The Best Financial Plan

Both of my kids have reached an age where they are earning, saving, and investing for their future. Naturally, they’ve come to me for financial advice—specifically, the best strategy to grow wealth.

I’m not a financial or investment expert, so I can’t offer them any profound or specialized advice. However, I share with them what I’ve practiced unconsciously, a philosophy that I recently came across captured nicely by Morgan Housel in his second book, “Same As Ever”.

The best financial strategy is to save like a pessimist and invest like an optimist. It’s a simple concept: Maximize your savings. Expect that things might go wrong in the short term, so to protect your future, squeeze out whatever you can save today. Maximize savings does not mean you live like a hermit. Just avoid vanity purchases.

At the same time, recognize that in the long term, you’ll be learning new skills, gaining experience and advancing in your career-leading to higher earnings. This should give you the confidence to take some risks and invest your savings into straightforward, market-tracking ETFs.

We save and invest today to give ourselves the freedom to make choices in the future. By making wise financial decisions that allow you to build wealth, you gain control over how you can spend your time. That’s the end goal.