Affordable Freedom Newsletter – Issue #8

On Wealth Mindset Lately, I’ve had several people ask me about my definition of wealth. And I’ve also asked several people about their definition of wealth. This is such a healthy discussion to have often with people. At the end of the day, money is a tool to improve the quality of our lives. If we don’t have a clear vision of what a wealthy life looks like for us, it’s going to be very hard to ever feel like we are wealthy. My definition of wealth is simple. It’s a life where: 1) I have great relationships2) I have great experiences with those relationships3) I prioritize my health and family over work4) I get to be creative a lot It’s a life where I don’t worry about money. I focus on things that fill me with gratitude and motivation. By starting with my wellbeing first, I am able to be at my best. This means my value to others is higher. Which means I can monetize my value more easily. And eventually (as I’m learning from those that are further along than me), this will lead to having way more money than I need. And it’s something we can plan for, with mindfulness and intention. What does wealth look like to you? Feel free to reply back and share your thoughts. But at the very least, start asking yourself this question often. And watch how much wealthier you begin to feel.   On the Stock Market Random observation about the stock market: lately, we’ve seen opening moves being “faded.” When the stock market opens in the morning, there’s a thing called the “futures” market. There is an opening price for the major indices (like the S&P 500, Dow, and Nasdaq), based on this futures market. If it’s higher than the previous day close, the market is up at the open. If it’s lower than the previous day close, the market is down at the open. Lately, we’ve been seeing these moves reversed (faded) and — more often than not — finishing the day higher. To me, this indicates a strong stock market. There is a healthy amount of both buying and selling. And because human ingenuity and progress tends to pull us forward over time, this balance results in an upward trend. On days where news comes in better than anticipated, we often see a big move to the upside. On days where news comes in worse than anticipated, we often see a big move to the downside. Is it possible that we get a deep recession that is worse than expected? Sure it is. Is it probable? That’s a stretch because seemingly everyone in the world is anticipating one. And when every company in the S&P 500 is anticipating one, they are able to prepare for it by protecting their profit margins. And even if things do turn out worse than expected, the Fed’s target interest rate has gone from 0.00% – 0.25% all the way up to 5.00 – 5.25%. They now have plenty of room to cut interest rates in the event of a deep recession. There’s no guarantee that they will and there’s no guarantee that the future will turn out like the past. But cutting interest rates tends to be really good for the stock market. Stick to that long-term investment plan! It’s a great way to benefit from compounding investment returns that can be staggering over time.