The Best Job

The Best Job To Have

Money Maroon

There is a saying that the best job to have is one that you do not need. I did not believe this at first. For the most part, I viewed this saying as just a cliche. Similar to if you love what you do you will never work another day. But guess what, it is true. The truth is, if you do not need a job, it forces you to do something that you love. Therefore, once you do not need a job, what ever you do will be something that you love. To find and do the best job, you must have a job that you do not need.

Your Early Career

It is highly unlikely that you will love your job early in your career. The fact is, for many of us, the first job serves a very specific purpose. First, to pay the bills and second, to gain experience. For the most part, you do not want to stay in the same passion for 5, 10 or 15 years. To learn and gain experience, a lot of what you  will be doing is grunt work. For your first few jobs, it is likely that you will be doing the tedious and repetitive tasks that those above you do not want to do.

As you gain experience, you begin to do more of the fun things. This could generically be strategy, interacting with clients, or running deals. But with more experience comes more money and responsibilities.

You Can Have Your Best Job In 10 Years Or Less

If you play your cards right, it will take maybe 10 years to get to your best job. If you work hard, save, live below your means and diligently invest, there is a high likelihood that in 10 to 15 years you can be financially free or at least be a good way there. 

Financial freedom brings the best. While it is great to be fully financially independent,  you do not need to entirely have financial independence to get the best job of your life. Imagine the following scenario. You have expenditures of about $50K per year. Over the first 10-15 years of your working life you happen to amass let’s say $500,000. Based on the 4% rule, if you are able to live on $20K per year, you are financially independent. 

Not many folks can live on $20K. But if you have $50K expenditure per year, and have cover for $20K because of the $500K you have, you really need only a $30K per year salary to make your expenditures. Which then means that if you do not like your job, you can get another one that you truly love so long as it brings home at least $30K per year. This is the benefit of having financial independence.

This calculation works at all levels. The more you save and invest, the less you rely on the job you have. Therefore, you can actually do a job that you truly like and be the absolute best at it. Further, with financial independence you have no need to put up with BS from superiors or colleagues. You are able to true do what you love.

Financial Independence

Generally, financial independence is when you enough money to live the life you want without income from a job. If you do not need to rely on a job and you are working, you will only continue to do that job if you actually love it. This is why one of the side effects of financial independence is that then you are able to have the best job.

Think about it. If you did not need the money from your job, would you continue to do it. If the answer is yes, the reason is typically that you actually love your job. You love the people you are working with and the work that you are doing. Here, it is not about the money.

On the other hand, if your answer is no, once you have financial independence or your are close to it, why continue to do work you hate. Quit and find something that you love to do. Life is short, you owe it to your self to spend the limited lime you have on this rock doing something that impacts the world and that you love to do.

Conclusion

There is a saying that the best job to have is one that you do not need. I did not believe this at first. For the most part, I viewed this saying as just a cliche. Similar to if you love what you do you will never work another day. But guess what, it is true. The truth is, if you do not need a job, it forces you to do something that you love. Therefore, once you do not need a job, what ever you do will be something that you love. To find and do the best job, you must have a job that you do not need. Financial independence allows you to do what you love.

Follow me on Twitter @JoToFI_com

Follow me on Instagram @JoToFI_com

US Debt credit card

US Debt Is Rapidly Growing

Money Maroon

As the US debt level continues to rise, it is an interesting sight to see it happen first hand. If you are a manager, you will see this everyday. Specifically from new hires. This is the easiest way to find out what is going on with US Debt. The attitude of new junior hires tell it all. You can watch the attitudes of those with children and family, and those without. For the most part, there is no difference. It is very obvious that the masses have been programmed to spend. Rarely do junior hires save and invest first.

The Drive To Spend

From new junior hires, it is simply amazing to hear their thoughts on money. When many obtain  a job that pays more than they have made before, the first thought is how to spend their money. Not how to save. It is shocking. Even when there is a constant drumbeat of a recession in the near feature, the vast majority of new junior hires have a spending mindset. As such, as soon as the money comes in, it is let go on frivolous things. 

