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Ideas for Frugal Living | Three Life Lessons | Fidelity

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“The lessons they taught us about money—about not spending more than we have, saving what we can, and splurging occasionally and mindfully”

Three (3) lasting lessons from my frugal parent

Frugal living can help separate the important financial expenses from the not so important. Learn helpful lessons and ideas on frugal living here.

BY JEANNE THOMPSON FROM FIDELITY – 06/07/2019

I’ll never forget my first “real” vacation.

Most of our family vacations were camping trips where we slept together in a tent or a pop-up trailer and my mom cooked for my 4 siblings and me at the campsite. But the summer after fifth grade, my father decided to take me, my mom, and my 2 older sisters with him on a business trip to California.

That trip really stood out. I remember relaxing by the pool in sunny San Diego, sipping Shirley Temples with my sisters. We were fascinated by the elevators in our big hotel and rode them up and down until we were sternly told to stop. Simply put, it was paradise.

This trip was an unusual extravagance for my parents, too. You can’t raise 5 children on a limited income without being very frugal. And my parents, who were both first-generation Americans, were used to getting by on very little. Excess was not an option. At Christmas, my mom would save nice wrapping paper and reuse it; boxes were also recycled for many holidays to come. Folding a little piece of wrapping paper in half, writing a note inside, and taping it to a gift worked just as well as buying a greeting card. She reused everything from tin foil to plastic baggies. Her approach to money and possessions was pretty consistent: “Make do with what you have.”

These habits and quirks used to make us laugh. Today, I appreciate the example my parents set. I resist spending money on big-ticket items. My car, for instance, is a 2010 model and has 150,000 miles on it. And most of the furniture in our house is at least a decade old (if not a few decades). I’m not about spending a lot on furniture —with a teenage son, our couch becomes a dumping ground for lacrosse equipment more often than not. I even save nice wrapping paper from time to time, much to the amusement of my kids. And because of the warm memories from that long-ago California trip, I’d much rather spend money on experiences my family can enjoy, like vacations, than on stuff.

Maybe it’s wishful thinking, but I like to believe that my parents’ mindful approach to spending lives on in my kids, who seem to appreciate the value of a dollar on some days at least. My college-age daughter takes pride in her 5-star rating on a ride-hailing app because it entitles her to discounts and coupons. My son, a high school senior, is already savvy about mutual funds and 401(k)s—thanks to conversations he tunes into at home and an intro to business class he takes at school. Both kids know that they need to budget for indulgences beyond the basics and that they’ll have to pay for them with money earned from their jobs.

Both of my parents are gone now, but their frugal approach to working diligently and saving money allowed them to raise kids. And not only that: They put enough away to build a nest egg that funded some retirement travel to Europe, Russia, and Alaska in their golden years. By then my father came around to reasoning: “You can’t take it with you.”

They still managed to leave something behind. The lessons they taught us about money—about not spending more than we have, saving what we can, and splurging occasionally and mindfully—are with all of us. And those occasional splurges they encouraged us to enjoy are as sweet as those long-ago Shirley Temples under the warm California sun.

— Read on www.fidelity.com/mymoney/frugal-living-ideas-and-life-lessons

Schwab Sector Views: New Sector Ratings for the New Year | Charles Schwab

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By Schwab Center for Financial Research

Macro environment:  Rising stocks and Treasury yields, fading U.S. dollar

We [Charles Schwab] continue to see a gap between the health of the manufacturing sector and that of the services sector and consumers. Despite recent U.S.-China trade war de-escalation, manufacturing activity remains under strain from ongoing tariffs, new tariff threats and still-elevated trade policy uncertainty, combined with slow global growth. On the other hand, the services sector continues to thrive amid strong consumer confidence and consumption, in large part due to a strong job market. 

While economic momentum overall has slowed, we do see signs of stabilization in both the United States and abroad. Accommodative monetary (central bank) and fiscal (tax cuts and government spending) policies have provided a strong tailwind for the global economy.

The signing of a “phase-one” trade deal between the U.S. and China, combined with congressional passage of the new U.S.-Mexico-Canada (USMCA) trade pact, have eased some trade uncertainty. Amid this apparent global economic revitalization and shrinking trade risk, Treasury bond yields have risen, the value of U.S. dollar has declined and U.S. stocks have advanced to record highs.

However, geopolitical risks—while reduced somewhat—remain elevated, and equity valuations are high. Given this combination, we think bouts of increased volatility and more frequent pullbacks are possible. This doesn’t necessarily mean the rally won’t keep going—it’s likely the strong momentum in stocks may continue until there is a catalyst sufficient to deflate the current extremely bullish investor sentiment—but the risks need to be considered.

— Read on www.schwab.com/resource-center/insights/content/sector-views

Huawei’s Threat to Communications Networks

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Updated: Saturday, 2/15/2020

“Most people are starting to realize that there are only two different types of companies in the world: those that have been breached and know it and those that have been breached and don’t know it. Therefore, prevention is not sufficient and you’re going to have to invest in detection because you’re going to want to know what system has been breached as fast as humanly possible so that you can contain and remediate.” Ted Schlein, a venture capitalist with Kleiner Perkins Caufield & Byers.

To begin the discussion, it is important to understand that communications, such as telecommunications and internet data networks, are vital to national security and are critical infrastructure for every sovereign nation. Since critical electrical grids, 5G technology, autonomous vehicles and even hospitals rely on the communication networks.

U.S. Intelligence Sharing

U.S. Defense Secretary Mark Esper warned allies that letting the Chinese firm Huawei build their next-generation, or 5G, network risks their security cooperation and information sharing arrangements with U.S. intelligence and national security agencies. The U.S. SECDEF remarked that, “reliance on Chinese 5G vendors, for example, could render our partners’ critical systems vulnerable to disruption, manipulation and espionage,” in a speech at the high-level Munich Security Conference in early 2020. “It could also jeopardize our communication and intelligence sharing capabilities, and by extension, our alliances.”

“National security is a serious matter and I do not think it is improper to discuss such details in a public forum.” Narendra Modi

One recent morning on Yahoo Finance, an on-air guest was dismissive about Huawei 5G technology and the U.S. Administration’s allegations that the Chinese technology giant has built backdoors to communication networks that they installed across the globe. Additionally the on-air guest stated that the Trump Administration needs to provide evidence of Huawei’s complicity to spy for China.

What the guest commentator omitted from his less than transparent comments was that unlike U.S. technology and telecommunications companies, Huawei has functioned as a tool for surveillance and espionage for the Communist Chinese government. In addition, they have been significantly subsidized for more than a decade by the Chinese authoritarian government. Thus, this is the reason that they can substantially underbid their Western competitors on 5G network projects across the globe.

Furthermore, despite Huawei’s adamant denials, they have built backdoors into the communications systems that include Huawei technology, equipment and software, or in networks that have been installed by them or their affiliates. Essentially, a backdoor is a method of bypassing a network’s security protocols to access communications or computer network.

Vodafone in Italy

U.S. Intelligence agencies have repeatedly warned allies regarding the potential threat posed by Huawei’s technology if installed in 5G networks. Back in April 2019, Yahoo Finance reposted a Bloomberg article that Vodafone Group, Europe’s biggest phone company, discovered hidden backdoors in the software installed by Huawei that could have given Huawei or the Chinese government unauthorized access into the Vodafone’s voice and data network. Although the backdoor was discovered and reportedly removed by Huawei, subsequent investigations by Vodafone discovered the the backdoor remained.

“We’re talking about the fate of our economy and the questionable resiliency of our Nation’s critical infrastructure. Why are experts so polite, patient, and forgiving when talking about cybercrime, cyber security, and National Security? The drama of each script kiddie botnet attack and Nation State pilfering of our IP has been turned into a soap opera through press releases, sound bites and enforced absurdity of mainstream media. It’s time for a cybersecurity zeitgeist in the West where cyber hygiene is a meme that is aggressively distributed by those who have mastered it and encouraged to be imitated by those who have experienced it.” James Scott.

Deterring Chinese cyber-espionage

We must not allow ourselves either to be misled by Chinese repeated denials or to rely solely on U.S. entertainment media’s reporting by omission regarding the cyber security risks posed to U.S. and its allies’ communications networks once Huawei’s equipment is installed. Effectively, Huawei is a Chinese Communist state-controlled enterprise. And, it operates at the behest of the Chinese Communist Party in surveilling their own citizens, and assisting with spying and espionage against foreign nations.

Bottomline, Huawei, and its affiliates, represent a national security threat to the United States, our allies, and our privacy. If they’re permitted to install their technology, equipment and software in critical communications infrastructure, backdoors and unencumbered access would exist. Their technology does pose a real threat to the economy, the critical communications networks and the critical infrastructure that relies on the communications backbone.

References:

  1. https://www.defensenews.com/congress/2020/02/15/esper-huawei-5g-could-risk-us-information-and-security-ties/?utm_source=facebook.com&utm_medium=social&utm_campaign=Socialflow+DFN
  2. https://www.c4isrnet.com/battlefield-tech/it-networks/5g/2020/02/12/white-house-claims-huawei-equipment-has-backdoor-for-spying/
  3. https://www.state.gov/huawei-and-its-siblings-the-chinese-tech-giants-national-security-and-foreign-policy-implications/
  4. https://www.forbes.com/sites/haroldfurchtgottroth/2017/05/08/chinese-government-helps-huawei-with-5g/#67ea148b6bae
  5. https://www.rickscott.senate.gov/sen-rick-scott-attorney-general-barr-keep-huawei-out-us-markets
  6. https://securityfirstcorp.com/cyber-security-quotes/

Schwab Sector Views: New Sector Ratings for the New Year | Charles Schwab

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Macro environment:  Rising stocks and Treasury yields, fading U.S. dollar

We continue to see a gap between the health of the manufacturing sector and that of the services sector and consumers. Despite recent U.S.-China trade war de-escalation, manufacturing activity remains under strain from ongoing tariffs, new tariff threats and still-elevated trade policy uncertainty, combined with slow global growth. On the other hand, the services sector continues to thrive amid strong consumer confidence and consumption, in large part due to a strong job market. 

While economic momentum overall has slowed, we do see signs of stabilization in both the United States and abroad. Accommodative monetary (central bank) and fiscal (tax cuts and government spending) policies have provided a strong tailwind for the global economy. The signing of a “phase-one” trade deal between the U.S. and China, combined with congressional passage of the new U.S.-Mexico-Canada (USMCA) trade pact, have eased some trade uncertainty. Amid this apparent global economic revitalization and shrinking trade risk, Treasury bond yields have risen, the value of U.S. dollar has declined and U.S. stocks have advanced to record highs.

However, geopolitical risks—while reduced somewhat—remain elevated, and equity valuations are high. Given this combination, we think bouts of increased volatility and more frequent pullbacks are possible. This doesn’t necessarily mean the rally won’t keep going—it’s likely the strong momentum in stocks may continue until there is a catalyst sufficient to deflate the current extremely bullish investor sentiment—but the risks need to be considered.
— Read on www.schwab.com/resource-center/insights/content/sector-views

Uncertain Financial Markets

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“Don’t gamble. Take all your savings and buy some good stock and hold it till it goes up; then sell it. If it don’t go up, don’t buy it.” Will Rogers

Since the financial crisis of 2008-2009, the U.S. stock market has been on a long-term uptrend. In the crisis’ aftermath, a nearly 11-year bull rally emerged from its ruins becoming the longest-ever uptrend in Wall Street history.

And, the American economy is equally robust as consumer spending remains strong and as the unemployment rate (3.5%) remains at the lowest in 50 years. Despite low employment, Federal Fund interest rates still sit near historical lows and the 10-year Treasury yields only 1.8%.

Financial Crisis

Bringing back painful financial memories for investors, the financial crisis of 2008-2009 wreaked havoc on the stock market. During the crisis, the S&P 500 index (SPX) lost 38.5% of its value in 2008, making it the worst year since the nadir of the Great Recession in 1931.

Today, many economists and financial industry pundits conclude that global economies will face an increasingly uncertain and potentially volatile future. Those future concerns range a gambit of political, geopolitical, economic and socio-political issues.

The uncertainties and concerns include the upcoming U.S. presidential elections, potential turmoil in the Middle East, growing fear regarding cross border spread of the Novel Corona virus, and the growth concerns regarding the economies of the rest of the world economies.

