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It’s Time to Stop Comparing Yourself to Others

It’s Time to Stop Comparing Yourself to Others

“Oh my goodness did you see the new Mercedes Kate just posted on Facebook? She is so lucky. My car is 6 years old and needs a new transmission.”

“No, but did you see the Instagram photos of Jessica’s family ski vacation in the Alps? It makes our weekend at Six Flags seem pitiful.”

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The current culture of prevalent social media has made it too easy for everyone to compare their lives to others, especially when it comes to material items and vacations. We can see the lives of friends, family, and others on social media and it becomes easy to want everything they have. We may even feel we deserve what they have. We can literally make ourselves miserable and unhappy by wanting what others have.

Materialism does not make us happy. Contentment comes from within. A mindset of gratitude for what you already have is more likely to make you happy than to endlessly pursue what everyone else may have in terms of possessions. There are ways to understand “The Joneses” that can help you stop wanting what others have and thus trying to keep up with them. Appearance can be deceptive. Just because someone appears to have lots of “stuff” doesn’t mean their life is better, or happier. In fact, trying to be a Jones can get you in lots of trouble and make your life quite miserable. Here are some thoughts to ponder about “The Joneses”.

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Debt so Deep They Actually Own Nothing

There are many families living in so much debt that they don’t actually own anything. They have debt on all of their vehicles with the bank owning more of their vehicles than they do. They have a mortgage on their home and put very little down when buying it. They buy their furniture on payment plans. Their credit cards are in full use and never paid off, as they are used to living beyond their means. Nothing they have is truly theirs. It is owned by the credit card company, the bank, and the furniture store. It is a life built like a house of cards that can come toppling down anytime with a major life catastrophe such as cancer, a debilitating car accident, or a home invasion that wasn’t covered by the home owner’s insurance. A life built on money borrowed is a scary way to live, because it can easily fall apart when tragedy strikes. And it will eventually strike, as no one is immune to accidents, health problems, or death. The question is only when it will strike. Too many “Joneses” aren’t prepared for tragedy, as they are living on borrowed money and esentially a borrowed lifestyle.

Buying a House at the Top of Their Budget

When shopping for a house it becomes easy to get lured into buying at the high end of your budget. It doesn’t matter your budget range, this is a human tendency; to want the maximum of whatever you are looking to buy. This is why many people become “house poor”. “House poor” means you have so much of your monthly income or budget going toward house payments that you have to sacrifice other things such as family vacations, parties, and other luxuries that you would otherwise be able to afford had you purchased a less expensive home. If they were to buy at the low end of their budget, think of the possibilities that could be done with that money each month that wouldn’t go towards an expensive home. Making memories are far more important than having the biggest, best house on the block. When you are on your death bed are you going to say “I am so glad I had the best house among my friends” or will it be something a long the lines of “I am so thankful for the time that I got to spend with friends and family in my lifetime, and all the wonderful memories we had together.”

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Fake, Faux, Replica

Whatever you want to call it, wearing or using something that is a knock-off of the original is… saving money? Being fake? Who cares. Not our business. Just know that not all of what you see others wearing or using in life is the authentic brand. Knock-offs are everywhere these days, so don’t compare your handbag to others because you may be thinking they paid $400 when in reality they spent $25. Buy what you like because it’s your style and what you want, not because of a brand or because others own it. Happiness comes from being yourself, not someone who you think others want you to be. Don’t be a fake and don’t buy a fake because you think you will be happier, neither will successfully make you happy in the long term.

Living Paycheck to Paycheck

There are many people in our country living paycheck to paycheck. They don’t have money in savings and they don’t have money squirreled away for emergencies. They may seem to have it all because of everything that they have and all that they do, but they are really on the brink of disaster. If tragedy strikes they will be in a world of hurt because of their overspending and lack of saving. Living paycheck to paycheck out of necessity is one thing. It is another story when living this way is purely done for the satisfaction of our desires. Living by the urge to buy, buy and buy will not bring happiness long term. It will set you up for disaster, lots of worry and anxiety when living paycheck to paycheck is done for the pursuit of happiness in materialism.

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Sometimes They Are Lucky

They may have a wealthy spouse or they have a family inheritance. They may have a fabulous job and have made wise saving choices to afford what they have. You don’t know. Frankly, it’s none of our business. All that matters is that we are responsible with the money that is provided in our own lives. Living within our means gives us peace of mind that is precious. Having anxiety about money destroys marriages. It can give people so much angst that they need to now spend money on counseling or even worse, a divorce.

Living within a budget and the means you have will provide you contentment, as long as you stop comparing yourself to others. Look in your own life and what you do have. Find gratitude daily in the things you may have, such as a vehicle that works, a roof over your head, and food on the table. There are many in the world without these basics needs for survival. Look to the less fortunate for your comparisons if you have a need to compare. Gratitude should be the response, which makes you more content with all that you have been blessed with in this life.

Featured photo credit: Cadillac via kaboompics.com

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Dr. Magdalena Battles

A Doctor of Psychology with specialties include children, family relationships, domestic violence, and sexual assault

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Published on May 7, 2019

How to Invest for Retirement (The Smart and Stress-Free Way)

How to Invest for Retirement (The Smart and Stress-Free Way)

When it comes to stocks, I bet you feel like you have no idea what you’re doing.

Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

Here’s how to invest for retirement the smart and stress-free way:

1. Know Clearly Why You Invest

Odds are you already know why should invest for retirement.

But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

  • Will you spend more time with your family?
  • What does retirement mean to you?
  • Are you looking to launch that business you’ve been holding off for years?

Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

2. Figure out When to Invest

“The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

Investing your money well depends on your emotions.

Why?

Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

4. Open a Reliable Retirement Account

Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

  1. Vanguard
  2. TD Ameritrade
  3. Charles Schwab

5. Challenge Yourself to Invest Consistently

Committing to invest for retirement is hard, but continuing to do so is harder.

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Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

6. Consider Where to Invest Your Money

The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

Robo Advisors

Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

Bonds

Think of bonds as “IOUs” to whomever you buy them from.

Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

Here are the different types of bond categories:[5]

  1. Treasury bonds
  2. Government bonds
  3. Corporate bonds
  4. Foreign bonds
  5. Mortgage-backed bonds
  6. Municipal bonds

Mutual Funds

Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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Real Estate

Yes, buying a home is an investment when done correctly.

Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

Savings Accounts

Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

7. Master Disincline to Dodge Short Success

Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

So how can you master delayed gratification?

By building your discipline.

Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

8. Aggressively Invest on This One Investment

I’ve mentioned several types of investments but haven’t covered the most important one.

It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

But, how can you invest yourself?

Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

Retire Happy with Excess Money

The key to a secure financial future doesn’t only belong to financial experts.

It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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Featured photo credit: Matthew Bennett via unsplash.com

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