Money Musings šŸ’­ You NEED to know this about investing

Money Musings šŸ’­ You NEED to know this about investing

The stock market has been on quite a rollercoaster šŸŽ¢ (to say the least). It's a nerve-racking time to be an investor.

I have some strategies to make it a bit easier (see below) but the most important thing to remember is this:

You donā€™t lose money (or make money) until you sell.

When your investments are down, you havenā€™t lost money.

Thatā€™s why itā€™s so important to invest for the long-term. Because when you have time, you can wait out the downturns in the market.

So while your investments might be down, you havenā€™t actually lost money.

You donā€™t lose or make money until you sell your investments, and the worst thing to do is sell when the market is down, especially out of fear.

Historically, the stock market has returned about
8.3% on average (adjusting for inflation), so just hold on tight.

Some others tips to reduce stress during a turbulent market:

  1. I give you full permission not to look at your investments. If you know youā€™re investing for the long-term why torture yourself?

  2. Have a money buddy or financial professional to turn to. You can commiserate about whatā€™s happening and check in with one another. Make sure they know that your goal is to invest for the long-term.

  3. Find a money community or follow money mentors who can support you, inspire you and answer questions. We have a Slack community you can join here!

  4. Look at some historical scenarios. If you had invested before the Great Recession or the drop in 2020, what would have happened with your investments during the drop and then one, two and five years later?

  5. Remember: You havenā€™t actually lost money. You donā€™t lose or make money until you sell.


How are you feeling about your investments? Whatā€™s worked to manage stress when your investments are down?

MONEY MOVE OF THE WEEK

CREATE YOUR HOLIDAY BUDGET.

Earlier this month we learned to make our holidays fabulously frugal, now itā€™s time to budget for them.

For many, November and December are the most expensive months of the year. There may be time off work for travel, holiday parties galore and/or gift-giving.

Hereā€™s how to put together your holiday spending plan so you arenā€™t left stressed about money over the next couple of months.

  • Realize holiday spending isnā€™t just about gifts. Holiday spending can include travel, transportation, clothes (for parties), hosting friends and family, convenience spending (when youā€™re busy), host gifts, holiday bonuses, decorations and activities (like ice-skating).

  • Get clear on what matters to you. What about the holiday season is important to you and worth spending money on? What isnā€™t? Maybe you love hosting friends and family and get exhausted by too many holiday parties. Or maybe you want to take a weekend getaway but find holiday decorations a hassle.

  • Make a detailed spending plan. List out anything you plan to spend during the holidays that are outside of your regular spending. The more detailed the better. If you are getting four gifts, break them down by amount. For example, Iā€™m getting four gifts for $40 each (here's our gift guide).

  • The earlier you make your plan the better. Generally, the earlier we plan the less we spend. We might get the opportunity to take advantage of a sale or if youā€™re booking holiday travel, typically the earlier we book, the cheaper it is. With more time we also donā€™t have to rush through purchasing decisions.

  • Reevaluate for next year. Take the time to reflect how it all went. Did this help your spending feel less stressful? Were you in a better place come January? If you spent outside your plan or forgot something completely, what was it? While the next holiday season is over a year away, we can make our plan even better for next year AND these steps can be applied to any spending category or holiday.

YOU GOTTA SEE THIS

THE CLIMATE HERO QUIZ.

Over the last few months Iā€™ve taken a deep dive into learning more about climate change and what needs to happen to slow down the temperature rise on our planet.

Itā€™s an extremely overwhelming topic and along my own learning journey itā€™s been hard to quantify the things I can do to help or even know where to start.

Thatā€™s why I love this Climate Hero Quiz. While I know there is so much nuance to our impact on climate and that the majority of the work has to happen at the policy and corporate level, it was helpful to see what small changes I can make to help. AND to get an estimate of what that impact looks like (in CO2 tons) as well as what the overall goal is.

It was eye opening to see what businesses could have the biggest impact in supporting a reduction in CO2 emissions per person.

If you are curious, check out the quiz here. Full disclosure - despite the steps I take, I was a climate villain (I knowā€¦ harsh). Iā€™m applying my approach to money to climate - taking a small step each week.

If this is something that you are interested in learning more about or sharing together, hit reply and let me know. Also, if youā€™ve found resources you love, please share!


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