The Whole Truth

Feb 25

2011

More Great Money Advice For Consumers I Want You to Ignore (If You Are An Entrepreneur)

by Alexis Neely - Posted in Business |

As I often tell my kids, there are three things you can do with your money and only two of them will create more.

You can either spend it, invest it, or give it.  Spend it on eating out, clothes, cars, and other consumables will make it disappear.  Investing it or giving it will make it multiply.

And so I love that M.P. Dunleavy, the author behind Money CAN Buy Happiness, took action to invest the windfall her and her husband recently received after she realized she was blowing it each month by spending it when it came right into her bank account.  She took the windfall and had it allocated right into her Fidelity investment account and added it to her Roth IRA.  This is great advice for a consumer.

And it seems like a great idea, right?  According to Dunleavy,  her and her hubby will be $471,000 richer over their lifetime if they just keep investing the same amount they are receiving monthly from their windfall.  Sounds good, right?

Until you think about this …

Between December 2007 and December 2008, retirement accounts were decimated by an average of 32% when the markets crashed (that’s over $2.8 TRILLION!).  Nearly half of the money people had been stashing away their entire life, instead of investing it in themselves, was gone in a matter of minutes.

Imagine if you took that same windfall and invested it in the growth of yourself and your business.  What if you invested that windfall in something that could never be taken away from you – your own education and experience?  Then, it wouldn’t matter what happens in the economy, you would be on the upside.

You could turn that windfall into a revenue stream you can count on until you die, no matter what the stock market does.  Sure, it’s risky.  But, listen, everything is risky right now.

We are in the midst of a massive evolution and transformation.  Personally, I’d rather bet on you being able to keep up with it a whole lot more effectively than the big corporations and government can.

And, listen, if you aren’t going to invest in you, who else will?  Would love to hear your thoughts.  Let’s discuss it in the comments below.


  • Ann-Michele Timmerman

    First of all, I love that you are educating your children about money at a young age. Smart. And I couldn’t agree more with your article. I believe that “true empowerment” over our money lives is simply another reflection of being empowered and at the helm of the ship in terms of all aspects of our own lives.

    Thus, as you intimated, what we do with our earnings shouldn’t depend on something external and essentially unpredictable…government, corporation, etc. As the old adage says, “Learn to master your money so that your money doesn’t master you.”

    So glad you bring these points out, Alexis!

    Ann-Michele.

  • Pat LaRusso

    While I accept your premise that investing in one’s future is a good thing, it’s misleading to use the loss of value in the market to make your points since the value has been made back and everyone who stayed in at their original position has made their money back, with very few exceptions.

  • I think this is a very useful piece of advice for people who think mutual funds are the best form of investments. Alexis, you are right about investing in ourselves. Nothing can take away the things you learn from personal development and they end up becoming convertible resource that can make you more money on the long run.

    Thank you for the advice.

  • I think this is a very useful piece of advice for people who think mutual funds are the best form of investments. Alexis, you are right about investing in ourselves. Nothing can take away the things you learn from personal development and they end up becoming convertible resource that can make you more money on the long run.

    Thank you for the advice.