Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
IBM - Investing in AI Machine Intelligence Stocks - 25th May 19
Seasonal Dysfunction: Why Generations of Gold and Silver Investors Are Having Such Difficulty - 25th May 19
Employment - The Good and the Bad of Job Automation - 25th May 19
Gold Mining Mid-Tier Stocks Fundamentals - 25th May 19
Buy This Pick-and-Shovel 5G Stock Before It Takes Off - 25th May 19
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Here’s The Real Reason You Stress About Money

Personal_Finance / Debt & Loans Feb 20, 2019 - 05:17 PM GMT

By: Jared_Dillian

Personal_Finance

People get really stressed out about money.

Money makes people cry. Money causes people to lose sleep. Money causes marriages to hit the skids.

So how to not stress about money? Drink decaf? Yoga? Meditation? None of the above.

Having more money is not the solution either. Lots of times, more money causes more stress, not less.

In the sage words of The Notorious B.I.G., “Mo’ money, mo’ problems.” The people who stress about money with $10,000 in the bank would be stressed with $1,000,000 in the bank.


Let me dispel the myth that the source of money stress is “not having enough.”

Nobody stresses about the fact that they can’t afford the $300,000 house that they want. Or that they can’t afford a $1,200 pair of Rick Owens sneakers. Or a Lexus, or jewelry, or whatever.

People don’t stress about the fact that they have a lower standard of living than they might otherwise want. That isn’t the source of money stress at all.

People stress about the possibility that they might have zero.

And even then, it’s not like they’re worried about having zero. They’re worried about what other people will think of them when they have zero.

There are two primary sources of stress about money: debt and risk.

Debt

Debt causes stress in two ways.

People borrow too much—mortgages, car loans, etc. And then they have a big monthly nut.

All the free cash flow goes to paying debt. There is not much left over, and not much savings.

If you lose your job, the merry-go-round stops. You get hurt in a car accident, the merry-go-round stops.

People in this precarious situation are acutely aware of their precarious situation. It is stressful, knowing that it could all end at any moment.

The other way to stress about debt is that you go upside-down on it. Like when you owe more on your house than it is actually worth. And you will have to pay the bank to move.

That is a big source of stress. People feel trapped. They are trapped.

I know people in strong financial positions who were moved to tears over debt—and the fear that something might go wrong.

That is a pretty terrible way to live. Debt is the source of stress. So if you want to eliminate stress, eliminate debt!

It really is that simple.

If you are sick and tired of being sick and tired, here’s what you do. Instead of just passively paying the minimum on your debt every month, bring some austerity to your life. Set aside some cash and start hacking at the principal.

It will make you feel better, I assure you. It will make you feel like you are taking action on the problem.

And if you work at it, you will eventually be free of debt. More important, you will be free of any debt-induced stress.

The goal is not to get rich. The goal is to not feel stress!

Again, there are billionaires who stress about money—usually because of debt. If you have no money stress, then you are doing better than the billionaires.

Risk

The other source of money stress is risk. Often having too much of it.

If your portfolio lost 50% of its value, would it cause you stress?

It happened to me during the financial crisis. My net worth got cut in half. My LEH stock went down to zero. And I lost some money on other investments. It caused me stress.

I was still wealthy by most people’s standards. But it is a kick in the nuts when you get cut in half. It didn’t feel good.

I could do nothing about the LEH stock. But if I had a more conservative portfolio, I would have had less stress.

Take a look at your portfolio. Try to compute the chance that you will get cut in half. If you think this is even remotely possible, then it is time to take action to reduce risk.

This is the main reason I recommend the 35/65 portfolio. Not because it will provide you with any kind of amazing returns. Instead, it will allow you to sleep soundly at night.

If your portfolio is 100% stocks, you have too much risk.

If your portfolio is 80% stocks, you have too much risk.

If you’re speculating in crypto and cannabis, you might have too much risk.

Let me ask you a question: was there a moment you were worried during the recent 20% correction? Were you a tiny bit scared?

If the answer is yes, then you have too much risk.

My Goal Is to Be Happy

Believe it or not, I’m not in the money business. I’m in the happiness business.

If you make a lot of money, but you are miserable, it’s not a success. If you eliminate debt, and you minimize risk, you will be happy. That is all I care about.

Getting rich is great but is simply extra credit.

Grab Jared Dillian’s Exclusive Special Report, Investing in the Age of the Everything Bubble

As a Wall Street veteran and former Lehman Brothers head of ETF trading, Jared Dillian has traded through two bear markets.

Now, he’s staking his reputation on a call that a downturn is coming. And soon.

In this special report, you will learn how to properly position your portfolio for the coming bloodbath. Claim your FREE copy now.

By Jared Dillian

© 2019 Copyright Jared Dillian - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules