The statistics held up!
If you didn’t have a chance to read last month’s blog, analysts predicted that the market had a 60% chance of going up in October and statistically speaking, 60% means that a thing is “very likely” to happen. I recently read about something else that is “likely” to happen as you and I continue on our wealth-building journey. After, I’ll let you see where the old net worth landed on the last day of October.
I was once called Pollyanna by a grumpy older woman. Perhaps I do like to dwell on all the good. I am certainly guilty of that on this blog, as it pertains to money. I only discuss and consider the good that can come to you and your loved ones from building wealth. I harp on why it’s so important to keep building until you reach the point where work becomes optional and your family, friends and community are all benefiting and learning from what you accomplished.
So today, I thought we might take a short walk on the dark side of money and wealth and what we should be aware of as our net worth grows.
Accumulating Wealth Has a Dark Side
Did you know that wealth and compassion are like oil and water? The more wealth you have, the less empathetic and compassionate a person tends to be. Studies have shown that low-income individuals are better at reading and interpreting the facial expressions of others and being able to do so is an important marker of empathy and compassion. People of lower economic status are not just better, they are way better at it than the wealthy, who simply tend to not notice much of anything at all about other people.
Author, Ralph Ellison speaks directly to this phenomenon in his best-selling book Invisible Man. He writes: “I am invisible, understand, simply because people refuse to see me.” Ellison wrote about being ignored and how the social and economic structure contributes to him being rendered invisible.
The mere thought of money clouds your judgement
A study done by researchers from Harvard and the University of Utah found that participants in the study were more likely to lie or behave immorally after being exposed to money-related words. You’ve played Monopoly with your friends and family. That obnoxious behavior that grows like a green mist as the game goes on is not your imagination. Studies show that even “fake” money can make people behave less kind toward others.
According to UC Berkeley: When two students played monopoly, one having been given a great deal more Monopoly money than the other, the wealthier player expressed initial discomfort, but then went on to act aggressively, taking up more space and moving his pieces more loudly, and even taunting the player with less money.
I’ve seen this behavior before and if you haven’t, maybe you’re the one perpetuating that behavior. All jokes aside, now that we know money has the innate ability to change the way we think and behave…sometimes for the worse. Let’s stay vigilant.
Time for the net worth update:
Cash Accounts
Checking $ 500.00 (no change)
Savings $ 6,153.00 (+$248)
Business $ 34,446.00 (-$1,054)
MM/E Fund $ 34,001.00 (+$1,057)
Taxable Investment Accounts
Ally Brokerage $ 44, 217.00 (+$3,617)
Investing MM $ 100.00 (+$100)
Vanguard $ 6,078.00 (+$578)
Acorns $ 2,875.00 (+$110)
Tax Advantage/Retirement
SEP IRA $18,517.00 (+917)
Bonds $ 22,405.00 (+$248)
Traditional IRA $ 53,334.00 (+$1,584)
$222,626.00
Liabilities: Credit Cards: $0.00
October was a great month for the market. I also kept a promise to myself and moved $2,000 from my cash into equities. I’ll continue to purge myself of cash for the next couple of months. I had no major expenses this month and I didn’t go over my imaginary spending limit. If you’re new to this blog, I don’t have a budget. Psychologically, I would be annoyed by the self-imposed restriction.
I’m very reasonable in regards to my wants, so If I want it, I buy it. Not having a budget has worked for me. But I know plenty of people that thrive with a budget. You have to decide what works best for you. I get more joy out of investing than buying things and it’s the exact opposite for many others. The goal is to grow your net worth and it doesn’t matter how you arrive there.
- Credit Card: October was a very thrifty month. It wasn’t intentional but I cooked at home all month. It was also a very busy month work wise with no time to talk myself into needing something.
- Checking: I still haven’t turned in an old August invoice and I’m really annoyed with myself. I’ll definitely get around to it in November.
- Savings (P to P): I paid myself back the $150. I swear I love borrowing money from myself that never gets old.
- Traditional IRA: Still need to take the time to transfer money and max out this account before year end.
- Business Account: Slowly drawing this account down and buying assets.
- The E/Fund: This account continues to grow undisturbed. I hope we get an interest rate hike soon.
- Ally (taxable) brokerage: This account hit $45K briefly but a late market dip pulled it down. Looking forward to the $50 milestone.
Remember, it is a fight to build wealth no matter where you are in the process. Everything around us conspires to take money out of our hands. But you must fight the good fight. Continue to save, invest, and grow your net worth even when it seems impossible. Save your pennies (copper) until they become dollars (cotton).
