Financial Stewardship: Thoughts on a Healthy Relationship with Money

A weekend conversation a few weeks back on the trading floor with @PaperhandsJB and @SuckyMayor has been hanging in my mind. The discussion was around the importance of having made strong financial decisions like emergency savings and tax advantaged retirement contributions before funding your trading account. What has stuck with me is how hungry some of our community seemed for this information and it has been nagging at me to provide some ideas and experience on how to have a healthy relationship with money. These are observations of the world as I see it, through my lens, and from my perspective. Take what works for you, leave behind what does not. I hope it helps a few develop a more fulfilling and productive relationship to money.

Most importantly, you are simply a steward of money. You do not own it. You did not create it. You do not deserve it. You may have it for a time, but you will not leave with it. Your responsibility is to preserve it, to grow it, and to do good with it.

What good looks like will be different for each of us. Perhaps you will start a company, build a school, buy land for generations to enjoy, or maybe fill a garage with Aston Martins. The exact nature of the good is not the point, and what you define as good need not and often will not be relevant to others. What is critical is that you know what is important to you and that you commit to advancing it. Focus, effort, and enthusiasm are the tools and the currency. Money is just an outward mechanism to express what you value.

What does all this actually mean? Give first, save second, spend third. It is unhealthy to hoard. You will never value your work if you can’t give away the fruits of it. You will never sustain your intensity if you don’t spend and have big experiences. Share, Save, Spend. It will not work without all three.

  • Save and Spend and you will be unfulfilled.
  • Share and Spend and you will be insecure.
  • Share and Save and you will be exhausted.

Share for fulfillment, Save for security, Spend for excitement.

How can someone set up a system or a process for all of this? There are many different and effective ways to put this into practice. The simplest way to start in my experience is the 10/50/40. This works well as a starting point because you don’t have to make major changes to your income or your lifestyle to get started. Each time you have access to money that is not a part of your normal income GIVE 10% away, SAVE 50%, and SPEND 40%. This could be overtime money, commissions, or a year-end bonus. Most relevant to this community, perhaps it is your trading gains. As you become comfortable with this and as your income advances you will reach a point where you are able to apply this simple equation to your total income. Giving 10%, Saving 50%, Spending 40%.

These ideas seem impossible today, especially if you are spending 100% of your income. Trust me, I get it. Consider that you will never give 10% if you do not first give 1%, you will never save 50% if you do not first save 5%. Start somewhere. The easiest place to start is with the unexpected income. The extra dollars that come your way. Get comfortable with it and then expand it slowly over time to your normal income.

I sincerely hope that these observations and thoughts are helpful. If you have questions, comments, or ideas please offer them. This is an incredible community and from what I can tell it exists to build each other up.

Let’s make money.
Let’s be incredible stewards of it.

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Great advice. It’s always good to start with a financial goal as well. I personally wanted a home, no debit and to be to have enough in savings to not have to worry if things go really bad. It was a big hill to climb but I got my 60k student loans paid, cars paid, my 163k mortgage down to under 30k in under 10 years while building savings up enough to not worry. I don’t have a high paying job so I’m sure if you plan well, have some discipline and stay focused anyone can do it. I started building savings first using cash back credit cards and high interest savings accounts. Once I hit my target for savings, I looked at my debit and started paying of the one that would save the most interest first. Turns out I would get 40% savings buy paying extra on mortgage first. Hell of a return. Once the return got down to 6%. I turned to student loans and snowballed them. Next was cars also using the snowball method. Took time but my total savings on interest is well over 100k. Now I have extra money to play in the market. Hope any of this helped and if anyone wants to know anymore holla

Man that is incredible… congratulations on having all of those liabilities paid off, that is really inspirational! Did you utilize some of the Dave Ramsey methodology? I noticed you used the term snowball which is why I was curious.