Investing in an Uncertain Environment

“Never under estimate the man who over estimates himself…he may not be wrong all the time.” Charlie Munger

When it comes to investing in an uncertain environment, it is difficult to know what actions to take. But, nobody knows with certainty what is going to happen next in the markets or can predict the direction with certainty of the global economy. Despite the many self proclaimed stock picking experts who promote their ability to forecast the markets and abilities to select the next Amazon-like stock, it important to always remember that no one knows what will happen in or can accurately forecast the future.

Recently, Charlie Munger, Vice Chairman of Berkshire Hathaway, shared his thoughts about investing in general and regarding Elon Musk and Tesla, specifically. He commented that Elon is “peculiar and he may overestimate himself, but he may not be wrong all the time…”.

Additionally, Munger commented that he “…would never buy it [Tesla stock], and [he] would never sell it short.” Prudent investors would be wise to heed Munger’s advice and be concerned not only about potential rewards but, more importantly, also concerned about potential risks investing in hot, high flying stocks.

In Munger’s view, there exist too much “wretched excess” in the market and investors are taking on too much unnecessary risk. He worries that that there are dark clouds looming on the horizon. And, he believes markets and investors are ill-prepared to weather the coming market “trouble”.

References:

  1. https://www.marketwatch.com/story/wretched-excess-means-theres-lots-of-troubles-coming-warns-berkshire-hathaways-charlie-munger-2020-02-12

Big Bad Market Volatility

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“Using volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return.” Charlie Munger

Risk is a difficult concept for many investors to grasp. Risk in the minds of many investors is frequently defined as volatility, which is how much an investment returns might vary over time. And, what investors must embrace the fact that volatility is a natural and normal characteristic of equity markets. Nevertheless, because it is normal doesn’t always make volatile markets easier to accept.

Emotions can often play a big role in investing decisions, especially during down markets. In financial circles, volatility is a measurement of the fluctuations of the price of a security. It is essentially an analysis of the changes in the value of a security. It is one of the most key measures in quantifying investment risk.

Volatility is a temporary concept consisting of sometimes mild to wild short-term market fluctuations that passes with time. Most people see it as an excuse to act. Volatility of equities and equity markets are facts of life that will never go away. Since the end of WWII, the equity market has annually declined more than ten percent on average.

Furthermore, the equity market has declined at least 15% an average of once every three years. And it’s declined at least 20% an average of once every five years. It is safe to conclude that the future will not be much different, according to Nick Murray. He stresses that “the U.S. equity markets can be inherently volatile in the short term. This is the primary reason for investors to hold equities and invest for the long run.”

Stock returns generally follow corporate earnings over the long run. In the short run, though, stock prices can be decoupled from corporate earnings and the economic realities that exist at the time.

https://youtu.be/ZX7DZ-cJZ-I

Mr. Market

“The true investor welcomes volatility … a wildly fluctuating market means that irrationally low prices will periodically be attached to solid businesses.” Warren Buffett

In The Intelligent Investor (1949), its author, Benjamin Graham, introduced a hypothetical character called “Mr. Market”. He described “Mr. Market” as being “schizophrenic in the short run, but rational in the long run.” “Mr. Market” was also described as being “a voting machine, based on belief and emotion, in the short term and a weighing machine, based on facts and objectivity, in the long run.”

In general, investors prefer returns that are relatively predictable, and thus less volatile. In truth, stock market volatility is never fun and tends to make retail investors anxious. It may be tempting to stop the pain by getting out of the market. But don’t fall into the trap of trying to time the market. 

Remember market’s long-term returns are positive. Keep your eyes focused on the long term and remember that successful long-term investing requires having the discipline to stay invested through the inevitable ups and downs you will experience.

Volatile Markets

“Stocks take the stairs up and the elevator down.” Wall Street adage

Stock market volatility measures fluctuations in stock prices. A security with high volatility means that its price can fluctuate considerably over a very short period. In contrast, a low volatility means that the price of a security will not change dramatically in short periods of time.

In times of high equity market volatility, it is important to:

  • Stay focused on long-term financial goals
  • Ensure allocations are consistent with longer-term risk profile and rebalance portfolio periodically.
  • Make sound investment decisions based on informed, rational reactions to news headlines.

Keep in mind, if you have 20 – 40 years horizon to invest, a bear market is noise to a long-term investor and should be ignored.  In fact, it should be celebrated, since stocks will be on sell. On the other hand, a stock market crash that starts the day after you retire can cause a permanent lifestyle impact if all your money is invested.

When the market is chaotic and market volatility is in hyper-drive over the latest inverted yield curve that may or may not predict a recession, or other temporary headwinds, just remember that it doesn’t represent a threat to any long-term investor, as long as they remain calm and disciplined.

Markets don’t move in a linear fashion but instead move through periods of loss and gain. The gains an investor can realize over the long term — even through periods of market volatility — has been an investor greatest ally.

References:

  1. https://marketbusinessnews.com/financial-glossary/volatility/amp/
  2. The Intelligent Investor by Benjamin Graham (Rev. Edition, 2003).
  3. Ameriprise Market Insights – Market Volatility

Investment Strategy

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Great investors always have a clear strategy and adhere to it for years.

“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”   Sun Tzu

It is important that we learn from the great investors. More importantly, if you have a strategy that works… Stick to it.

But, remember that there are times when one style works best and times when another does.  So the take away is: Think flexibly but strategize rigidly. That is, decide which investment style is right for the present, and, once you have decided, stick with that style and the strategy that flows from it.  Adhere to what works until it stops working.

Most investors do not follow a financial plan or adhere to an investment strategy.  Instead, they collect stocks like a stamp collector collects stamps.  They buy what they like or buy what is in vogue. It may be growth stocks or value stocks or blue chips or small fry. When most investors find a stock they like better than the current collection, they trade for it.

“Forget trying to figure out the ideal moment to get in or out of the market. Instead, what really matters is the time spent sitting around in stocks.” John Goodell

You can see why people prefer collecting: It’s embedded in how our brains work from prehistoric times of hunting and gathering. Portfolio management, which goes far beyond diversifying by introducing risk controls. This is a discipline that operates under  rules:

  • Invest in companies that you both understand and believe will offer long-term value.  When buying ownership, you should be able to get your reasoning down on paper without relying on outside resources.   You should be able to write down exactly why you plan to invest in that particular company and ignore how the stock will perform in the near term.
  • Use a benchmark. Pick one carefully and manage against it. Morgan Stanley World  or S&P 500
  • Analyze your benchmark’s components. For each stock, think about expected return and risk. That way, you know what to own and how much of it. Think about countries, industries, size and valuation. What you don’t own is as important as what you do.
  • Know that you may be wrong. Believers in value investing think theirs is the only way to go. Growth investors feel the same about their philosophy. No style can be right always. Any strategy can fail.

Margin of Safety

“Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical.” Sun Tzu

Build insurance into your investments. In case you’re wrong. And that comes from blending negatively correlated items. In other words, seek something that would go up a lot should other things go down. Then, if your basic premise is incorrect, you don’t get killed. Making up for a decimated portfolio is hard to do. Remember, when you buy insurance, you don’t want it to pay off. You’ll be happy not to need it and just lose the premium. But the insurance really does reduce your risk.

What is the most common investor mistake? Trading–getting in and getting out at all the wrong times, for all the wrong reasons. You’ve heard it before: Most investors are their own worst enemies.

Most mutual fund buyers, for example, badly lag the very funds they buy (and sell) because of bad timing. The average mutual fund holding period for equity or fixed income is only about three years. It’s too short.

The solution is to trade less. Buy into good, well-researched companies and then wait. Let’s call it a sit-on-your-hands investment strategy

Short- vs Long-term Investing

A short term investment is any asset is held for one year or less. Most investors hold short term investments for no more than a few months at a time, if not several weeks.

A long term investment is any asset is held for more than one year. Most investors hold long term investments for several years as part of an overall strategy and financial plan for their portfolio.

Jobs, Coronavirus, and the Budget | First Trust Economics Blog

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Brian S. Wesbury, Chief Economist

Date: 2/10/2020

In January, US payrolls expanded by 225,000, not only beating the consensus forecast, but also forecasts from every single economics group.  Since January 2019 (12 months ago), both payrolls and civilian employment – an alternative measure of jobs that includes small-business start-ups – are up 2.1 million.  The labor force – those who are either working or looking for work – is up 1.5 million, while the jobless rate fell to 3.6% from the 4.0%.

