Monetary Zen: Follow These 5 Tips To Achieve Financial Peace This Year
- Author: Mary Singleton
- Posted: 2024-08-20
COVID-19 clobbered 2020 and us along with it. As a result, we're all in search of a little calm after the storm - in our personal, professional, and pecuniary lives. That's why a whole lot of people, including major investors, are injecting a little zen into their portfolio approach over the next 12 months. What does that look like? How can you do the same? Grab a cold one and give us five minutes because we've got five tips for finding financial peace in 2021.
#1 Financial Peace Tip: Implement a Three-Fund Strategy
Impatience and FOMO have the power to eat away at profits - both potential and realized. This year, don't chase every opportunity that your cousin's brother's roommate's mom posts on Facebook. Instead, consider taking the three-fund route. Pick a stock market fund, international fund, and bond market fund. Purchase them in the right proportions for your portfolio and situation, set your dividend reinvestment levels, and then sit back and let it do its thing. Check it once a quarter to balance funds, but don't obsess over it daily.
Taking a step back can do wonders. Not only may your bottom line benefit, but you'll likely find that your quality of life improves too.
#2 Financial Peace Tip: Give Your Trading Trigger Finger a Rest
If you need funds to cover living expenses or unexpected emergencies, then sure, go ahead and trade. But otherwise, to achieve financial peace this year, just let it ride. Not only will it alleviate trading stress, but constant buying and selling make tax time a lot more complicated. And thorny taxes translate to costlier accounting and broker bills. So press pause and let your investments do some sit-and-hold work! They're better at it than you may think!
#3 Financial Peace Tip: Lean in to Auto Investing
If your savings and investment plan involves regularly rolling money into accounts, don't do it manually. Instead, set up auto deposits from your bank. Putting your personal finance operation on a set-it-and-forget-it schedule will free up your schedule and lower your stress quotient. Give yourself permission not to predict the market's trajectory. Instead, use the time to go on a hike or read a book or hang out with the family pet. You'll be better off for it!
#4 Financial Peace Tip: Date Only One Broker
If you use multiple brokers, consider downsizing. People who use one discount broker love the simplicity. Plus, it often gives investors a clearer picture of their financial pie. Outfits like Vanguard, Interactive Brokers, and Charles Schwab all have superb options.
Of course, there are certain instances when you may want to bring in another person. But if you're shooting for a sustainable level of financial peace this year, sticking to one custodian is the way to go.
#5 Financial Peace Tip: Release the Apps
It's 6:16 a.m., the alarm just shocked you awake, and the first thing you do is reach for that shackle called a phone and pop open the trading app. Reader, believe us when we tell you that's no way to live.
Now imagine gently rising with a healing stretch followed by some lemon water and a half-hour of pleasure reading. Doesn't that sound much better? And you can make it a reality! All it takes is deleting all those apps from your phone.
This year, break in a new routine that doesn't involve manically checking the market every 15 minutes. At first, it may be difficult. You may feel out of sorts. But after about a month, you won't be able to remember another way - and you'll be a happier, calmer person for it!
If you're a hopeless junky who cannot consider a phone swipe, at the very least, move them off the home screen.
Achieving financial peace this year is well within your grasp. Follow the five rules above, and before you know it, you'll be de-stressed, more productive, and who knows, the hands-off approach may net you more profit in the end.
Good luck, and may the pecuniary zen force be with you!
