The Five Cures To Wealth 🧪💰
Quote Of The Week 🖋
“The shortcut is to stop looking for shortcuts." — Visualize Value
Have you ever been stuck in traffic and you take a shortcut thinking it will get you to your destination quicker but you just end up being stuck in an even worse position than where you started?
Most of us will do the excact same thing when trying to progress in other areas of our lives. We will look for the “shortcut” and not realise that every time we do, we’re often further away from achieveing our end goals.
There is no substitute for hard work, the quickest way to your destination is often in a straght line where you face and overcome obstacles compared to trying to avoid them via detours.
Stop looking for shortcuts and immerse yourself in the journey.
Market Overview 📉
It seems as if there is no love for the stock market at the minute with US stocks going through their longest weekly declines in a row (6 as it stands) in decades. The mid-week release that US inflation levels still stood at 8% in April probably didn’t help matters.
The cryptocurrency market was even more volatile, driven by the fact that one of the top 10 projects by market cap called LUNA and its corresponding sister coin UST, collectively valued at over $40bn, both collapsed and wiped out the holdings of many crypto investors.
This created a massive sell off in all cryptocurrencies as panic set in that other projects could also fail. Bitcoin was under $25k at one point with Ethereum touching as low as $1,633.
As reality set in that whilst this was a devcastating wealth destruction event in the crypto space, the likes of Bitcoin and Ethereum rose slighlty from their weekly lows as the market realised that they have been battle tested and are much more secure as an ecosystem than the hundreds of alternative coins. I will cover this in more detail in a seperate article on crypto over the next couple of weeks.
What does all this mean for your portfolio? I often got asked over the last few years “when’s the best time to invest?”. The best time to invest was ten years ago, the second best time is today.
No one has a crystal ball to know which directions the markets will go in the short term but a consistent action plan to invest* weekly / monthly is often the best route to building a strong portfolio over the long term.
*Start investing from as little as £10 at eToro, one of the easiest to use investment platforms.
The Five Cures To Wealth 🧪💰
The Richest Man in Babylon is one of the oldest books on getting your finances in order and building wealth. The book covers many topics using ancient Babylonian tales but what really stands out are its ‘Cures’ to building wealth.
Whilst each cure sounds simple, knowledge without application equals no progress. To apply that knowledge, each cure below has been linked to an ‘Action Plan’ with examples on how we can implement the lessons on a consistent basis.
Upon reflecitng on your money habits, are you applying a version of these cures? If not, the best time to start was yesterday. The second best time is today.
You are the only one responsible for your financial freedom.
Investing 101 🏦
I’ve been sharing key investment terms, background on cryptocurrencies and some of my largest investments in the newsletter.
BUDGETING IN SIX STEPS
Reduce your wants. Increase your savings and investments. If you perform this quick budgeting exercise you may be surprised with how much we unnecessarily spend on “wants”.
STEP 1: Print out / download last month’s bank / credit card statements.
STEP 2: Highlight every expense that was non-essential or a “want”.
STEP 3: Calculate the total amount spent on these items.
STEP 4: This month, reduce your “wants” by 50%.
STEP 5: You can increase your savings by 25%.
STEP 6: You can increase your investments* by 25%.
Cut down your non-essential spending and significantly increase contributions to your savings and investments to get ahead.
*Disclaimer: This is not investment advice and is purely for educational purposes. I am sharing investment ideas. Please do your own research before making investing decisions.
What I’m Reading 📖
Sticking with this week’s theme of not looking for shortcuts, The Present Bias: Why You Keep Sabotaging Your Future—And How to Stop is a great article on the wider topic.
The Present Bias is ingrained within almost all of us and is “the tendency to overvalue smaller rewards in the present at the expense of long-term goals.”
The article covers some actions that we can take to try and limit the effect of The Present Bias in our daily lives.
Did You Know? △
The Great Pyramid of Giza was built over 4,500 years ago and took 100,000 men over 20 years to build. It is the only one of the Seven Wonders of the Ancient World that is still standing today.
The monuments were built as tombs by Kings and Queens who wanted to ensure a smooth journey to the afterlife. The Great Pyramid was made up over over 2.3 million limestone blocks eaching weighing at least 2.5 tons.
What would they have cost to build today? According to the estimate in this video the total cost of build (including materials and labour) would be $1.2 Billion!
Question For You 💭
What shortcut are you trying to take right now where you will be better off taking the long road?
Thank You 😊
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What a great read! It would be good to learn different ways on how to split that investment across the different ETF’s/Stocks/Crypto.