This is the time of year when we are bombarded by cliché personal finance advice, packaged in the form of helpful new year’s resolutions: start maxing out your 401k; commit to a budget; 2020 will be the year you are “finally” debt free.
However, readers don’t go to the Contrarian Saver for more of the same; they go (as the name implies) for personal financial advice that zigs where the others zag; that laughs in the face of conventional wisdom.
With these thoughts in mind, I have compiled a list of several contrarian moves for 2020 – advice that I doubt you’ll find in any other new year personal finance to-do lists:
- Buy something spectacularly expensive, but which will last forever (or nearly) forever; will maintain its value; and will save you money in the long run. In prior posts, I have recommended Prada shoes, but also do-able (and the subject of future posts): a slightly pre-owned Porsche 911; investment grade art; well made rugs; a solid (e.g. Rolex) watch.
- Take on debt: but make sure it’s super low interest, ideally replacing higher interest debt, or at least use the money to invest at a higher yield. 0% interest credit cards (which are effectively 2-3% annually with transaction fees) are a personal favorite, but student loans or HELOCs can also work.
- Abandon your dreams: take 2020 as the year that you will finally, deliberately put your dreams on hold – at least those that are financial dead ends that will move you hopelessly away from financial independence. Redouble your efforts to focus on wealth accumulation exclusively, even if it means delaying your life’s goal of becoming an artist, writer, social worker, astronaut, superhero, or any other fun-sounding but low paying vocation.
- Put off investing: I doubt many financial advice gurus are urging you to do this, and technically, neither am I. But: perhaps you should consider switching out your standard play of saving 25% (or 50% or more) of your salary and instead consider other less traditional forms of saving or investing. For example, real estate, your career, or your education. You won’t get the instant gratification of seeing your savings balances steadily increase month after month, but you may see substantially more significant gains in the long run.
- Embrace losses: or more specifically, embrace the long game. Investing is a long term play; fortune favors those who can roll with the punches and stay in the game, in the face of short term setbacks, losses, unexpected barriers, and all the other natural consequences of anything riskier than a CD. 2020 should be the year you embrace these elements as natural bumps in the investment road, vs. cause to re-evaluate (i.e., run and hide), evidence of your lack of business acumen, or any other such BS.
- Finally, do absolutely nothing: or more specifically, take a look at a financial move that is wasting your time and money (such as day trading, or even just trading more than once annually) and stop doing it. Show your dedication to doing the right thing by instead doing absolutely nothing, even if it means sitting in a dark room staring into the distance instead of said useless financial move.
What do all these suggestions have in common? Well, yes, they are contrarian, but also, in the long run, they will save you money, enhance your returns, and get you to FI faster and better. So go forth into the 20’s, roaring with contrarian moves that will free you financially in this new decade.
Are you committing to a “contrarian” move this year? Is it one of the above or one of your own? Tell me about it in the comments below.