There were a number of posts this past week that had some good common sense resolutions for the New Year. So when we see some smart people agreeing on certain topics it is worth noting. So here are five financial-related resolutions to contemplate…time is running out.
Read more books, and less junk, next year.
- Joshua Brown, “My goal is to drastically reduce the amount of blogs and publications I’m following on a daily basis and to spend a lot more time reading books. I think my knowledge base would be greatly improved by finding a more equitable balance between today’s news and the wisdom of the ages.” (The Reformed Broker)
- Shane Parrish, “So my plan for 2014 is to clean my mind a bit by consuming less internet and more books. In addition to that, I want to reflect more about what I don’t want to consume. More is not better.” (Farnam Street)
Track your returns.
- Tim Richards, “It’s a remarkable fact that most investors don’t know whether they’re making money or not. In fact, when research has looked at how well people do during bull markets it turns out that they perform much, much less well than the markets – but they don’t know it. The main reason for this abject performance is that they trade away their profits by attempting to time the markets when they’d simply be better off riding them.” (The Psy-Fi Blog)
- Barry Ritholtz, “Put 5 percent of your investable assets in a trading account. Track how well your trading does vs. what I described above. If after five years you have outperformed your real investments net of fees, taxes and all other expenses, you can pull an additional 15 to 20 percent into this account.” (Washington Post)
Automate your financial life.
- Dan Ariely, “Set up an automatic monthly transfer from your checking account into a savings account. This quick, onetime decision to transfer money will help you spend within your budget, while also helping your future financial security.” (Dan Ariely)
- Barry Ritholtz, “Move your banking online. Set up an auto-pay for your recurring monthly bills. Make other payments online. Make sure your bank’s online platform generate regular reports that you can share with your accountant. This will greatly simplify your life.” (Washington Post)
Know what you own.
- Alexandra Lebenthal, “Everyone has the responsibility to know what they are investing in.” (WSJ)
- Sallie Krawcheck, “The best financial advice I ever received was not to buy a financial product that you didn’t understand and not to buy it from a person who couldn’t explain it so that you could understand it.” (WSJ)
Get out of debt.
- Mark Cuban, “Pay off your debt first. Freedom from debt is worth more than any amount you can earn.”
- Barry Ritholtz, Refinance your debt. The Fed has announced the beginning of the end of quantitative easement, and the end of ZIRP (zero interest rate policy) is coming. In plain English, this means rates should “normalize” sooner rather than later. That means higher — and, in some cases, appreciably higher — credit costs. (Washington Post)
Here’s hoping these resolutions, and others, can help keep you on track to reaching your financial goals in the New Year.