This week on The Money-Guy Show, Brian and Bo review a piece from The Wall Street Journal’s Jonathan Clements. Clements shares the 5 keys to living a happier financial life in his recent article from a Sunday edition of WSJ.
Who doesn’t want to learn how to live a happier financial life? Money can be the cause of so much stress, but financial success isn’t as complicated as some think it is. Read on or listen in to find out what you can do to be happier.
Commuting Is a Huge Waste of Time
The first point Clements writes on: commuting destroys our happiness. Many of you can probably relate! Who enjoys being stuck in traffic for hours on end?
Clements cites a Swedish study that concluded longer commutes increase the risk of couples separating by 40%. He concludes the trade-off of dealing with a stressful drive into the city for a larger house in suburbia isn’t worth it.
Have Humility When Investing
Clements highlights that, as investors, we need to have humility. So many get caught up in trying to beat the market — but remember that “before costs, we collectively earn the market’s return.”
There’s also the issue of encountering high internal expenses when actively trading, although Bo and Brian note that fees have been decreasing over the past few years. They’re no longer the end-all-be-all when it comes to choosing what you invest in. Be smart about it.
Focus on Lowering Fixed Expenses
Clements says a third of the money typically spent in a household goes toward housing. By keeping housing and transportation costs down, we’ll have more money to spend on discretionary expenses, and we’ll be able to save more for retirement. Ideally, housing shouldn’t be more than 25% of your gross income.
Spend Money on Experiences
The guys are huge fans of spending on experiences rather than things, and couldn’t agree more with Clements on this point.
Brian touches upon the fact that when loved ones pass, we’re only left with memories. Similarly, when we pass, we can only take our memories with us. Make them count!
Don’t Work Just for a Paycheck
We all need to get paid, but working solely for a paycheck can be draining when you hate your job. Plus, what we enjoy doing early on in life might not make us happy later on.
Going back to the previous point, if we keep fixed expenses low, we can save enough to retire early, or at least take a paycut to transition to a better job in the future. Brian and Bo recommend doing what you love so it never feels like you’re working.
What Are You Doing to Live a Happier Financial Life?
These 5 keys to living a happier financial life aren’t extreme or hard to live by– they’re common sense. If any of these issues resonate with you, then maybe it’s time to make a change so you can increase your happiness.