It is actually amazing. For some of these new hirers, I am somewhat jealous of the naivety. For example, how free they are with money. No thought of what could happen if they lose their jobs. They are taking vacations, buying new cars, buying new homes and attending far away music festivals. You only live once they say.

US Debt Is Growing And It Is Scary

The scary part of this is because of the high wages that these new junior hires are making, the thought is that they can pay off debt whenever. As such, they accumulate debt with the thought that in the next few months it can be paid off. This is a problem. Without adequate funds in an emergency fund, the lost of a job or any hick ups or simply life can cause issues. With high salaries, in a high costs of living area, and financial illiteracy, debt can accumulate very fast.

This all goes to show how US debt continues to grow. There is such a mass of financially illiterate folks that no matter the salary, no matter how high the income, many in the US are simply trained or programed to spend and to continue to do so until they have nothing left.

Those With Families

The interesting thing is that even as we move toward a possible recession, it really does not matter if folks have families or not.  The spending continues on. Whether it is a weekend trip to Europe or traveling to another State for a music festival. It is simply amazing. Those individuals with families are spending more than those without. For most, you would actually expect the opposite. But coming out of the pandemic, this is where we are. There is a pent up demand to travel and it does not matter if a recession is around the corner. Caution is being thrown to the wind and folks are spending and the debt load is rising. 

US debt is not the only debt rising. Debt is raising in other countries as well. As the labor market tightens, as layoffs increase, there will be fiscal pain. Are you planing ahead or are you apart of this group that is driving US debt to new heights?

Conclusion

As the US debt level continues to rise, it is an interesting sight to see it happen first hand. If you are a manager, you will see this everyday. Specifically from new hires. This is the easiest way to find out what is going on with US Debt. The attitude of new junior hires tell it all. You can watch the attitudes of those with children and family, and those without. For the most part there is no difference. It is very obvious that the masses have been programmed to spend. Rarely do junior hires save and invest first. Or for that matter, save at all. For financial independence, start saving and investing early.

Follow me on Twitter @JoToFI_com

Follow me on Instagram @JoToFI_com

quiet quitting, quiet hiring quiet firing, person with finger to the mouth

Quiet Quitting, Quiet Firing & Now Quiet Hiring, Please Stop!

Money Maroon

It is amazing how fast someone discovers something that is new to that person, push it as being new to all, coin a new name and then it is pushed by the media. Think about quiet quitting. It is not new. We have all known folks who simply do not give 100% on the job. Once employees realize that they are not being compensated appropriately, this is what employees do. Quiet firing, is old, not new. Employers have always done this. Now we are hearing about quiet hiring. Quiet hiring is not new. Employers have always done this. I am now waiting for quiet studying, quiet retiring, and quiet dating, oh I guest that is already called ghosting. The point is, do not get caught up in the phraseology, focus on your goals.

Quiet Quitting

The term quiet quitting has come to generally refer to when an employee withdraws from their organization. Quiet quitting manifests itself as an unengaged employee and may be a result of having poor work-life balance.  Meaning an overworked and underpaid employee. One of the biggest causes of quiet quitting is an employee believing that they are not compensated appropriately or that their efforts do not matter. Generally, quiet quitters do not actually leave the organization, instead, they show up but do not give their best effort.

While quiet quitting has entered the lexicon of many in recent years, it is not new. We all know individuals who have always done this. Once they realize that they are not being compensated appropriately, they disengage. They work up to what they are compensated, or up to the point where they will not be fired and stop. I can bet you know of co workers who are like this. If the job description is a 9-5, by 5 they are out the door. If the job description calls for specific activities, anything additional, these employees push back. They will not go above and beyond.

