Friday, September 7, 2007

My Financial Strategy

A few things about me…In my daily life, I typically don’t enjoy details. I tend to gloss over pretty quick. I like broader strokes and concepts. This is where I excel. I run my financial life much in the same way. Also, from the time I was very small I was a saver. I always asked my parents for singles because some how I thought it looked like more money. I’ve had a fidelity account since I was about 16 years old (thanks dad). I must admit I did have a Legg Mason account for 2 years but have since moved back to Fidelity. I enjoy listening and reading about single stocks but rarely act on any of this info. I dream of one day being a day trader of such but have enough of an understanding to know this takes a lot more time than some late night infomercials admit to. A key moment in my life was first reading about compounding interest. If I remember correctly I was in middle school. From a very young age I understood this concept of compounding interest and it has made all the difference.

So here is my strategy (1) starting early is one of my strategies. I’m saving as much as I can now so it will have the biggest impact on my life (and brokerage account) later. Also, (2) making up for my lack of Warren Buffet stock picking skills by sheer volume of money saved. I want to make up for my projected smaller rate of return by saving more money. I can control how much I save way more than I can control if a small cap stock will triple in the next 6 months. (3)Being disciplined. I am the king of delayed gratification. Discipline is on my side I must admit.

For most of the past 8 years I have decided how much I wanted to save first and then lived the rest of my life with what was left over. Most people do it the other way. I am merely going to try and use my strengths to my advantage in order to meet my goal.

Over the last two years, my wife and I have seen a huge increase in our net worth by using these three basic strategies. I hope you enjoy my posts and following me on my journey.

No comments: