resources to do as you choose. You will be able to travel, do a job that you want, and spend time with family. You will be able to more so do the things that will make you and your family happy. Who doesn’t want that? This is all while your friends are toiling at a job that they hate and potentially have a life that they do not want. Be conscientious of this. Be understanding.

When friends ask about what you are doing, try to be patient and explain, do not judge their lifestyles. Do not fall into the “I told you so” mantra. 

Above all, live your life as they live there’s and if a friendship needs to end, it needs to end. Do not put yourself or your family in a terrible situation to maintain a hostile friendship.

Conclusion

While you are focus on your financial objectives, you may lose sight of one very important aspect, your friends. Based on the people around you, can you or will you be able to truly enjoy your wealth? Would your friends be happy and congratulatory of you achieving your financial objectives? Put simply, do you have jealous friends. 

Whatever the situation, do what is best for you and your family.

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Video Summary

Friends

Friends Influence Your Success And Wealth

Money Maroon

Show me your five closest friends and I can provide a very accurate description of you. The fact of the matter is that the friends we have not only tells us who we are generally. Our friends influence who we are and who we will become. Yes, those closest to you will impact who you will become. Peer pressure  in proximity is strong, so is the influence of mentors and leaders. Choose your friends wisely because they will influence not only your career success but also the wealth you will attain in the future.

Friends

We may deny it, but those around us have the power to influence us. We are constantly picking up on cues from those around us. These cues subconsciously inform and shape our behavior. These behaviors over time become habits, and our habits determine who we become. The influences of our friends are not only behavioral. Who we have around us affect our world view, the way we think and the way we feel about ourselves. As such, our success and in a sense our wealth in life will come down to the people we choose to spend our time with.

Think for a second about the company kept by your financial heroes. Now, contrast this with the financially illiterate and those living on the edge. The friends kept by these two groups are diametrically oppose.

At this moment, consider who are your closest friends. Think of their attributes and how these friends have affected your life. What habits do these friends have that you want? Also identify attributes that you do not wish to adapt? Mostly, do you need new friends? 

Success

To be successful, be around successful people. If you want to be in shape, hang out with those who are healthy. If you want to be happy, surround yourself with happy people. We become those who are around us.

If you want to build wealth and become financially independent, do not have a circle of people around you who are struggling and lack financial discipline. Instead, associate yourself with positive, focused people. Be friends with those who are committed to constant improvement and the pursuit of the best in life. Have friends who will facilitate your journey to wealth and financial independence.

Choose Your Friends Wisely

Remember, while you may not be able to choose your family, you do choose your friends. To be friends with another person, you must agree to have this individual in your life. And while the decision to cut people out of your life may be difficult, tough decisions must be made for you to achieve your goals. 

Be the CEO of your life and demote or fire your friends as needed to achieve your goals. If not, do not be surprise when your ambitions, goals and position in life are at the same level as those around you.

Choose your friends wisely

Conclusion

Show me your five closest friends and I can provide a very accurate description of you. The fact of the matter is that the friends we have not only tells us who we are generally. Our friends influence who we are and who we will become. Yes, those closest to you will impact who you will become. Peer pressure  in proximity is strong, so is the influence of mentors and leaders. Choose your friends wisely because they will influence not only your career success but also the wealth you will attain in the future.

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Retirement plan

Do not Become Someone Else’s Retirement Plan

Money Maroon

No matter how hard you work or how much money you earn, you are only a few bad choices from finding yourself in the poor house. Sometimes, the decisions that we make are in view of perceived obligations. For example, many financial decisions are made in view of obligations to family and friends. On your path to financial independence and early retirement, do not become someone’s retirement plan.

Focus On Your Retirement Plan

As the statement goes, put on our oxygen masks first before the person next to  you, including family. This also applies to your plans for retirement. You may be able to make head way in saving toward your retirement by living below your means, saving, and investing. However, it is also easy for a family member or two to constantly ask, manipulate or steal what you have saved. The stories are easily available if you perform a simply search, and should serve as a warning.

What Is Yours Is Theirs

There are so many stories of an individual or a nuclear family making progress by living below their means, saving and investing over time. As this family rises and increases their wealth, it is only natural for families and friends to notice, and notice they will. We can try all we want to hide success, but others will notice how you live your life. While you may try to be the millionaire next door, your close family knows better. While you may drive the standard car and live in a standard house, your family will be well aware of your job and will likely have researched your salary. It is only a matter of time before assumptions are made with regard to your wealth. With assumptions, it is common for others to begin to think that what is yours is also theirs.