The funny thing is that many quiet quitters know that they will not be promoted for their activities or lack thereof. But that is the point. If they are not promoted, they are ok because they did not go above and beyond. If they are promoted, they know how little they will have to do and no more. Again, nothing new, employees having been doing this for decades

Quiet Firing

Quit firing is essentially when managers fail to engage an employee and slowly push them out of the organization. At times, this is intentional, other times it is a result of a manager’s neglect. When it is intentional, managers will not provide coaching, support or guidance to an employee. This then results in the employee performing at a low level. If the employee is paying attention, they will quietly leave the organization as they know that they may be fired. On the other hand, if the employee is not paying attention, for each low performance, the manager will build a case and inform the employee of this low performance. The aim here is to have the employee finally get the point and leave voluntarily or be fired. 

Again, this is not new. Managers have always been inept. Managers have always trim numbers by building a case against an employee. Quiet firing is nothing new.

Quiet Hiring

The latest in the list of new jargons is quiet hiring. Quiet hiring is when an employer acquires new skills without actually hiring new full-time employees. This is essential an employer hiring contractors and not full staff or moving current employees to new roles while not changing title. When quiet hiring is utilize, the full time employee number does not change. if executed perfectly, your current employee will take on a new role and not be paid anything additional. This is how organizations get an employee to take on dual roles while not being adequately compensated. At times, this is done with the promise of a promotion.

Again, nothing new to see here. Employers have been doing this for centuries. Anything to not pay employees the wage that they deserve.

Conclusion

It is amazing how fast someone discovers something that is new to that person, push it as being new to all, coin a new name and then it is pushed by the media. Think about quiet quitting. It is not new. We have all known folks who simply do not give 100% on the job. Once employees realize that they are not being compensated appropriately, this is what employees do. Quiet firing, is old, not new. Employers have always done this. Now we are hearing about quiet hiring. Quiet hiring is not new. Employers have always done this. 

To ensure that you can live the life that you want to live, journey to financial independence. With financial independence, it does not matter if your employer quiet hires or quiet fires. You can live the life that you want and put in the effort that you choose.

Follow me on Twitter @JoToFI_com

Follow me on Instagram @JoToFI_com

Have you seen CD rates lately

Have You Seen CD Rates Lately?

Money Maroon

Have you seen certificate of deposit (CD) rates lately? I will give you a hint, they are high and expected to get a bit higher in 2023 in view of predicted rate increases by the federal reserve. As of the start of the new year, you can get 12 month to 24 month CDs in the 4-5 percent range. If you look hard enough, I am confident that you can find rates in the 5-6 percent range as well. This is in stark contrast to only a year earlier, when rates hovered around 1 percent. On your financial journey, it is important to assess whether or not CDs should be apart of your holdings.

The Stock Market

In 2022, the stock market did not do so well. All the indexes were in the toilet. The Nasdaq was down 31.1 percent. S&P 500 was down 19.4 percent. The Dow Jones was down the least but was down 8.8 percent. The massacre is expected to continue into 2023. This will provide an epic buying opportunity in 2023-2024, but we will discuss this buying opportunity in another post. While the stock market was going down in 2022, do you know what was not down? Savings and CD rates. Both started 2022 ridiculously low. However, as the federal reserve began to fight inflation by increasing interest rates, both savings and CD rates became more favorable.

CDs

A CD is essentially a savings product that earns interest on a lump sum for a period of time. The time period ranges from three months to about five years. Unlike a savings account, with a CD, the money must remain untouched for the entirety of the term or risk penalty fees or lost interest. Because of this lost of liquidity, CDs usually have higher interest rates as compared to savings accounts.  As compared to stocks and bonds, CDs are safer and more conservative and offers lower opportunity for growth. However, unlike stocks and bonds, CDs, if allowed to run the term, have a  guaranteed rate of return.

CD Rates In 2023

At the start of 2023, CDs are paying 4-5 percent for eighteen month to twenty-four month term. For example, Marcus’ 12 month CD pays 4.3 percent and the 18 month CD pays 4.4 percent. Ally CD rates are 4.25 percent for 18 month, 3 years and the 5 year term. Synchrony on the other hand is offering a 4.6 percent rate for their 14 month term CDs.

Diversify

In life, it is usually best to diversify. By now, you are likely aware that it is likely best to diversify your income streams. You also may know that it is probably best to diversify your investment portfolio. While saving accounts are not necessarily the growth vehicle of the stock market, you should consider diversifying your money beyond investing in the stock market and having a savings account. In view of the current CD rates, investigate if CDs would be beneficial to your bottomline. If a CD is, open one. As the market tanks, instead of losing money, CDs may provide a reprieve. Instead of losing 20 percent in the stock market, gain 4-5 percent in a CD.

Conclusion

CD rates are high and expected to get a bit higher in 2023. These increases are in view of predicted rate increases by the federal reserve. As of the start of the new year, you can get 12 month to 24 month CDs in the 4-5 percent range. If you look hard enough, I am confident that you can find rates in the 5-6 percent range as well. This is in stark contrast to only a year earlier, when rates hovered around 1 percent. On your financial journey, it is important to assess whether or not CDs should be apart of your holdings.

Follow me on Twitter @JoToFI_com

Follow me on Instagram @JoToFI_com

Be Work optional

Be Work Optional And Have The Best Job

Money Maroon

The best job to have is one that you do not need. The reasons are easily apparent if you think about it.  The less reliant you are on your job, the more comfortable you can be in the workplace. When your job is optional, your boss and those above you cannot take advantage of you. If they try, you can simply quit. Essentially, with work optional, you can make ongoing decisions that are in your best interest. If you are an employee, it is important to remember, no matter how much they love you, you are replaceable.

If you do not believe me, consider the rapid layoffs that have occurred in 2022. Think of those twitter employees in 2022. From top to bottom, you are replaceable. Your employment is at the whim of someone else. If your livelihood does not depend on your job, you are free.  Aim to be work optional.

Being An Employee

In the United States, for many, employment is at will. Which means for any reason, the company can fire you. It is that easy. If someone does not like you, you can be replaced. Many companies, to avoid a law suit for discrimination or retaliation, will build a case for removing employees before actually firing them.

When building a case, companies and their agents, yes your manager, will become more vocal against you. All your missteps will be documented. If you are late for a meeting, no matter the reason, it will be noted. Someone does not like your tone, it will be documented. If you disagree with others, the company will view you as not being a team player. You will begin to hear criticisms. The aim here is to let you know that you are not doing a good job such that when you are let go you do not think to sue.

But some companies build cases in a more blatant way. You may have received great reviews previously, and all of a sudden a bad review. That should be a warning signal to prepare yourself. Sometimes, you may have absolutely no contact with your manger or supervisor and they drop a bad review on you. In some of these cases, the managers will actually blame employees for the lack of contact. 

The Elon Musk Situation

You may encounter an Elon Musk situation. You may be in the unfortunate situation where another company buys your employer. Your role may be redundant. In these cases, all your good will and hard work goes out the door. The new owner will view you as a cost center. The point is, if your company wants to get rid of you, they will. 

Protecting Yourself

As life is unpredictable, plan ahead and protect yourself. At least from the financial stand point, the best way to do this is by becoming  work optional. This way, no matter what your boss or your bosses boss decides, you will be ok. 

If you lose your job today, how would your life change? If you have a family, this is a question that you should be thinking about often. Do you have enough in an emergency fund? How far are you away from financial independence? Instead of rushing back into a job that you may not like, can you take your time and find something that you like to do? Another question is, was your job optional.

Work Optional

Work optional is another way of noting that you are financially independent. By being financially independent, you can work if you choose to, or not. You are work optional. If you have a job, the job is optional. If you happen to be fired, you can pick up your things and graciously exit your job and sit at home if you need to. Strive to be work optional.

