What financial advice should everyone be aware of?

Here is a 40 advices list

What financial advice should everyone be aware of?

There are hundreds of thousands of personal finance books published around the world - if not more - containing billions of words. This seems absurd, however, because 99% of personal finance advice can be summed up in seven words: Work, spend wisely and invest the difference.

More often than not, important financial topics do not require long and complex explanations. Most can, and should, be summarized in one or two sentences.

Here is a list of some financial tips:

1. Invest only in products and companies that can be explained to a child.

2. Use the dollar-cost averaging investment to your advantage. That is, spread your investment over time to minimize the effects of volatility.

3. Every 5 to 7 years, people forget that recessions occur every 5 to 7 years.

4. You are twice as biased as you think you are (and four times as biased if you don't think you are biased).

5. Read fewer articles and more books.

6. Read more history and fewer economic, political, or other forecasts.

7. You see your doctor only once a year but your investment portfolio every day...

8. Judging an investor on the quality of his thinking, not the performance of his last transaction.

9. Our circle of competence is certainly 90% less extended than we think.

10. Checking one's investment portfolio as infrequently as necessary to avoid hasty decisions.

11. When in doubt, always choose the investment with the lowest cost.

12. Emotional intelligence is often more important than theoretical knowledge.

13. The more we learn about economics, the more we realize that we have no idea what is really going on.

14. Start saving for your children before they are born and start saving for your retirement before you get your first job. It will probably seem silly at first, but it will become much less silly over time.

15. The most effective way to make your money grow is to learn to live with less, which is the only thing you have total control over.

16. Singer Rihanna almost went bankrupt and fired her financial advisor, who described her situation well: "Was it really necessary to tell her that if you spend money on things, you end up owning those things and not money?

17. We don't have to have an opinion about anything.

18. On the contrary, we are obliged not to have an opinion on things we do not understand.

19. Holding 60% of one's assets in stocks and 40% in bonds is not an ideal strategy for everyone; but I can think of a thousand worse strategies.

20. Consider the role that luck has played for some of our models.

21. Avoid unnecessary borrowing (e.g. consumer credit).

22. Change your mind as often as the facts change.

23. Ignore people who refuse to change theirs when the facts change.

24. Read last year's market forecast and you will never take this year's forecast seriously again.

25. Warren Buffett's speeches may lead you to believe that what he accomplished is easy to replicate. This is not the case!

26. Don't be in a hurry. Think about each investment decision for a week and seek advice from someone you trust.

27. Always spend your money appropriately according to your income.

28. Warren Buffett had this to say about unnecessary risk-taking: "To earn money they didn't have and don't need, some people risked what they had and what they needed. And that is just plain stupid" [1].

29. You can afford not to be a great investor - but you can't afford to be a bad one.

30. You are twice as gullible as you think you are.

31. Learn more from bad investments than from good ones.

32. Educate your children about financial matters before they are old enough to earn their own money.

33. Recognize when you are wrong.

34. There is, and always will be, more money to be made by providing investment advice than by receiving it.

35. Assume the worst, hope for the best, accept reality.

36. The correlation between trust and future regret is incredibly high.

37. Over the last 100 years, there has been 10% more setbacks than Christmas. Everyone knows Christmas is coming; think of volatility in the same way.

38. To quote Larry Summers: "A good rule of thumb for many things in life is that things take longer to happen than you think, and then happen faster than you think."

39. There is a strong negative correlation between displaying money and being rich.

40. Investors were probably better informed 20 years ago, when there was 90% less financial information.

personal finance
Louis choquet
Louis choquet
Louis choquet

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