Unlock Your Financial Glow-Up: Top 5 Time-Tested Investment Rules for Success

Hey there, Wellthi Fam :sparkling_heart:

Rise and shine, because, we’re about to work, work, work, work, work, but in the financial realm, channeling some Warren Buffet vibes. This week, we’re rolling out the red carpet for our top 5 investment rules.

  • Stay In Your Lane – You don’t have to outsmart the Wall Street pros. Just be consistent with your savings and let the magic of compound interest work its wonders. The key is discipline, not genius. Check out the magic here.
  • Secure Your Bag – Always be ready for unexpected surprises. Have an emergency fund to cover 3-6 months of living expenses because life loves throwing diva moments! Calculate your safety net.
  • Don’t Risk It All – You know the saying about eggs and baskets? It applies to your investments too. Diversify your portfolio to balance out the risk. Mix it up with stocks, bonds, real estate, and more. Learn how to diversify like a pro.
  • Patience Is More Than A Virtue – It’s a goldmine! In Buffet’s words, “The stock market is a device for transferring money from the impatient to the patient.” Play the long game, and watch your wealth grow. Why long-term investing works.
  • No Room For Drama – Leave emotional decisions to reality TV. Keep your cool and stay focused on your goals, no matter what the market chatter. Here’s how to keep those emotions in check.

Ready to shine bright like a diamond? Your financial glow-up is just around the corner. Let’s slay it, one savvy investment at a time.

Stay Fab, Stay Focused,

Wellthi :green_heart:

Did you know? By creating goals and sharing them in public with your friends and family, you’ll increase your chances of success! You can download the Wellthi app here, if you act by July 3, you could win $10,000 for just posting your financial goal in the app!

Go Deeper

  1. The Power of Compound Interest
    • Article: “The Role of Compound Interest In Building Wealth”
    • Link: Linked In
    • Explanation: This article goes into detail about compound interest, which is mentioned as the “magic” in the Wellthi article. It provides an in-depth understanding of how compound interest works and how it can be used to build wealth over time.
  2. Creating an Emergency Fund
    • Article: “How to Build an Emergency Fund”
    • Link: Investopedia
    • Explanation: The Wellthi article mentions the importance of having an emergency fund. This article by Investopedia provides a guide on building an emergency fund, explaining its importance and providing strategies for saving.
  3. Diversifying Investments
    • Article: “The Importance of Diversification”
    • Link: Investopedia
    • Explanation: The third investment rule in the Wellthi article talks about diversification. This article from Forbes gives insights into why diversification is vital and how it can help in minimizing risks.
  4. Managing Investment Emotions
    • Article: “How to Keep Your Emotions Out of Investment Decisions”
    • Link: Co-Operators
    • Explanation: The last investment rule in the Wellthi article talks about not letting emotions dictate investment decisions. This article by Co-Operators offers advice on how to keep emotions in check and make objective investment decisions.

Breaking Up with the Market: How the 60:40 Portfolio is like Your Most Reliable Ex

Are you ready for a dive into the deep end of the finance pool? Hold onto your pool noodles, because we’re about to splash around the concept of “regression to the mean” like it’s a Marco Polo game on a hot summer day.

Picture this: the 60:40 portfolio is like that old reliable friend you always went to parties with in college. They were usually a good time (consistent returns), but last year they had a major party foul (a 23.4% loss). They tripped over the keg, spilled their drink all over the host, and broke a priceless family heirloom (if those happened to be represented by the Vanguard Total Stock Market ETF and the Vanguard Long-Term Treasury ETF, of course). Not their finest hour, and certainly not their norm.

But hold the phone, because 2023 is turning out to be quite the comeback tour for our friend. As of the end of May, they’re turning heads and impressing the crowd with a stellar annualized pace of 17.6% – a major glow-up from their historic average return of 7.7% since 1793. It’s like they aced their mid-terms after weeks of partying. Impressive, right?

Increase the odds: By creating goals and sharing them in public with your friends and family, you’ll increase your chances of success! You can download the Wellthi app here, and act by July 3, you could win $10,000 for just posting your financial goal in the app!

Now, before you start thinking they’re the life of every party, remember this: ‘Regression to the mean’ is as relentless as your mom asking when you’re going to settle down and get married. It basically means that over time, super impressive performance is likely to settle back down to average – kind of like how all-nighters become less appealing once you’re out of college.

So, while our friend the 60:40 portfolio is hitting it out of the park this year, that doesn’t mean it’ll keep this pace up. Heck, it might even lose a bit of steam next year.

Remember, the 60:40 portfolio isn’t some slick player you’re trying to time for maximum gain. It’s more like that long-term, steady relationship where the attraction doesn’t burn bright and extinguish fast, but instead, lasts over the years. Just look at its trailing 20-year annualized return – it’s practically snuggled up with its two-century average of 7.7%.

So, should you be excited about the 60:40’s recent glow-up? Sure, it’s great news for now! But always remember, investing isn’t a sprint; it’s a marathon (or a very, very long Netflix binge). The market might be a rollercoaster of ups and downs, but your plans should be more ‘chill on the couch with a good book’. And if you’re ever in doubt, we’re here to help guide you through it.

Until next time, keep your financial chill, Wellthi fam.

You can download the Wellthi app here, and act by July 3, you could win $10,000 for just posting your financial goal in the app!