It’s always strange to see billionaires offering personal financial advice. These people are so disconnected from the life of the average citizen that exercise can quickly become uncomfortable.
Last week, Amazon founder Jeff Bezos stepped into this delicate territory.
Bezos, one of the world’s richest men and the owner of a brand new US$500 million yacht, advised people not to buy big new things like a TV, fridge or car.
“If you’re thinking about buying a big screen TV, maybe delay your decision, save that money and see what happens,” he told CNN in an interview. A refrigerator, a new car, whatever… take a little risk out of it. Currently the economy is not looking good, things have slowed down and we are seeing layoffs in many sectors. »
It’s not every day that someone who made his fortune in retail recommends that people stop spending their money on retail.
Personally, I welcome Bezos’ advice. After all, stopping to spend $2,000 is the equivalent of finding $2,000 on the floor while walking down the street.
As I’ve said before, I hate debt with a passion usually reserved for phone scammers and bedbugs. When the unexpected happens, having cash on hand can be the difference between solving a problem quickly or going into debt.
I experienced this on a recent overseas trip when I had the brilliant idea to jump into the ocean without realizing that the electronic key to our rental car was in my jersey pocket.
Through this experience I am relieved of $888. My insurance company should normally cover this amount, but while waiting for the claim to be processed, I was able to resolve the issue in seconds without taking out a loan.
When we talk about saving and investing, we often have the impression that it is boring because we will only benefit from it later, for example, during retirement. But that is wrong. Having an emergency cushion gives us freedom from day 1 and that freedom follows us for the rest of our lives.
Costly and unpleasant contingencies arise. Sometimes the unexpected is more serious: a job loss, for example. Personal finance experts advise people to have an emergency cushion equal to three to six months of our expenses.
Many suggest to deposit this money in a bank account. Personally, I prefer to invest my emergency fund. If something goes wrong, I will sell part of my investment. It only takes me a few minutes.
Yes, I may have to sell them in the year they lose value. But the withdrawn amounts represent only a fraction of my assets and I am willing to take this risk; By definition, an emergency does not happen often.
The Chinese save an average of 50% of their income, and the Vietnamese 35%. They know that financial, medical or other surprises will eventually catch up with them, and they don’t want to suffer unnecessarily when it does.
In a world where debt is the norm, getting money quickly and without borrowing is practically a superpower. A superpower that can make the difference between Heroes and Zero as the economy slows down.
Last week I asked you if you were affected by the financial uncertainty and anxiety that is noticeable these days. Here are some of the responses received.
My spouse and I earn good wages in low-risk jobs […]. Despite everything, I see that my purchasing power is not what it used to be. I’ve never earned this much, but I was on the same salary as I was five years ago. Despite the discomfort of treading this water, I haven’t lost my good saving and investing habits, rain or shine even by cutting some expenses.
Corinne
The inflation we face in 2022 will force us to review our budget. We must be careful not to distribute our savings too quickly. The federal government has increased the Old Age Security Pension for those aged 75 and over. But even 65-year-old retirees need help.
yvon
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