What I don't write about

There are two things I don’t discuss in depth: money saving tips (how to spend less) and stock picking (investment choices). It isn’t that I don’t know about these topics. On the contrary, I am very confident in my expertise.

The reason that I don’t discuss money saving tips is that it’s a function of your lifestyle. You know better than I do which expenses are reasonable and which could be reduced and you can take stock of your spending habits by reviewing what you’ve spent over the last three months. When I discussed this topic with friends, one of them said that she was sure she could spend less by bring a lunch instead of buying food in the cafeteria. The way she said it, though, made me think that it was something she wasn’t prepared to do. Instead of feeling guilty, recognise that it’s a lifestyle choice, perhaps spending more time with your children and less time in the kitchen.

In the above example, spending less money equates to spending more time. We all have a limited amount of time and I am convinced that the quality of my life is a function of  how I spend my time. In that perspective, it’s sometimes wise to spend more money.

Further, spending less up front may cost more later. As an example, buying an unreliable car will cost less now, but may become a burden as repair bills add up. It’s also worthwhile to consider quality over quantity. My wife has a few pairs of shoes that I would consider expensive, but which are extremely comfortable. I think she is smart to have a small number of great shoes rather than a large variety of shoes that are showy but cheap.

If you really need some help, give yourself a time limit (so you don’t spend all day) and search Google. What is there in your lifestyle that has the biggest impact on your monthly spending? You may write your answer in the comment area below.

The reason that I don’t discuss stock picking is that entire books have been written on the subject and there’s not just one right way. The important thing is to save and invest. How you invest is a matter of personal preference, and needs to match your style and philosophy in order to work as a long-term strategy. Further, if you don’t want to learn to invest, you can hire people to invest for you. If you’re going to do that, be sure to get referrals from people you trust. Then meet at least three potential partners before choosing the one you are most comfortable with.

If you prefer to invest yourself, I highly recommend the website of CXO Advisory. Start with the Investing Demons section for a synthesis of the information contained on the site.

What is your personality? Do you get excited about researching companies and stocks, interest rates and credit ratings, or would you rather delegate that drudgery to others? Please share with us in the comment section below.