For Jim Farrish, on Jim’s Notes, money management is about lifestyle not just trading or investing, so he suggests that instead of looking for shortcuts, get rich quick schemes, etc. to focus on those tried and true methods of education, apprenticeship, or mentoring.

One of my goals in launching Jim’s Notes more than ten years ago was to post a blog on money management…not just trading. I have strayed from that original objective over the years, but I am working on gaining more of a balance in my post. Why? Because money management is about lifestyle not just trading or investing. In fact, I am of the opinion that without good money management your lifestyle will suffer which impacts the success of your trading and investing. In other words, they all go together. This is now my 30th year of managing money professionally and the amazing part is how on the surface—or the sizzle, if you will—of money management continues to change, but the underlying principles remain the same. The problem as I see it…too much time spent on the sizzle and not enough time on the fundamental principles. I could spend the remainder of my days attempting to explain that, but too often it falls of deaf ears. But, that will not keep me from trying as those of you who read regularly can attest.

Having spent some down time over the last two weeks I had a chance to flip through all the books (and there are way more than I thought in my Kindle library), I noticed a common theme among the books of success stories of Steve Jobs, Bill Gates, Warren Buffet, Jeff Bezo, John Templeton, Mark Zuckerburg, etc. They built there wealth through investing in themselves and building great companies. While the theme among governments is to redistribute wealth, the ultra successful have created wealth for others and themselves. This concept should be taught in every high school in America. A college education is extremely valuable, but building a business and investing in yourself is the greatest opportunity we are all given. Having owned my own business for 29 years is proof enough for me. By far, my greatest investment ever.

What does that have to do with money management? Everything, really. We spend time researching, reading, charting, and analyzing companies and investment opportunities to make money…sometimes the best opportunities are in the stories behind the companies and those who lead them. All those mentioned above offered investors great opportunities if they were willing to focus on the story and opportunity within the companies as they were built. But, taking it one step further, the same is true of you and me. Investing in ourselves is the greatest ROI we can achieve. For example, if you want to learn how to invest money…spend the time learning how. Stop looking for the shortcuts, get rich quick scams, etc. Focus on the good old tried and true methods of…education, apprenticeship, or mentoring and then a master craftsman of investing. This will be different for everyone. We all have our own personalities, thus a minor in human psychology is advisable, but learning what we like, what we are good at, specializing in an investment world of generalities is key. Learn what interest you and perfect the craft of that specific area. You will be better at the craft of investing if you do.

NEXT PAGE: Why Today Is Different Than the Good Old Days

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If you don’t like the topic of money management, but feel it a necessary evil, stop right now, don’t even attempting to invest your money. If you do something you dislike or hate…you never do your best. Remember the psychology of investing is equally as important as investing itself. Over my career of working with individual clients there is one common theme…they hate the topic of money management and they don’t trust themselves to manage their money. I frequently tell them hiring me is not a solution, you are just looking for someone to blame if things go bad in the investment world. I don’t like being blamed for what others are unwilling to do themselves. Don’t hire someone else to manage your money if you don’t know enough to manage the process. This isn’t like hiring an auto mechanic to fix your car where your loss is limited to the repair cost. When you hand someone your life savings to manage…the stakes are much higher. Learn enough to manage the manager… very, very important.

In the good old days, people saved money in banks because they didn’t understand stocks, mutual funds, or bonds…thus, the infamous Certificate of Deposit. Truth be known, that is still a valid way for many…before you crucify me for such a comment, I like to quote Will Rogers, “I am more interested in the return of my principle than the return on my principle.” Saving money where you can sleep at night is perfectly logical and acceptable and any one who tells you different only wants to make money with your money and not accept the risk…you are the one accepting the risk they take…after all, it is your money they are investing. The clients I still work with professionally work in partnership with me to manage the money. They accept the risk of the strategies we implement and work together to achieve the objective as defined from the beginning. No surprises, no excuses, just hard work… together. If you are not willing to put the effort into the process…buy a CD at the bank, a government bond, or other asset that requires no management until the instrument matures…keep it simple enough to do and sleep at night. Hiring an investment guru isn’t always the answer. You will only end up disappointed and with less money when you panic and sell. Hiring someone still requires education on your behalf and I am not talking about the list of ten things to ask an adviser before you hire them.

What all this rambling is coming down to is the simple fact we need to educate ourselves about money management. That level of education is totally dependent on what you are attempting to achieve. For example; paying off your mortgage which is charging you 5% interest is a great investment, first for peace of mind, and second, it is a better rate of return than a 2.7% government bond and it provides you lifestyle without worry. I read the articles and listen to the argument to not pay off your home, but invest the money at greater rate return in stocks or other assets. What about the risk of that decision? Do we understand it? ROI isn’t only about return, it about peace of mind, risk management, and psychological management of myself. Money management is about lifestyle when it is all said and done. Learning how to give yourself the best lifestyle based on you goals, objectives, and needs with the least amount of risk, that is what investing is all about. For some, like myself, working for myself and investing in my business is what gave me the lifestyle that I wanted, that made it the best investment I could make and continue to make every day. I will stop rambling and leave it a this simple point…invest in what you know, invest in what you believe in, invest in the best opportunity to provide you the lifestyle you want now and in the future. After all, it’s your money, Manage it.

By Jim Farrish, Founder & CIO, Jim’s Notes