Conclusion

The best job to have is one that you do not need. The reasons are easily apparent if you think about it.  The less reliant you are on your job, the more comfortable you can be in the workplace. When your job is optional, your boss and those above you cannot take advantage of you. If they try, you can simply quit. Essentially, with work optional, you can make ongoing decisions that are in your best interest. If you are an employee, it is important to remember, no matter how much they love you, you are replaceable.

If you do not believe me, consider the rapid layoffs that have occurred in 2022. Think of those twitter employees in 2022. From top to bottom, you are replaceable. Your employment is at the whim of someone else. If your livelihood does not depend on your job, you are free.  Aim to be work optional.

Follow me on Twitter @JoToFI_com

Follow me on Instagram @JoToFI_com

FI driver salary

Wow!! 2022 F1 Driver Salary

Money Maroon

Like many in the United States, I have become a major fan of Formula One (F1) over the last few years. I am not new to F1 racing. I am new as a major fan of F1 racing. Sometimes I paid attention to F1 in the Michael Schumacher glory days, but it was very much predictable. Michael was going to win. The early years of Lewis Hamilton’s domination was also predictable. But over the years, while the action on the track remains predictable, the story lines in view of access to drivers have made the sport that much more interesting. But as this is a financial article, let us take a look at F1 Driver Salary in 2022.

The Drama

Depending on the side that you are on, there is a protagonist and an antagonist in F1. When I say sides, I mean team. Is it Ferrari, Mercedes, Red Bull, Haas, Aston Martin, Alfa Romeo, McLaren or Alpha Tauri? Is it turmoil within the team regarding strategy, looking at you Ferrari. Did you totally miss the new regulations, looking at you Mercedes. Did you have internal team conflict regarding team orders, looking at you Red Bull. There is also the matter of the back markers and who will have a seat next year. It is interesting how so much of the drama of F1 is off the track. But let us refocus on F1 Driver Salary in 2022.

2022 F1 Driver Salary

As the top motor sport in the world, you can expect the top drivers to earn a lot. Way more than us mere mortals who are concerned about saving and investing to financial independence. If manage appropriately, these drivers will no doubt have a financially secure future. Below is the list of the salaries for the 20 F1 drivers in 2022.

  • Lewis Hamilton (Mercedes, #44) – $40 million
  • Max Verstappen (Red Bull Racing, #1) – $25 million
  • Fernando Alonso (Alpine, #14) – $20 million
  • Lando Norris (McLaren, #4) – $20 million
  • Sebastian Vettel (Aston Martin, #5) – $15 million
  • Daniel Ricciardo (McLaren, #3) – $15 million
  • Charles Leclerc (Ferrari, #16) – $12 million
  • Valtteri Bottas (Alfa Romeo, #77) – $10 million
  • Lance Stroll (Aston Martin, #18) – $10 million
  • Carlos Sainz Jr. (Ferrari, #55) – $10 million
  • Sergio Pérez, (Red Bull Racing, #11) – $8 million
  • Kevin Magnussen, (Haas, #20) – $6 million
  • Pierre Gasly, (AlphaTauri, #10) – $5 million
  • Esteban Ocon, (Alpine, #31) – $5 million
  • George Russell, Mercedes, #63) – $5 million
  • Alexander Albon, (Williams, #23) – $2 million
  • Nicholas Latifi, (Williams, #6) – $1 million
  • Zhou Guanyu, (Alfa Romeo, #24) – $1 million
  • Mick Schumacher, (Haas, #47) – $1 million
  • Yuki Tsunoda, (AlphaTauri, #22) – $750,000

As expected, the elite drivers are paid a tremendous amount of money. However, even the back markers are making a very good living. All drivers having the opportunity to make more from sponsorships and other business ventures.

Conclusion

While you may not be making as much as a F1 driver, you can still achieve financial independence. Whatever you are doing, earn, live below your means, save, and invest. You do not need anything close to a F1 driver salary. Continue your journey to financial independence by taking your next best financial step forward. 