As knowledge of your life is shared by family and close friends, you will be seen in a different light. When financial hiccups occurs, you become their bank. If they are having issues with housing, they will show up at your door. If you do not take steps to stop the initial requests or actions, you will pay for it later.

Of course, the proximity to family and friends will matter. The closer you are to those with a specific personality type, the faster the devolution into others thinking that what is yours is theirs. The further away you are, the less interaction and the less issues you may have.

Blocking retirement plan
Do not allow others to block your financial flow

Reason Does Not Matter

It really does not matter if you and others all had the same opportunities. It does not really matter if you choose to live below your means while others live it up. You may sacrifice all you want to maintain your life and that of your family, but it is simply human nature for those around you to think and believe that what is yours is also theirs. Especially when others believe that you have more than you need or that you do not deserve what you have.

What To Do

The fact is, you must learn to say no. You cannot become someone else’s retirement plan. You must stand up for yourself and your family. Others may claim that you are mean, but you must put your oxygen mask on before others. You cannot find yourself bank rolling other peoples lives, especially if these individuals do not understand how hard you have worked for what you have. 

It is all around us. Others have nice cars, vacations and homes that dwarfs the size and costs of yours. However, these are the first to reach out for aid and have a deep seated belief that what is yours is theirs. When times are hard, why do you have so much and they have so little, even though when times were good they had more than you and in effect wasted it.

We are not saying that you should be selfish and not help others. Help others and give. Success is not achieved alone and in isolation. What we are saying is, know what you are doing. Know the consequences of your actions. Know what saying yes today will mean for tomorrow. Do not become another person’s retirement plan. Know when to say no.

Conclusion

No matter how hard you work or how much money you earn, you are only a few bad choices from finding yourself in the poor house. Sometimes, the decisions that we make are in view of perceived obligations. For example, many financial decisions are made in view of obligations to family and friends. On your path to financial independence and early retirement, do not become someone’s retirement plan.

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Just say no

Now, Just Say No

Money Maroon

When was the last time that you suck it up and just say no to your children? As we move toward the next year, again we enter the season of spending. One of the major driving force behind the excessive spending during this time of the year is the effort to please our children. However, spending money that you do not have not only hurts you, it also hurts your children. By saying no and living within your needs, you will be teaching your children delayed gratification, self control and impact their future for the better.

Saying One Thing And Doing Another

It is always amazing how the same folks who announce that they do not have the funds typically have the latest and greatest. It is amazing how the co-worker who is struggling financially has the required funds to take a vacation. It is also interesting how not only do they have the latest toys and gadgets, but so do their children. Where are they getting it from? 

Let us not speculate. However, it does offer an interesting view into other people’s habits. This is not new, the act of saying one thing, yet doing another. With this in mind, why are we surprise when our children act in a similar manner?

Just Say No To Your Children

It is always difficult to tell our children no. It is difficult for us to punish them. However, at a certain point we must perform our roles as parents for their growth and development. Just as you work with your children with their school work, teaching them how to play a sport or how to be a contributing part of society, so must we say no when it is required.  Financial literacy should be apart of their development.

In the holiday season, just say no. Whenever you are asked to spend what you do not have, just say no. We understand that this is easy to say but difficult to do. This is especially the case when your children have friends who are receiving the new and latest toys. In some cases we satisfy our children’s wants to prevent a tantrum or a melt down. For many parents, it is also a matter of ensuring that their children fit in socially. However, if we are teaching our children to have what others have no matter the cost, financially and otherwise, are we really doing them a service?

If our children’s friends have the newest and most expensive phones or other electronic devices, should your children also have those items? If you cannot afford it, you must have a conversation with your children. It may be the most opportune time to discuss money and how money works.

saying no
saying no

Think Long Term

If we are purchasing material items that we cannot afford, we are not only putting our financial future in jeopardy. Our acts are also putting our children’s financial future in jeopardy as well. We are essentially teaching our children that they can purchase things that they cannot afford.  Do not be surprise by our children’s decision to put things on credit and overspend in the future. Note that our children are watching. Our children model their behaviors after what they see and hear. Believe it our not, we can have a huge influence on their future spending habits. Consider the current state of finance today, it is no wonder we have so many finically illiterate folks. 

Let us make our children’s financial literacy apart of what we are teaching. Let us act as parents. Like with school and so many other tasks, we are the parent and not your children’s friend. Let us aim to try and find a way to teach them such that they can in the future be better than we are. Let us give them the tools to make better decisions.

Conclusion

When was the last time that you suck it up and just say no to your children? As we move toward another year, again we enter the season of spending. One of the major driving force behind the excessive spending during this time of the year is the effort to please our children. However, spending money that you do not have not only hurts you, it also hurts your children. By saying no and living within your needs, you will be teaching your children delayed gratification, self control and impact their future for the better.

