Learn why FOMO may not be such a bad thing, why you need a plan for your future, how money can buy happiness, and more. In this episode of Fireproof Your Money, Wayne and Lisa Firebaugh cover the first four core money beliefs that you need to have in order to avoid making bad decisions with your investments.
- What you believe dictates how you act, and that matters in the world of politics and religion as well as your money. When it comes to money, what you believe matters.
- Wayne discovered early on that to help people achieve how to have the best life possible, he needed to have some principles and beliefs that allowed him to be consistent and predictable.
- Being predictable doesn’t have to be boring. The decisions made when you don’t have an underlying belief system are more prone to panic and error. It’s important to believe something a little deeper than “more money is better than less money.”
- That is essentially the study of behavioral finances.
- No matter how much you earn, your desires can exceed your means and you can make bad, emotionally driven decisions.
- Belief #1 - Money is your method, not your message.
- By any measure, we are living in the wealthiest age in human history and yet many people are deeply unhappy. You can have plenty of money and still be unhappy and stressed.
- It is possible to use money to buy experiences that can bring happiness. Money enables choice, but it is not the choice.
- Belief #2 - No one else will take care of you.
- Let’s look at retirement. Social security was meant to cover only 40% of your income, that means you have to come up with the remaining 60% yourself. Only 1 in 5 companies offer a private pension these days.
- We used to live in households where families took care of each other, now we expect the elderly to end up in nursing homes.
- The trend of going from pensions to 401(k)s has transferred the risk from the companies to the worker, who may or may not be ready to manage the investment.
- You have to rely on yourself and your own efforts.
- Belief #3 - Friend the FOMO (Fear Of Missing Out)
- Nobody likes missing out. Money requires us to make choices. Do you spend or save? Insurance or take the risk? You have to make a choice, even avoiding the decision is a choice itself.
- “Build on what you really want, not on what you think you should aspire.” -Mitch Anthony
- You can’t avoid missing out. We are comparing our reality to what we think everyone else’s existence is like.
- One of the traits of highly skilled and successful business people is that they are more likely to say no to demands on their time and money. Saying no is a skill that breeds success.
- The key to Friending the FOMO is by makingeducated decisions about the trade.
- Another way of thinking about it could be Join the Joy of Missing Out. Joy can be found in missing out for the right reasons.
- Belief #4 - Planning manages the transitions, timetables, and tradeoffs.
- Life is uncertain and we are always changing the season of our life. Every change and transition comes with a timetable and certain tradeoffs you need to make.
- Financial planning puts you in a position that enables you to deal with transitions, timetables, and tradeoffs in such a way that it keeps the most options available.
- There are four more beliefs that will be covered in the next episode.
To explore working with Wayne Firebaugh to fireproof your money, please call 855-WAYNE KNOWS or check out at fireproofyourmoney.com.