Follow me on Twitter @JoToFI_com

Follow me on Instagram @JoToFI_com

IRA contribution limit 2023

IRA Contribution Limit In 2023 Has Increased

Money Maroon

In 2023, the IRA contribution limit will increase to $6,500. This limit is up from $6,000 in 2022. On the other hand, there will be no change to the catch-up contribution limit. The IRA catch‑up contribution limit for individuals aged 50 and over will remain $1,000. If you are in the position to contribute to your IRA, take advantage and boost your retirement savings.

IRA Contribution Limits For deductions

The IRS has announced that the IRA contribution limit will increase to $6,500 in 2023. The income ranges for determining eligibility to make deductible contributions to traditional and roth IRAs will also increase in 2023. Generally, taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. 

If covered by a retirement plan at work, the deduction may be reduced or phased out depending on filing status and income. If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs do not apply.

Phase‑out Ranges For 2023

Single taxpayers covered by a workplace retirement plan will have the phase out increase in 2023. The phase-out range in 2023 will be between $73,000 and $83,000, up from between $68,000 and $78,000.

Married couples filing jointly will also have an increase. If the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $116,000 and $136,000, up from between $109,000 and $129,000.

For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $218,000 and $228,000, up from between $204,000 and $214,000.

For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

The income phase-out range for taxpayers making contributions to a Roth IRA is increased to between $138,000 and $153,000 for singles and heads of household, up from between $129,000 and $144,000.

For married couples filing jointly, the income phase-out range is increased to between $218,000 and $228,000, up from between $204,000 and $214,000.

The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $73,000 for married couples filing jointly, up from $68,000; $54,750 for heads of household, up from $51,000; and $36,500 for singles and married individuals filing separately, up from $34,000.

The amount individuals can contribute to their SIMPLE retirement accounts is increased to $15,500, up from $14,000.

Take Advantage

If you are able to increase your IRA contributions, do so. IRAs are one of the most effective ways to save and invest for the future. IRAs allows your money to grow on a tax-deferred (Traditional) or tax-free basis (Roth), depending on the type of account. If it is a Roth IRA or a Traditional IRA, move forward toward your financial goals.

Conclusion

Tax advantage accounts are one of the feet making up your three legged retirement stool. These three legs include your savings and retirement account, employer relate account such as a pension, and social security. In 2023, the limit on annual contributions to an IRA will be increased to $6,500. This total is up from $6,000 in 2022. On the other hand, there will be no change to the catch-up contribution limit. The IRA catch‑up contribution limit for individuals aged 50 and over will remain $1,000. If you are able to contribute to an IRA, take advantage and boost your retirement savings. Continue your journey to financial independence.

Follow me on Twitter @JoToFI_com

Follow me on Instagram @JoToFI_com

401k contribution limit in 2023

401k Contribution Limit In 2023 Has Increased

Money Maroon

401K contribution limit in 2023 is now $22,500. In 2023, the 401k contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan will be increased to $22,500. This total is up from $20,500 in 2022. If you have access to any of these plans, take advantage and boost your retirement savings.

Catch Up 401k Contribution Limit

The Internal Revenue Service (IRS) has also announced that the catch-up 401k contribution limit from employees will also be increased in 2023. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan will be increased to $7,500. This total is up from $6,500 in 2022. 

Taken together, starting in 2023, participants in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan who are 50 and older can contribute up to $30,000. The IRS has also noted that the catch-up contribution limit for employees aged 50 and over who participate in SIMPLE plans will also be increased in 2023. For these individuals, the contribution amount will be increased to $3,500 in 2023. This total is up from $3,000.

401k Match

This change does not appear to affect the match for employers. As you may already know, an employer 401K match means that your employer contributes a certain amount. Typically, the 401k match is a percentage of your annual salary to your retirement plan. This is in effect, free money. For most employees, if you contribute to your 401K, your employer does also. Take advantage of the added limits to further boost your retirement savings on your journey to financial independence.

Conclusion

Tax advantage accounts are one of the feet making up your three legged retirement stool. These three legs include your savings, employer relate accounts such as a pension, and a retirement account. In 2023, the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan will be increased to $22,500. This total is up from $20,500 in 2022. If you have access to any of these plans, take advantage and boost your retirement savings.

Follow me on Twitter @JoToFI_com

Follow me on Instagram @JoToFI_com

Internet Financial Guru

Where Are All The Internet Financial Gurus?

Money Maroon

It is interesting, and most likely you have also noticed. During boom periods, there tends to be a lot more noise from internet financial gurus. It could be a matter of folks being willing to share their experiences as the market booms. More specifically, there is typically a weekly or almost daily update about individual net worth. But what happens when the stock market begins to go south? Most, will stop sharing. A lot of internet financial gurus become very quiet. No one likes to share that they are losing money and if they are following their own advice, they are. But that is the big question, are internet financial gurus following their own advice?

Financial Gurus

During boom times, it is very easy to say keep buying, or buy the dip. But when the market is heading into recession territory, this becomes very difficult. Right or wrong, the more you buy the more you are losing in the short term as the stock market goes into the red. Also, the dip keeps getting dippier. So this is a very difficult message. As such, many internet financial gurus will stay quiet during these times, even if they are following their own advice.

Look At Your Statements

As the stock market goes south, are you looking at your account statements? It is interesting that as soon as we get wind of the stock market going down, we begin to develop this ability to not check our accounts. Do check your accounts. This is not to provide a reason to sell, but it is important to know what is going on in your accounts. Do not be afraid to look at your loses on paper. The stock market goes up and it will go down, and it will go up again. 

The same messages that financial gurus disclose during boom times are also applicable during a recession. If the information was true/false then, it is true/false during a recession as well.

Do Not Buy Individual Stocks, Buy Index Funds

As we have discussed before, a monkey can be a better stock picker than a human. So it is advisable, unless you are Warren Buffet, buy index funds. But when the stock market is going down, it can be difficult to stick to this strategy. But a clever man once said to be fearful when others are greedy, and greedy when others are fearful.

Stick to your strategy but use the market conditions, information, and your own situation to adjust your strategy. A stock market down turn does not mean that you should abandon your current strategy. In effect, if you truly believe in what you are doing, continue to do it and modify as information changes. This is also a matter of doing your research before you implement any strategy such that you are able to plan ahead and handle different situations. 

Recessions Are Filled With Opportunity 

As the past has shown, recessions are filled with opportunities. If you are in a stable financial position, you have no doubt pay down debt and has bulked up your assets. These are two basic steps that will prepare you  for a recession. Especially if you are in a high interest rate environment. More specifically, because banks will quickly raise interest rates on credit instruments, do not maintain balances if at all possible. If you have low to no debt, this is not something that you will have to worry about. Again, many of the statements made by financial gurus during boom time may be applicable as a recession approaches. Save, pay down debt, invest. This works no matter how good or bad the stock market is doing.

Cash Is King

If there is a recession and people are losing their jobs, having cash on hand is one way to ensure that you will be able to navigate such a situation for a year or two. Another advantage of having funds in the bank during a recession is the increased interest rates of online banks as the stock market falls.  During such a time, interest rates are typically increased.

There are many lesson to learn from recessions. If you are fortunate enough to still have your job during a recession, where you are consistently bringing in money, continue to save and invest. Avoid trying to time the market, because guess what, you likely cannot. Many have tired and have failed. Instead, consider dollar cost averaging and ride out the recession. No matter the economic condition, continue your journey to financial independence.

Conclusion

During boom periods, there tends to be a lot more noise from internet financial gurus. It could be a matter of folks being willing to share their experiences as the market booms. More specifically, there is typically a weekly or almost daily update about individual net worth. But what happens when the stock market begins to go south? Most, will stop sharing. A lot of internet financial gurus become very quiet. No one likes to share that they are losing money. But no matter the economic condition, continue on your path to financial independence no matter the rate of chatter.