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Empty piggy bank

If You Are Feeling Broke, It’s Ok

Money Maroon

If you are feeling broke, know that it is ok. The feeling of not doing enough or that you are behind as compared to others is a normal. As human beings, we are hard wired to compare ourselves to others. It is natural. It is also natural to feel like you are not where others are when you look at their material possessions. But keep in mind, you are typically only seeing what others are willing to show you. You are not seeing what is going on behind the scenes. Many engage in fake it till you make it and  project a wealthy facade, but are in tough financial straits. Focus on you and do not concern yourself with what others are doing.

Empty wallet
It’s ok to feel broke…. but are you?

The Story

You have likely heard a similar story, but here we go. Around the corner is a neighbor who has one of the most beautiful homes, with an up-kept yard and with hedges always cut. This neighbor has two kids, a dog and two luxury cars which are replaced every few years. The neighbors are very social in the neighborhood, for gatherings, they are the life of the party. These folks take vacations each year to exotic locations, essentially these neighbors are the envy of the neighborhood. They are the picture of the American dream. They exude confidence, money, success and privilege.

Eventually, you may begin to notice some cracks in the happiness of your neighbor and this goes one of two ways. (1) They may stop attending certain events and may downsize the cars and eventually note that they are moving because of work. (2) If they chose to keep up appearances, eventually you or another neighbor may begin to get inquiries about who lives at their home. Typically, these are the early signs of someone hunting for your neighbors assets. It may be their cars or a boat in the back yard. Eventually, one or both cars will be towed away and repossessed. Sooner or later, a sign will be placed on the home that it is in foreclosure. 

It is amazing how often this story plays out.  Keep this story in mind when you begin to think or feel broke or inadequate as compared to others.

You May Not Be As Broke As You Think

The events above is typically shocking to all and will be the subject of much gossip. Some may enjoy seeing this fall from grace but many will be left reflecting on their previously perceived short comings. The fact is simple, you only see what others want you to see. If your neighbor has luxury cars you have no idea if they are leased or owned. You have no idea if they had previously won the lottery, you also have no idea if they have inherently wealth or are up to their eye balls in debt. The moral of the story, do not compare yourself to others.

Live your own life and stay in your lane. Be happy for those who are doing well or appear that they are doing well. Know what you are doing and focus on your financial goals and not what others are doing. It is ok to feel broke, it is normal to compare yourself to others. But do not act in a manner to compete with others. Live your life. Stay in your lane.

Do You

If you are pursing early retirement, do so. While it is difficult not to compare yourself to others, keep focus on your goals. If your aim is to save 50% or more of your income, understand that you may then not have the nicest cars, fashion or take the same vacations as someone who do not save as much as you do. Just remember that we are all on different paths. You may feel broke or inadequate, but your bank account may say otherwise.

Whenever you feel financially inadequate, take a look at your assets. Look at your bank account and know that you are one day closer to your financial goals.

Conclusion

If you are feeling broke, know that it is ok. The feeling of not doing enough or that you are behind as compared to others is a normal. As human beings, we are hard wired to compare ourselves to others. It is natural. It is also natural to feel like you are not where others are when you look at their material possessions. But keep in mind, you are typically only seeing what others are willing to show you. You are not seeing what is going on behind the scenes. Many engage in fake it till you make it and  project a wealthy facade, but are in tough financial straits. Focus on you and do not concern yourself with what others are doing.

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Wealth takes time

Wealth, It Just Takes Time

Money Maroon

We all would like to be rich and wealthy today, now, at this second, but this is not typically how it works. There is a reason why the average retirement age is in the 60s. Building wealth is one of those things, it just takes time. Building wealth does not typically occur overnight. It takes small steps over time, typically a long period of time. I will be blunt here, it typically takes decades.

It Just Takes Time – No Short Cuts

Wealth takes time. This is the truth. There is really no get rich quick schemes. Some get lucky by taking elevated risks, and the rest build wealth over time. Of course, the more risk, the higher the rewards. But with more risks come bankruptcy and depending on the activity, jail. It is a fact, and you may not want to hear this but generally, it just takes time to build wealth. Short cuts may only get you short term gratification, but not a sustainable award that will last in the long run. This has been shown over and over again.

Wealth Calculator

The time it will take to build sustainable wealth can be generalize using a wealth calculator. Select your favorite wealth calculator and see for yourself. Even with a 10  to 15 percent year over year increase in the stock market, which is highly unlikely for a long period of time, if you are starting with nothing and contribute a small portion monthly, it will take you multiple decades to achieve 1 million dollars. This is the simple reality. It is hard to hear, but it is the truth.

