Here is a tip I learned late in life and try to remember these days that may be helpful to my younger peeps: Be careful of the advice you receive from others. Because while we are all in the same game of life, we are not all playing by the same rules. Be careful, because we are not exposed to the same resources, tools, exposure, experience, knowledge, or background. We are also not taking the same level of risk (even with the same amount invested). We don’t have the same time. So be cool about listening to advice, but ensure you act based on what you believe best suits your situation.
Look at it this way: Many people are simply giving you a pitch to make more money based on their motives. Frequently, you may see tips and advice that are taken from Warren Buffet, Bill Gates, and other extremely successful individuals, and you are convinced that following them will lead you to become a billionaire as well. This is not the case. Most of these individuals had many other unseen advantages working in their favor that are not widely written about or discussed. These advantages are not replicable by us. For instance, did you know that most of Warren Buffet’s wealth was created by his consistency in compounding his money over several decades, and he made a large chunk of his wealth after he qualified for social security? This man has been investing since he was in his teens. How many of us right now have that timeline for our money to grow?
Take Bill Gates. He was fortunate enough to have been attending Lakeside High, which was the only school in the United States at the time that had the resources and forward-thinking people to contribute a computer to the school. The school did not even have computer studies as part of its curriculum at the time, and Bill Gates had access to a resource that 99% of the population at that time didn’t. Can we replicate a situation like that to be on par with becoming the next Bill Gates? These are pieces of the getting-rich puzzle of many of these rich icons that are not replicable. While many of the resources we consume share lessons from these industry leaders and mega-wealthy individuals, try to remember that your situation is different. Your life isn’t a copy-and-paste mechanism like a computer, where you can implement what others are doing and always get the same results. Some habits can and should be adopted from these individuals’ stories about their journey. I just want you to avoid the trap of thinking that their path can be implemented in your life and that you can get results just by simply following them.
So here is what we are rather instructed to do based on the book “The Psychology of Money by Morgan Housel” : ensure you assess your situation thoroughly and develop a plan that you can follow for the long term without it being interrupted. Remember, Warren Buffet has compounded his wealth over a long period of time—over 50 years of investing in stocks. So compounding does work. What won’t work is interrupting the process of compounding because you did not give any room to accommodate the ups and downs of life and its inevitable unforeseen circumstances. This book gives very practical advice that anyone can implement in their financial planning.
Money is more about psychology and what goes on inside your head. No one should tell you what to do with your money because your situation is unique. Generalizations regarding advice for money are what the market tries to sell us, and we often get frustrated when the results are not achieved. I suggest taking the time to read this book and applying the mental restructuring about money based on your unique situation.
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