Issue #1: Making $3K a Month? Good News, You’re Less Screwed Than 92% of the World!
Ease off the hamster wheel—chances are, you're already in a better financial situation than most of the world.
Read time: 3-4 minutes
Charts 2-Pack
FIRE, or Financial Independence, Retire Early, has recently gained a lot of attention. The core idea is to save and invest aggressively now so that later, you can live off your investments. Many people go all out, cutting back on expenses and sacrificing their present to reach that future freedom. But let's not forget that living happens right now, too.
If you feel like you're behind, here's something that might surprise you: to be wealthier than 92% of the world, you only need to earn $36,000 after tax. That's $3,000 a month in your pocket, and you're already ahead of most people. Only 16 countries have an average salary higher than that.
Now, let's talk about debt. Some of you might have some, others might not. But just to give you a sense of scale, the world has about $315 trillion in debt. With 8 billion people, that averages out to $39,375 per person. Of course, that's not the most precise way to measure it, but even if we cut it down by a third, it's still about $13,125 per person. So, if you're debt-free and earning more than $3,000 a month, you're already doing well. If not, don't worry. You can reach that milestone—I believe in you!
Knowledge 2-Pack
Don't Rush Into IPOs: Today, investing has never been easier, and news about the next big opportunity spreads instantly. With this ease, it's tempting to jump into IPOs, hoping for an "Instant Profit Opportunity." But as Jeremy J. Siegel pointed out in Stocks for the Long Run, after studying nearly 9,000 IPOs from 1968 to 2001, most IPOs are anything but that. Instead, "It's Probably Overpriced." Many underperform, whether bought at the offer price or after the first month of trading. This doesn't mean you should ignore IPOs altogether, but it's smarter to wait, check the company's fundamentals, and avoid rushing headfirst into what might just be a bad deal.
Transfer Between Exchanges with $XLM: Don't withdraw fiat from an exchange to your card and send it to another exchange. You might not notice the fees right away, but believe me, over time, especially if you're doing this often, they add up and can take a big chunk out of your funds by the end of the year. To avoid this, simply buy $XLM on Exchange 1, transfer it to Exchange 2, sell it there, and then use the funds however you need. It's faster and cheaper.
Life Hacks 2-Pack
As you near the end of your car loan, continue making the same payments. Direct those payments into a separate account. This account becomes a safety net for unexpected car repairs. If repairs don't occur, the balance grows, helping you buy your next vehicle outright or cover a large down payment.
Don't buy cheap things just because they're cheap. Buy good quality, but that doesn't always mean expensive. You can get cheap items that are good or bad, and expensive items that are good or bad. I won't need to explain this much, as Terry Pratchett already did it perfectly in his Men at Arms book.
The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.
Thank you so much for taking the time to read through the first edition of the newsletter. I hope you found the insights useful.
See you next Thursday!
Thumbnail source: Lighter Capital
Nicely written