We Fail Because It Just Takes Time

The length of time that it takes to build wealth is the reason we all do not achieve our dream. This is the reason so few of us actually achieve the goal of financial independence and true wealth. It just takes time. Many of us are simply not patient enough to diligently save, invest, and live below our means consistently for an extended period of time. If we were able to do this, the rewards at the finish line are truly worth it. Your financial freedom is worth it.

Mortgage As An Example

Another example of our financial reality is a mortgage. Most typical mortgages are 15 or 30 year mortgages. Why is this? The reason is a simple one. To accumulate and pay off the large sums that is typically a mortgage, for example for a home mortgage, takes time. Unless you are coming in with money, it is highly unlikely that you will pay off your mortgage in 5 years. Think about it, in today’s world, it will typically take the average American  5-7 years to pay off a car loan, which costs significantly less than a home.

Do Not Keep Up With The Jones

It is normal to look at what others are doing. It is also ok to wonder if you are being too conservative with your finances, especially when others are purchasing bigger homes or nicer cars. But you do not know how leveraged or over leveraged these individuals are. Further, your situation is different from others. It is important to stay in your lane and maximize your situation. Work on you. 

Know that there are no short cuts. To achieve financial independence, it just takes time. Save, invest, and live below your means.

Amazon prime day
Think before you spend

Conclusion

We all would like to be rich and wealthy today, now, at this second, but this is not typically how it works. There is a reason why the average retirement age is in the 60s. Building wealth is one of those things, it just takes time. Building wealth does not typically occur overnight. It takes small steps over time, typically a long period of time. I will be blunt here, it typically takes decades.

Follow me on Twitter @JoToFI_com

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Buy The Dip

Buy The Dip And Hold

Money Maroon

Here, we are not giving financial advice, but this blog provides a great platform to share ideas and discuss experiences. One of the many back and forth that are debated is whether or not to invoke the buy the dip strategy versus the typical dollar cost averaging. But there is an in-between that we should not overlook. If you have a dollar cost averaging strategy, consider integrating a buy the dip and hold strategy.

Dollar Cost Averaging

To quickly summarize, dollar cost averaging is an investment strategy where the investor invests the same amount  across a set period of time. For example, investing the same amount each month regardless of whether or not the price of the stock increases or decreases. This can reduce the impact of volatility on the overall purchase. 

With dollar cost averaging, you are not buying an asset when it is on one end of the spectrum, high or low. Here, the attempt is to control volatility as it averages out over the period of your purchase. Dollar cost averaging works very well, as the market is expected to go up over the long run. Further, dollar cost averaging echos the mantra of “it is not timing the market, it is time in the market.” But what about buying the dip?

Buy The Dip

Unlike dollar cost averaging, buy the dip is the purchasing of an asset only after it has dropped in price.  Here, the general belief is that the new low price is a bargain. Therefore, profits will be gained as the asset price increases over time. This strategy is the classic buy low and sell high. 

If you are employing buy the dip, your threshold for the dip is important. If your threshold is a 5% drop in prices, you may potentially miss a 4% drop in price followed by a 10% increase.  A second issue with buy the dip is that you are essentially trying to time the market. Not many are successful at this. In fact, overtime, you are proven to fail. It is really difficult to know when a market has hit the bottom of its fall.

While there are drawbacks with buy the dip, if you do your research and are lucky, buy the dip can be very lucrative. This is especially true in a bull market or a fast recovery following a significant drop in the market. In view of the pandemic drop in 2020 and the recent bull run, no wonder this strategy is so popular.

Buy The Dip And Hold

There is another option besides dollar cost averaging and buying the dip. You may buy the dip and hold. If you have a dollar cost averaging strategy, it may be wise to integrate a mini buy the dip strategy. Meaning, if you invest $500 each month on the 1st of the month, consider having a date range from the 1st to the 5th to invest. In that 5 day period, invest when the market is down. If this strategy is repeated over time, the incremental gains that you may obtain could add up to be of substantial benefit. A half of a percent gain here, a third of a percent gain there for twenty to thirty years. This could be the difference between living on a budget and financial independence.

Money on trees
Money over time

Conclusion

Here, we are not giving financial advice, but this blog provides a great platform to share ideas and discuss experiences. One of the many back and forth that are debated is whether or not to invoke the buy the dip strategy versus the typical dollar cost averaging. But there is an in-between that we should not overlook. If you have a dollar cost averaging strategy, consider integrating a buy the dip and hold strategy.

Follow me on Twitter @JoToFI_com

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