One thing that’s amazed me since starting this blog was the breadth of knowledge of the money blogging community, so, rather than keep all these new insights to myself, I thought I’d share some money bloggers’ insights with you all.
A key feature of many posts is about financial education and what people wish they knew earlier. Many want to stop others making the same mistakes they did and pass on the knowledge they have learnt to others. Lots of these tips are really straight forward and easy to follow, but could significantly improve your financial affairs.
Knowing this, about a month ago, I put out a Tweet to see if anyone was interested and Twitter worked its magic. Over 70 money bloggers got in touch wanting to share their wisdom. As a result, I decided to turn it into a monthly feature so you can benefit from these tips all year round!
Here is your first instalment. From geo arbitrage to credit cards, I hope the tips help you!
Emma at The All Round Investor
When I first started to look into personal finance, I was blown away. There were hundreds of books and articles, new terms and expressions and I had no way to learn about it all. Frankly, it was terrifying to be faced by all the information in the world. It felt inaccessible – atopic for old, rich men who were able to invest in the stock market and make huge gains. Oh, how wrong I was.
When I looked into personal finance further, I realised that there are plenty of ways to get into investing. With micro-investment companies like moneybox, I was able to dip my toes into investing without sacrificing huge sums of money. One of the most important things I learnt was that often, starting to invest matters more than where you invest.
With time, I moved my money around and started to invest with bigger sums. My confidence grew, and I started to make gains in the market. I realised that, when it comes to investing, the best way to learn is to take part. By tracking the changes to my investments, I began to understand how to make better decisions, and soon the stock market shifted. It was no longer a scary world for the rich, but a tool to grow my savings and prepare for the future. Starting to invest was the best decision I ever made – and you should try it too.
Saving money is not enough, you’ll have to invest it. I always thought that if I saved up a huge sum of money, I’d be able to have enough for retirement. However, I did not take inflation into account! The amount of money that I saved today would be worth less by the time I retire.
After setting up an emergency fund that you’re comfortable with, which is around 3-6 months of your monthly expenses, you should seriously consider investing the rest of your savings. You may be intimidated by the sheer number of stocks that are available on the market, which ones should you choose?
The safest way to start would be to invest in index funds. These funds track a certain index which is indicative of a certain market. This allows you to get the market returns without having to do much stock picking! Once you’ve got the hang of index funds, you may choose to invest in individual stocks which can generate much higher returns.
Having too much cash on hand isn’t good because it’ll eventually erode in value. Investing is definitely the way to go to ensure you have a sizeable sum once you retire!
I have learned a lot over this journey to FIRE (Financial Independence Retire Early). Yet I would have to say the one thing I have learned with the biggest impact would have been to figure out what you value and enjoy and spend based on that. If I had a time machine that is what I would tell my younger self to focus on and learn as fast as possible. I have learned that once we spend based on what we value our expenses drop dramatically.
That actually living a life full of enjoyment and value is not very expensive at all. I used to spend money not based on what I valued but what I was influenced by society, friends, family, and my environment to value. I would spend money on a fancy vehicle because that would give me validation from people that I was happy and successful. When in reality the joy would be short term and eventually, I would want a fancier vehicle. Now I spend based on what I value and my life is more fulfilling and meaningful.
I wish I would have known the importance of having an actual, written, budget. While I was responsible with my money, I didn’t want to be tied down to a specific budget. I could not have been more wrong. A budget is so freeing! I didn’t realize how freeing having a budget was. It allowed me to spend and save without second guessing my every decision.
It also cut down on the amount of time I spent worrying about my money and my future. There has been so much less stress since I made a budget- with room for me to spend and save. I wish I had known that earlier on. I would have saved myself so much stress and angst.
If I could go back to my early twenties I would advise myself against getting a credit card. They really are the worst form of easy credit as far as I’m concerned. If you’re not careful, interest piles on top of credit and your debt can last for years.
There are many more options available now which are far easier to manage and quicker to pay off.
I have been using PayPal credit for making large purchases. It’s flexible, and once you’ve paid your item off, the debt is gone. I also applied for finance when buying a musical item recently. The agreement was with Hitachi and again it’s reasonably flexible, it was a Buy Now Pay Later deal with a £30 fee upfront and no interest if paid off in a year.
The biggest thing that I wish I knew earlier was the power of geographic arbitrage. In simplest terms, geographic arbitrage is when you utilize the difference in prices between two locations.
One example of geographic arbitrage is when a company purchases products or goods in one location to sell at a mark up in a different location. The goods do not suddenly become more valuable in a new country, however, people are able and willing to pay more because they have a higher disposable income.
Anyone can take advantage of geographic arbitrage! I am currently living in Southeast Asia but I earn most of my money in US dollars through my blog, sales consulting, and freelance projects. As a result, I am actually able to have a much higher quality of life because my everyday necessities are much more affordable (rent, food, transportation, etc.)
Well there you have it, from investing to geo arbitrage and even credit cards. In their tips, the money bloggers cover a lot of the basics of personal finance. As mentioned earlier, this will be a monthly post, so there’ll be plenty more opportunities to learn from other personal finance bloggers. If you’d like to contribute to a future post please get in touch at firstname.lastname@example.org or find me on Twitter @Katie20Percent
If you found this post interesting, please like it and share across social media or send it to your friends. I’d also love to hear your thoughts and experiences, so please leave a comment! What’s the top financial tip you wish you knew earlier?