A little while back I began jotting down some of the rules that I try and live by when it comes to personal finance. Eventually, I turned it into what you see below, something I’m calling a personal finance vision statement. My plan is to update this over time as I continue to learn more about money, investing and life. For now, here is version one.
I prioritize spending money on experiences that create lifelong memories for myself and the people I love.I avoid spending money on things that only bring short term satisfaction.I take into account the cost of ownership when making buying decisions, including money, time and headaches.
I measure my financial condition in terms of net worth, not income, with the understanding that my biggest asset at this stage of my life is my human capital.I do the work to prepare for the worst case scenario, such as establishing an emergency fund, getting my estate plan in order, and purchasing insurance. Then I go enjoy my life.I save aggressively and invest aggressively.
I don’t lend (buy bonds) when I can own (buy stocks). I stick to my investment plan regardless of current events, my mood, or recent investment performance.When investing, I take into account the costs of investing, including investment fees, taxes, professional fees, headaches, and time.I invest according to evidence, not fads, feelings, or gimmicks.I never try to time the market. Instead I invest as early and as often as possible.I avoid unnecessary risks and embrace those risks that are worth takingI diversify because I don’t know the future.I freely admit that I am not, nor is anyone else, smarter than the collective wisdom of the market. I ignore the news, the market forecasters, the talking heads, and my friends and neighbors when making investment decisions.
I don’t complain about taxes. I pay the taxes I owe according to the law and I pay them on time.I look to reduce my taxes, but I don’t obsess over it. I do a few simple things that will reduce my tax burden over the course of my lifetime.
I don’t blame others for my poor financial decisions. Instead I learn from them.I accept the fact that there are no guarantees in life, and much of what impacts my finances is beyond my control.I invest as a way to participate in the miracle of market capitalism. I recognize the role of luck, and I appreciate how fortunate I am to have been born at the most prosperous time in history in the wealthiest country on the planet.
Core Wealth Management is a fee-only wealth management firm located in Jupiter, FL. Our CFP® professionals provide investment management, financial planning and advisory services, while always strictly abiding by the highest fiduciary standards. For more information, contact us today at 561-491-0231.
Todd Schanel, CFP®, CPA, CFA, CVA is the Principal and Director of Investment Advisory Services at Core Wealth Management. He is a member of the CFA Society of South Florida.