3 life-changing money lessons I learned from personal finance writers

  • I host a podcast called The Rewarded Soul and I’ve interviewed some of the top personal finance writers.
  • Danielle Crosby taught me that being right doesn’t make you smart, and Nick Magiulli showed me that buying a home can require luck.
  • Brian Feroldi helped me see how no one person — not even Elon Musk — affects the price of a stock.

The public school system taught me nothing about financial literacy, and neither did my lower-middle class parents. Luckily, I’m a pretty curious person who loves to read, and at age 35, I decided I was going to learn how to invest, save, and get smarter with my money. I’ve read dozens of books about personal finance to educate myself, and I’ve had the privilege of talking with some of the authors on their podcast, the rewarded soul,

Danielle Crosby, Nick Magiuli, and Brian Feroldi have taught me a lot through their wonderful books, but I learned even more from being able to talk to them in person. The three biggest money lessons I’ve learned from these personal finance experts.

1. Being Right Doesn’t Make You Smart

From a young age, we are all taught to “trust our gut” and follow our intuition. As someone who has made a lot of terrible decisions based on my gut, I have direct experience as to why this is terrible advice.

When I came on the podcast to see Daniel Crosby discuss his book, “rules of money“I learned more about the science of why our intuition fails us on a regular basis. More importantly, I learned why our ego prevents us from understanding it sooner.

Crosby specializes in behavioral finance, which takes a look at our irrational behavior when it comes to money. He holds a PhD in psychology and explains how our thinking is often flawed. This is why we buy high and sell low when investing, although we know we should do the opposite. This is why we think we can predict the markets or not recognize the signs of a bubble.

I asked Crosby Why are we so oblivious to these mistakes we make on a regular basis while investing?

I learned that one of our biggest problems is that we highlight our victories and make excuses for our defeats.

When we’re right, it’s because we’re a genius, but when we’re wrong, it’s just bad luck. For behavioral finance experts like Crosby, results don’t matter most. The decision making process matters the most.

If I ran across the freeway and survived, it would not be a good decision. Similarly, if I dump a ton of money into a bad stock and, due to random factors, it doubles in price, that doesn’t mean it was smart to do so.

Taking a step back and evaluating the investment decision-making process has helped me form good habits with investing as well as other financial decisions.

2. Buying a Home May Take Some Luck

I wasn’t familiar with Nick Magiulli, but when his new book came out, I saw it in about a day. ,just keep buyingTaught me a lot because Magiulli challenges conventional wisdom through data. The book taught me why credit card debt isn’t always bad, and why you might not want to max out your 401(k). when he came on the podcastI wanted to ask him a little more about the idea that Millennials like me are in a tougher situation than previous generations.

I’m a single dad who works like crazy catching up on the hustle and bustle of various sides, and I recently started making over $60,000 a year. My girlfriend just finished her graduation for social work so she won’t make a ton of money. The housing market in Las Vegas, where we live, is out of control, and I don’t see how saving 20% ​​for the down payment is realistic. The average cost of a house in Vegas is over $43,000, so we would need to save $86,000. And that is, prices don’t go up unless we save that much.

While chatting with Magiulli, I asked her if there was anything I was missing because it didn’t seem within reach. Magiulli is a big believer in finding ways to increase your income, and I am too, but he acknowledges that it can take some luck in this housing market.

Without an incredible job opportunity, an inheritance, or any other major financial unpredictability, he told me it would be difficult to buy a home unless the market changed soon.

He lives in New York, and it’s quite common to rent there. Now, I’m thinking that for the foreseeable future renting might be the most realistic option for us as well.

3. No one person affects the stock

We’re not even half the year, and there’s no shortage of public outcry and controversy related to the stock. There are viral narratives about how Joe Rogan’s drop in Spotify’s share price or Elon Musk’s takeover on Twitter drove Tesla’s stock down. I was skeptical of these narratives, but I wasn’t sure.

Brian Feroldi just released his book, “Why does the stock market go up?“So I figured he’d be the best person to ask when I interviewed him on podcast.

When I asked him his thoughts on these news, he turned them down very quickly. He explained that we have to look at the market as a whole. By doing this, we see if it is just an individual stock price that is down or the market as a whole.

The stock market has been terrible for most of 2022, so on the day these stocks were down, so were most other stocks. Thanks to Feroldi, I know it’s never a good idea to believe these narratives about a single person crashing stocks – and I know it’s especially important that I make decisions based on these narratives. does not take

I am still a beginner in my financial journey, so I still have a lot to learn. I am extremely fortunate to be able to speak to some of these experts and learn directly from them, and I can’t wait to find more ways to improve my financial future.

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