I was rereading some of my posts the other day (the search for typos never ends), and I noticed a call to action I make consistently: educate yourself. After giving this a little more thought, I realize that’s no small thing to ask of my readers. After all, I consider myself very knowledgeable about finance, and I definitely didn’t gain these smarts overnight.
I want to give you the resources to get yourself educated, but I don’t just want to tell you which books to read and what podcasts to listen to (though I’ll do some of that anyway). I’m more interested in inspiring you to learn, and convincing you that financial know-how doesn’t require a four-year degree. If you can get an idea of how to gain more knowledge, as well as some direction as to what you can do with that knowledge, the world of money management becomes much more accessible.
If you’re reading these blogs regularly, you already have at least some interest in learning about money. Using the following tips, hopefully you can become even more dedicated in your quest for knowledge.
Is it just me, or are podcasts the biggest thing since sliced bread? I’m definitely a fan, but I’m a little surprised at how they’ve exploded in the last couple of years. People talk about what podcasts they listen to as much as the discuss movies and TV shows, so clearly this type of media is here to stay.
If you’re an avid podcast listener, it’ time to work some money management shows into your regular rotation. Some of the hesitation to learn about money comes from finding the time, and with information ready to flow through your earbuds morning, noon and night, audio shows are the solution to that scheduling issue. If you live the busy life of a modern adult, your freetime is a precious commodity, so it’s great when you can do your extracurricular learning while you drive to and from work.
The beauty of financial podcasts isn’t just the convenience of listening to them on your phone. There are a lot of general, historical truths about money, and yet the markets are always shifting and correcting and evolving. With so many podcasts covering so many aspects of finance, you can almost always find some recording that pertains to a recent and relevant topic. Learning about money isn’t fun when you have to sit through basics or try to decipher the monetary ramblings of some financial wizard; you’ll stay interested longer if you find a podcast that really jives with your current situation.
There’s also a subconscious element when it comes to learning about money, and taking in audible information helps with that. So many of the terms - bonus share, fiduciary, large cap funds - need to be heard multiple times and in various contexts before their meaning starts to resonate. That means you can benefit from listening to financial podcasts even when your attention is divided.
So what should you listen to? Take your pick! There are dozens of popular podcasts about money, so read some reviews, talk to friends and start listening. Here are a few to get you started:
And there are many, many more. If you don’t know where to start with financial podcasts, search “podcasts about money” and just pick one. If you find a show that’s not mentioned above and you think it’s fantastic, let me know!
A workout partner helps you get to the gym. A book club keeps you reading regularly. A learning-about-money buddy makes it way easier to learn about money.
It’s hard to educate in a vacuum. When you hear a new concept and don’t have someone to discuss it with, that information won’t necessarily get turned into knowledge. Think about all the things you studied in school that you no longer remember; unless you continue accessing that information and engaging that part of your brain, you can’t expect to retain what you’ve learned.
With another party who’s equally invested in learning about money management, you can double your efforts and feel more dedicated to the process. You and your friend can help each other translate the denser financial jargon, become more discerning, and make the education process a lot more enjoyable. To get more specific, here are some activities you can do right away.
Money-based book club, anyone? There are so many great books about money, it’s hard to pick a place to start. With the help of a friend, you can start in two places at once, plus you have a sounding board to bounce ideas off. You can learn about complementary subjects, like flipping houses and home loans, or read the same book at the same time so you can converse about it.
If you’re looking for a place to start, I think The Richest Man in Babylon is a great jumping off point. It’s easy to read and digest, very much to the point and still very informative. It gives context for a lot of the basics of money management and investing, and then you can start applying those ideas to your personal situation. There are a lot of other books that will take you more in depth, but The Richest Man in Babylon provides a good first read if you’re starting a book club for financial novices.
Clearly, this option only works if you feel comfortable talking about personal financial matters. For a lot of people, this might not be the right place to start. However, many of you could gain a lot from going over your expenses, earnings and savings with a close friend.
There are lots of things to learn when you and a friend get into the nitty gritty. You can get a better idea of how your IRA is performing after comparing it with someone else’s retirement account, or learn about a new insurance provider that can save you a couple hundred dollars a year. When you start asking questions and divulging financial secrets, you can learn new tricks without going through all the growing pains. You also get a chance to feel validated for the things you’re already doing well.
If you don’t feel comfortable handing over your paycheck and your account balances, you can still swap a bunch of useful information. Without getting personal, you can discuss interest rates, stock holdings, brokerage fees, and various other bits of information that can be informative but don’t require oversharing.
Once you recognize you can’t learn in a bubble, it’s really helpful to get an outside perspective on your financial situation. Lots of people use financial advisors for this very reason; they don’t want to embarrass themselves by talking money with a friend, so instead they pay for a stranger’s advice. If you have someone you feel comfortable talking with and don’t mind sharing personal information, you might be able to learn a lot about your money without spending anything on professional guidance.
Always dicey, but worth it when done the right way. I sympathize with anyone who doesn’t want to make the wrong investment. If you buy shares at the wrong time or choose a company that ends up being a dud, you’ve effectively thrown your money away, and that’s a rotten feeling. I’ve been there more than a few times myself, so don’t think this problem is uniquely your own.
With an investing partner, things seem a lot easier. First off, you share the financial burden so you don’t have to put as much of your own money on the line. Second, you share responsibility for making the investment, meaning you can split the blame if things don’t pan out. Third, and most importantly, you’ll force yourself to put a lot of thought into your investment, because you’ll both want to be on the same page before spending any money.
If you do this without a strategy, it will come back to bite you. I’ve invested in all sorts of things with friends and family members, and we always make sure to create a solid plan before diving in. You should draw up contracts, bring in a third-party mediator, take a blood oath, whatever you need to do so everyone stays honest and fair.
Assuming you both put the same amount of money on the line and your investment produces a return, this could be the beginning of your very own business. You might end up a millionaire with your own house-flipping show on HGTV within a few years. Should that happen, I only ask you bring me on set for a day or two - that would be thanks enough for starting you on the path to success.
There’s a right way and a wrong way to use the internet. The wrong way is most likely how you currently use Facebook and Twitter. The right way is whatever makes you productive.
It takes very little effort to sit down at your computer and look through hundreds of pictures of friends’ babies and pets. That’s a great way to spend 10 minutes, but it’s not a good use of two hours. It’s amazing how much time gets casually wasted on social media, and it’s because it’s so simple. It takes a lot of motivation to pick up a book that dissects the collapse of the housing market; it takes much less proactivity to open an app and mindlessly scroll for an hour.
Fortunately, there’s a way to use your internet habits constructively. Instead pf deleting Twitter from your phone, how about you connect with some of the greatest minds in every industry imaginable? You can have hoards of information delivered straight to your pocket, so the next time you decide to aimlessly look at your phone, you might actually gain something from it.
You can do the same with your mailing lists. I’m a passive subscriber to all sorts of mailings, most of which I never open. Sometimes I feel bad about getting these emails and not reading the content. After a while, that guilt builds up and then an email will roll in with a catchy subject and I’ll read a useful, interesting article. I didn’t have to work hard to find the information, it came straight to me. I can ignore the emails when I don’t have time and dive in when I see something I want to know more about.
Subscribe to blogs you like, find YouTube channels with helpful advice, get on mailing lists from all sorts of financial institutions. You can set your notifications so these services will either never bother you or bother you all the time, depending on how much prodding you need to read an article. And, if a subscription you never use makes you feel a tinge of guilt, all the better. Hopefully that feeling will motivate you to learn more and take some action.
You know the very best way to learn about money? After listening to people like myself drone on and on about all things financial, go out and do something. No amount of reading will teach you as much as the real life experience of trading stocks, investing in a business or taking charge of your retirement account. You’ll likely never feel ready to make these moves until you’ve already made them, so there’s no time like the present to take the plunge.
You have to start in your comfort zone, and you can’t invest blindly. With the help of a broker, you can start putting money into the markets and getting an idea of how the service fees work and what types of investments carry the most risk. Check out peer-to-peer lending sites and look into investing a small amount in someone’s business without taking part in the actual business development. Test the waters, become confidenct that you’re not going to drown, and then start wading toward the deep end.
Throughout all of this, from the beginning stages of learning about money through your future as an active investor, there will be failures. You will get bad information and make bad investments, and you have to know those days will come. If you take lost money as a sign you don’t know how to invest, you’re going to stunt your growth and hold yourself back from seeing real returns. Long story short, you have to maintain a sense of optimism about finance.
If you want to learn about money and don’t know where to start, there are plenty of easy, actionable steps you can take right now. Call a friend, start following someone smart on Twitter, download a short podcast, or head to Betterment and open an account. Any of these simple steps can get the ball rolling and you can get most of them done in a matter of seconds. As long as you put in some consistent effort, you won’t have any trouble gaining the financial knowledge you want.