Lately, the news has been filled by popular figures who have wavered in their loyalties. They vowed to follow and abide by a certain set of rules but in moments of personal weaknesses they saw something more attractive and placed their futures in jeopardy by pursuing the HOT new thing.
Financial planners tell their clients that they should formulate a road map or plan towards self-sufficiency and then stick by it no matter what. “Stay the course” is a common axiom. First, pay down debt. Next, save money. Then finally, invest. But sometimes there are things out there that just look so appetizing, so fleeting, that we lose our resolve and wander from the course.
Espousing debt relief
One of the first things that I knew I had to take care of was my debt. So I went and looked for a debt consolidation company to help me out. They managed to lower my interest rates significantly and I threw all my available money at reducing that total. Then I saw something in the corner of my eye.
Losing focus
I noticed that companies whose stocks I wanted to own were on sale. Actually everything was on sale and it got me to come into the store. I read the research and found out that the market has averaged about an 8 percent return over the years and it got me thinking. This percentage applied to normal years but how much growth can I expect if I bought stocks while they were on such deep discounts. Can I expect 10%? 15%? 20%? Actually since March, it has gone up closer to 50%.
If the APR on my debt is lower than the average percentage that I can get from the stock market, then doesn’t it make sense to move more of my funds towards the place where it earns me more money? So that is exactly what I did.
It’s hard to say goodbye
But now it is a completely different market. Everyone is nervous and the market is lacking a sustainable direction. My BRK-B has pretty much traded flat since last month and that is not earning me any money. So before buying another share, I thought about putting more money towards paying my debt again. If money I put in the market is barely making me 1% and my APR is way higher than that, then maybe I should put more of my funds towards the debt consolidation company.
Learning to play the game
It kind of comes down to being a player.
I noticed that investing earlier this year was going to make me money so I put my resources towards that. But now, paying down my debt looks very attractive compared to the temperamental market so I think I will put my funds back towards achieving that goal.
It is a must that you chart your course by the final goal but if you find a shortcut here and there, why not take them? As long as it gets you towards the destination, what is the harm?
(photo: 10209031@N08)
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