Has someone just called you a personal finance nerd?
Don’t worry, I’m totally a self-proclaimed personal finance nerd too. Take it as a compliment!
Here are 7 signs that you’re a big personal finance nerd!
1. Financial News Isn’t Hocus-Pocus To You
You have just read in the newspaper (online of course) that interest rates are rising again. Other people quickly skip that article, deeming it boring – you don’t. While driving to work you’re then doing the mental math to calculate the impact of rising interest rates. What if my mortgage rate goes up 0.20%? What do I need to cut out to afford the rise without affecting my investments?
If you not only can read financial news, but also can’t let it go, you are a personal finance nerd!
2. Conversations About Rising Retirement Age Just Makes You Smile
When colleagues at the coffee machine complain about having to work until 68, you can’t help but smile. There’s no way on earth you’ll be working until 68. You’ll be financially free at 55, or 45, or 40!
We all know that those colleagues will be blaming the government, old people, young people, their neighbour. You’ll hear all about how years of retirement have been stolen from them, they are victims! Nothing they can do, right? What you won’t hear about are the BMWs, Rolex’s, expensive holidays and designer handbags. When you walk back to your desk you feel your phone buzzing in your pocket… It’s your e-banking app. Your salary has just landed in your bank. Without thinking you put 30-80% of it into your investment account and go back to work. You are definitely a personal finance nerd!
Ok, that’s a smug exageration, but it holds truth! I certainly don’t disagree that the ever changing retirement age is depressing. What the personal finance nerds have realised however is that fighting government regulation is relatively futile. The only person with the power to change your future is you.
You’ve accepted this and are working away, investing every bit of spare change you find.
3. It’s Not About the Money, It’s About the Freedom
We all know people that constantly complain about their jobs. The problem is, they’re stuck. They can’t leave for a job they’d like much more, but pays less. Their high mortgage payments and expensive lifestyle forces them to continue in their reasonably well paid, depressing job.
Financial independence isn’t a race to the largest bank balance. It’s a race towards personal freedom, independence and (hopefully) happiness. Your bank balance is just a necessary step towards this. It can create passive income, so that your mediocre job can become a distant memory.
Personal finance nerds understand that we’re not obsessed with money and material goods. We just value time above other commodities (as we think everyone should).
4. You Understand the Power of Compounding Interest
Einstein (allegedly) called this the 8th wonder of the world. Compounding interest, or interest that is earning interest is the secret weapon of the personal finance nerd. Say, you receive a 10% interest on a $100 investment. This year, you will receive $10. But next year, you will receive $11 (10% on $110). Your interest just started earning interest! But I don’t need to explain this to you, you’re a personal finance nerd!
Of course, saving is the most important part when you just start out. But us personal finance nerds appreciate the magic of our money starting to make money, without our involvement.
5. You Love Excel Spreadsheets
At work you’re the Spreadsheet Guy. At home you solve equations on everything. Taking holidays, buying a car, buying a coffee… Nothing escapes your analytical skills!
Most people hate maths, let alone Excel! For you, building spreadsheets is a breeze.
6. Don’t Look At Homes To Live In, You Look At Home To Invest In
You spend hours on real estate websites. Your partner does as well, but he/she falls in love with the first house they see. You don’t. You grab your calculator, find out the market rent, and do the mental math to calculate the approximate mortgage payments.
Then you decide, is this property worth investing in? Most aren’t, but maybe this one is. You runs the numbers… nope, can’t risk negative equity. On to the next house!
7. You’d Rather Have 2 Dollars Tomorrow Than 1 Today
A real personal finance nerd understands that money needs time to grow. You don’t need the money right now, so why be greedy when you can have more tomorrow? People that can delay gratification are more successful than others, and you are one of them!
8. You Are Wildly Enthusiastic About Finance
You could talk about it all day long! You have to catch yourself and change the subject when you see other people glaze over or start yawning. Remember, most people live pay check to pay check… they don’t want to hear about the world of investments and why they shouldn’t buy the new iPhone.
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