Everyone has 2 jobs (whether they know it or not):
- Time management (people know this one)
- Finance management (people don't know this one)
Time management is what you do with your time. Most people know they need to manage their time. They try to find ways to be a little more productive. You probably spend a lot of time at work, some of it with your kids and spouse, some watching TV, some hiking, etc. This takes more than 40 hours/week because your job likely takes 40 hours/week by itself.
Finance management is what you do with your money. How you spend, save, borrow, and invest. It's a full-time job but most people don't spend 40 hours/week studying finance and investing. That's why most people live paycheck to paycheck. In America, being poor is (usually) not because of low wages, it's because schools don't teach finance. So people don't know they have to put 40 hours a week into personal finance and investing.
It wasn't always like this. Before 1971, the dollar was backed by gold. Gold has low inflation so it retains value over time. This allowed people in the 50s and 60s to simply save money and eventually work their way to retirement. They didn't need to study finance because their dollars didn't inflate very much.
But we live in a post-1971 world. The dollar is no longer backed by gold and the government recently printed trillions of dollars in response to covid-19. In short, the dollar is inflating at 10-15% per year, according to financial analyst James Mullarney. That means that in 6-9 years, you lose half of your money! That's crazy, right? How can anyone save for retirement if they lose half of their savings every 6 years? That's the reason that practically everyone is living paycheck to paycheck now.
That sounds bad. How do I avoid inflation?
You need to start studying finance. Read every finance book you can find. Start reading as soon as you get off work until you go to bed. Listen to finance podcasts. Sign up for finance newsletters.
You ultimately have 3 options:
- Work until you die.
- Find a way to earn in the top 5%: ~$200,000+ per year.
- Study finance 40 hours/week and invest.
Actually, there's a 4th option:
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