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Money Psychology, On Investing, Women and Financial Literacy

My First Stock Purchases (at the Bottom of the Great Recession)

For those of you who are familiar with the stock market, do you remember the time when you first got introduced to it? What were some of your early associations with the stock market? At the time, were you anxious to get into it? Was the market something you swore to avoid?

first stock purchases

My Dad’s Warning Message (to me) on the Stock Market

My first impression of the stock market occurred right at the start of the Great Recession. One day, in November 2008, I was having dinner with my family. The news was on the television. I recall my dad telling my brother and I to never ever “gamble” in the stock market.

Yes, to him, participating in the stock market was a form of gamble, not a form of investment. This was coming from someone who had very limited exposure to the stock market other than what he saw and heard on television. However, not knowing any more of the stock market than my dad did at the time, I took his words to heart. The stock market was something to avoid.

In the following weeks, the messages and images that kept showing up on mass media (covering the beginning of the Great Recession) just confirmed my dad’s belief of the stock market. Seeing and hearing stories of people jumping off buildings, losing their marriages, going into jail, becoming depressed and/or losing their children’s college savings and/or their own retirement savings—all due to steep drops in the stock market—just “proved” the evil side of “gambling”. Yes, the stock market was evil, I concluded.

The Man I was About to Meet and What He Taught Me About the Stock Market

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Financial Independence, Financial Journey, Financial Planning, Lifestyle, Money Habits, Money Psychology, Purchase Decisions

Three Ways to Enjoy Today While Building and Maintaining a High Savings Rate

On the Path to Financial Independence

As you work toward your financial goals, does it sometimes seem like you’re sacrificing too much today just so you can have a better life tomorrow?

If that’s the case for you, you might be having mixed feelings. I know I’m too familiar with these feelings. A bunch of high days were mixed in with a bunch of low days. There were times when I wished my days away as I eagerly waited to taste the life of having reached millionaire status. During those periods of time, I was not living in or enjoying the present moment. I did not want to spend any money other than the absolute necessary. All I focused on was reaching the million-dollars goal. In that process, I neglected myself in many ways. I went through emotional struggles and have shed lots of tears.

high savings rate

The path to financial independence is not an easy one. There’s no shortcut. Even those who are very disciplined and hardcore (with high savings rates) still take anywhere from 7 to 20 years to get there.

For some of us, we’re okay taking our time. A 20-year horizon is not so bad. For some of us, even a two-year time frame is almost unbearable (and each of us have our own reasons). If you’re in the latter group, sometimes, it’s easy to get into the danger zone of depriving ourselves when we think we’re only being frugal (the gray area between being frugal and feeling self-deprived can be blurry).

When prolonged self-deprivation is left unnoticed, we could be putting our health and our financial plans in jeopardy. Not only is self-deprivation unhealthy, this behavior can lead to the resentment of oneself and others who are in the same team as you (such as your spouse and/or children).

Recently, I caught myself going down the self-deprivation slope. My emotions were strong. In this article, I’m sharing my story. I also recommend three ways for you to stay on course to reach your savings goal without going into self-deprivation mode.

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Financial Empowerment, Financial Freedom, Financial Journey, Money Psychology, Purchase Decisions, Women and Financial Literacy

My Financial Transformations

Financial Independence Mindset

It’s been six months since I learned about financial independence (FI) and this way of life. What does financial freedom look like? How would you structure your life when you no longer have to answer to an employer and/or manager? You can read about this lifestyle in an earlier article I wrote here.

In this article, I’m sharing six financial transformations I have gone through since I became aware of FI. These observations and self-reflections surprised and fascinated me. I used to think I was stuck in a certain way and that was how I was going to be. Nowadays, I believe in the transformative power of adapting a financial independence mindset and the psychological freedom that comes from living life this way.

financial independence financial transformation

Six Financial Transformations

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Financial Planning, Money Psychology, Personal Finance

Don’t Like Budgeting? You Can Still Take Control of Your Finances

Budgeting is just one way of managing your money. My husband and I don’t do budgeting. In this post I shared other strategies and tools we use.

What comes to mind when you think of budgeting? If you think it’s tedious, stressful, or restrictive, then you’re not alone!

budgeting strategies to managing personal finances

Many people claim budgeting is good for your financial health. Much has been written on this topic, from why you need a budget to creating a budget to managing a budget. For a short while, I truly believed having a budget was the way to become wealthy. But my husband and I passed on it after we had a long discussion on the topic. That was in year 2010.

Six years later, my husband and I decided to give budgeting a try. Many personal finance bloggers were doing this. They must knew something, right? We wanted to see what expenses we could cut. The lower our expenses are, the earlier we can retire. We tried for three months. Our consensus? The process was painful, tedious and mentally difficult. It was not about the math. The formulas were simple and the spreadsheet took care of the calculations. It was not about our different views on money. We generally agree on how to manage our household finances. It was not a lack of patience. My husband tracks our portfolio performance almost on a daily basis, and this involves lots of number tracking and focus. So what did it come down to? We lacked commitment. We didn’t see the benefits.

Were we doomed? Continue Reading

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Financial Journey, Financial Planning, Investment, Money Psychology, Retirement Planning

Rule of 72: Harnessing the Cumulative Power of Compound Growth

Readers, does hearing about the prospect of doubling your money get you excited? Wondering what’s the best way to start saving for retirement? Would you be more likely to do financial planning if you have access to simple and efficient tools? Do compound interest formulas intimidate you? Don’t know how to use a financial calculator or don’t carry one in your purse? If you responded “yes” to any of the questions above, the Rule of 72 can be your friend.

Mathematical formulas don’t excite me. I skip over them in my readings. While I enjoy thinking about retirement, I am not interested in running the numbers. Even retirement calculators ask for numbers! My husband told me about the concept of compounding shortly after we met, but I had a hard time grasping how the numbers could work in my favor. Or was that a form of mental resistance?

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