Hi Friendos,
This is the first weekend of Shocktober and my neighborhood is coming out hard with the Halloween decor!
With that in mind, I’m here to talk about three supposedly scary money things and what people should actually be scared of instead.
One: People don’t invest because they’re afraid of losing money in the stock market.
I promise you, if you invest in the stock market, it will go down! And…it will also go up. Over time, it will go up more because every day the people who work at all those publicly traded companies are putting effort into being successful at their jobs and having their companies thrive, and that is what leads to corporate profits and rising stock prices.
What is actually scary: Inflation and not having enough money later in life! If someone avoids investing in the stock market and sticks all their money in a savings account instead, the purchasing power of those dollars will surely dwindle over time. Their money will not enjoy the returns of the stock market and they risk not meeting their financial goals later in life. You must master your inner demons, brace yourself for the inevitable ups and downs of the stock market, and stay the course with investing. Pro tip: ignore nearly all financial media and limit yourself to checking investment account statements a few times a year. Quarterly is plenty.
If this is you, I challenge you to make a change this week and start making some stock market investments. I recommend a nice total stock market index fund or S&P 500 index fund.
Two: Some people ignore their bills and forego budgeting and expense tracking because they are scared to know their financial picture (total debt and/or actual spending).
What is actually scary: Spending money on interest payments (money that goes to other people) instead of keeping it for yourself (e.g., by saving and investing), staying in debt longer than you need to, and having no awareness of how you actually spend your money. If you don’t know where your money goes, how can you know if your spending is really consistent with what you want it to be? It can be very hard to pull together a financial picture when you suspect the results are not good, but most people feel a lot better when they get organized and make a financial plan.
If this is you, I suggest making a list of all the debts you have (outstanding balance and interest rate) and making a budget that includes extra debt payments. If you are debt-free but don’t know where your $ goes, I suggest tracking your expenses for at least couple months to bring intentionality to your spending.
Three: People fear dying and therefore avoid making a will, medical power of attorney, and health care power of attorney.
What is actually scary: people you love not knowing your wishes and living with decades of regret because they think they made the wrong decisions. Family bonds breaking because of fights over an estate. People you love having to grapple with a complete financial mess you left behind at their time of maximum grief from your passing. I promise that one day you will die…but! your chances of dying are unaffected by getting a will.
Happy Shocktober!
-Stephanie
p.s. This week is a perfect time to get your annual flu shot and COVID booster if you haven’t done that yet. The CDC estimates that during last year’s flu season, 21,000 people in the U.S. died from flu (that’s an average of 404 people per week if you divide by 52). The CDC estimates that during the week of September 7, 2024 (most recent reliable data), 1,120 people died from COVID. Many of these deaths are preventable if people get these shots– so do consider that your choice matters! We’re (still) in this together.
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