The labor force participation rate (the share of adults who are either working or looking for work) increased to 63.4% in January, the highest reading since early 2013.  Participation among “prime-age” adults (25 to 54) hit 83.1%, the highest since the Lehman Brothers bankruptcy in 2008.   

Meanwhile initial claims for unemployment insurance hit 202,000 in the last week of January, and initial claims as a percent of all jobs are at the lowest level ever.  In other words, the job market and the economy look strong.

Only a few months ago, some analysts were saying that the inversion of the yield curve – with short-term interest rates above long-term rates – was signaling the front edge of a US recession.  Now a recession seems nowhere in sight.

Lately, financial markets have become very jumpy on any news – good or bad – regarding the coronavirus.  We aren’t immunologists (or doctors) and would never make light of a virus that has killed more than 900 and infected over 40,000, but data released by the World Health Organization (WHO) cautiously suggests a positive turning point has been reached.

— Read on www.ftportfolios.com/retail/blogs/economics/index.aspx

Solving the Financial Literacy Problem

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“A compelling body of evidence demonstrates a strong association between financial literacy and household well-being. Survey after survey shows that households that demonstrate low levels of financial literacy are those that tend not to plan for retirement, borrow at high interest rates, and acquire fewer assets.” Shawn Cole

Numerous reports show that a majority of American adults lack basic financial knowledge, behaviors, habits or skills to make good decisions about managing their money. Poor money management habits and a lack of financial literacy continue to be significant concerns for Americans and might pose a future a threat to the continued prosperity of America, since we cannot expect government to run huge fiscal deficits to provide essential needs of its citizens.

Additionally, it is one problem that has caused many Americans to be left behind despite ten years of economic expansion and a roaring bull stock market over that same timeframe. The economic good times have benefited high income and high net worth Americans; and it has led to an ever widening income gap, wealth gap and retirement gap within the United States.

Lack of Financial Literacy

“The number one problem in today’s generation and economy is the lack of financial literacy.” Alan Greenspan, Former Chairman, Federal Reserve

Forty-seven percent of college students surveyed said they do not feel prepared to manage their money. Managing money remains the most daunting challenge for college students for the fourth year in a row.

A recent survey, by financial firm AIG and education training company EVERFI of more than 25,000 college students, revealed that students struggle with even basic financial literacy about things like student loans, credit cards and investing.

When asked six personal finance questions, the survey revealed that more than one in 10 college students answered none of questions correctly, and another 20% got just one question right. Still, more than half got just two or fewer questions correct — even incorrectly answering simple questions about net worth and savings.

Furthermore, fewer than 1% of college students taking the test got them all right.

This survey reveals a widespread problem inside America. It reveals that there is a Financial literacy problem in America and one that we must solve.

This is a major issue because of the financial realities facing college students and all Americans. For example, according to Sallie US:SLM data revealed that 83% of college grads have a credit card, though only about six in 10 say they pay the balance on time and in full each month.

Not Taught in High School

“You can come from humble beginnings, live frugally, invest as much as you can, save 10% to 20% of your paycheck, invest in low-cost ETFs, and become a millionaire.’—Dan LaSalle, Olney Charter School’s assistant principal

Why the shortfall in financial literacy? The reason is because not many students in the U.S. learn about personal finance in school, regardless of the income-level where they live. According to the nonprofit Next Gen Personal Finance, only five states require high-school students to take a personal-finance class: Virginia, Alabama, Utah, Missouri and Tennessee.

In other states, personal finance classes are often offered as an elective. (https://www.marketwatch.com/story/how-one-high-school-is-teaching-hundreds-of-students-to-become-millionaires-2019-05-03). As a result, we have a nation where a vast majority do not understand or even the basics of smart money management habits and behaviors.

“The single biggest difference between financial success and financial failure is how well you manage your money. It’s simple: to master money, you must manage money.” T. Harv Eker, author Millionaire Mind

Financial Literacy is one solution

Financial literacy is about knowing how money is made, spent, and saved, as well as the skills and ability to use financial resources to make decisions. These decisions include how to generate, invest, spend, and save money.

This concept is applicable to both individuals and organizations. Individuals must be able to balance a checkbook, comprehend personal income taxes, and understand the concept of budgeting in order to make wise decisions with money. These skills are vitally important; yet, many individuals lack this basic knowledge and consequently are unable to meet their daily expenses.

References:

  1. https://everfi.com/insights/white-papers/2019-money-matters-report/
  2. https://www.marketwatch.com/story/solving-americas-financial-literacy-crisis-starts-with-teachers-not-laws-2019-11-19
  3. https://www.marketwatch.com/story/more-than-half-of-college-students-fail-this-6-question-money-quiz-would-you-2019-06-05
  4. https://www.marketwatch.com/story/how-one-high-school-is-teaching-hundreds-of-students-to-become-millionaires-2019-05-03

A Man is What He Thinks

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“A man is literally what he thinks.” James Allen

James Allen, a British philosophical author of ‘As a Man Thinketh’, wrote, “A man is literally what he thinks, his character being the complete sum of all his thoughts. As the plant springs from, so every act of a man springs from the hidden seeds of thought, and could not have appeared without them.”

The things you choose to focus on, your thoughts, determines how you perceive the world – and influences many of the experiences you have as a result. If you focus only on the negative things in your world, the world can seem like a terrible place and your mood and outlook may suffer.

“Every one of us is the sum total of our own thoughts. We are where we are because that is exactly where we really want or feel we deserve to be, whether we’ll admit it or not.” Earl Nightingale

But when you focus on the positive things in your world, you see that the world is actually full of faith, hope, love, and joy. There is kindness and beauty that inspires people to do incredible things.  Each man holds the key to their own perception and focus, good or bad. He also hold the key to everything that enters into his life. By working patiently and intelligently upon his thoughts and focus, he may remake his life, his behaviors and transform his circumstances. 

“You are today where your thoughts have brought you; you will be tomorrow where your thoughts take you.” James Allen

Thoughts of doubt and fear never accomplished anything, and never can. They always lead to failure. Purpose, energy, power to do, and all strong thoughts cease when doubt and fear creep in.

“He who has conquered doubt and fear has conquered failure.” James Allen

The will to do springs from the knowledge that we can do. Doubt and fear are the great enemies of faith and knowledge. The people who embrace readily doubt and fear, who refuses to slay them, hinder himself at every step.

Changing the Subconscious Mind

Daily affirmations are techniques you use to begin he process of improving your life. Affirmations are simply statements that describe a goal or thought in its already completed state. Positive affirmation helps eliminate negative and limiting beliefs.

Affirmations can transform an individual’s comfort zone from a limited one keeping them trapped in mediocrity to a more expanded one where anything is possible. It helps to replace your “I can’ts” with “I cans,” and your fears and doubts with confidence and aspirations.

Affirmations are reminders to your unconscious mind to stay focused on your goals and to come up with solutions to challenges and obstacles that might get in the way.

“These things we bring on ourselves through our habitual way of thinking,”

Daily affirmations are simple, positive statements declaring specific goals in their completed states. Affirmations also hold a key to creating the life of your dreams. Successful people have long known that using willpower alone to energize their success isn’t enough.

Let go of negative beliefs

It is important to let go of and not focus on negative thoughts and images. Instead, individuals should bombard their subconscious mind with new thoughts and images that are positive and stated in the present tense.

In closing, William James said: “The greatest discovery of my generation is that human beings can alter their lives by altering their attitudes of mind. We need only in cold blood act as if the thing in question were real, and it will become infallibly real by growing into such a connection with our life that it will become real. It will become so knit with habit and emotion that our interests in it will be those which characterize belief.”

James also said,

”If you only care enough for a result, you will almost certainly attain it. If you wish to be rich, you will be rich. If you wish to be learned, you will be learned. If you wish to be good, you will be good – only you must, then, really wish these things, and wish them exclusively, and not wish at the same time a hundred other incompatible things just as strongly.”

References:

  1. Allen, James, As a Man Thinketh: Original 1902 Edition
  2. http://www.jamesallenlibrary.com/authors/james-allen/as-a-man-thinketh
  3. https://www.jackcanfield.com/blog/practice-daily-affirmations/
  4. https://www.jackcanfield.com/blog/become-a-millionaire-never-too-late/