How would you like to declutter your surroundings and build wealth all at the same time? Presently, as I progress into 2023, I have an overwhelming urge to declutter and simplify my life. Basically, I believe organizing our life and finances does something crucial. It opens up doors to new possibilities. So here are a few ways you can begin decluttering right now:
1. Reduce the number of Platforms and Accounts
As a personal finance and investment writer, Jerry and I are regularly testing out new platforms for building wealth and saving more money. As a result, I realized I have too many accounts with money spread all over the place. Consequently, it is time to close out some accounts and consolidate assets in fewer places.
2. Sell Some Stock
Declutter your Finances to Build Wealth! I believe most assets should be passively managed in index funds that capture a broad swath of the market. The reason is simple, it is extremely hard, if not impossible, to pick all the right stock market winners. Consequently, owning a Vanguard mutual fund that has exposure to large and mid-sized strong companies is a great way to achieve long term gains, especially if the dividends are reinvested.
3. KISS – Keep it Simple, Silly
Over complicated investing can be tricky to manage in a successful manner. How many stocks do you own? How many mutual funds? Some wise investors believe a simple approach can yield the best results over time. Some successful investors swear by simple approaches with perhaps only a 3-5 index funds or ETFs. Because of this, one balanced fund I enjoy is the Vanguard Wellington fund. It offers broad exposure to high quality equity and bond markets. One could theoretically just invest in that fund and be pretty set for life.
4. Close out Some Credit Cards
Next, clear out that underutilized credit card that you opened up to get a discount. Pay it off and close it. Right now you may not be using memberships like Netflix, or the Gym–perhaps it is time to close it. Declutter finances to build wealth!
5. Pay off some Lingering Debt
Not to be forgotten: get debt levels down to a reasonable amount. What is reasonable? That is particular to each individual and their specific situation. Did you know that there is good and bad debt. I believe good debt is generally used to buy things that gain in value. A college degree can be good debt if the level is reasonable compared to the potential earnings. Conversely, bad debt is typically for consumer junk that decreases in value quickly like clothing, jewelry or luxury cars.
Lastly, I am going through paper files and shredding some of the needless forms and documents I have had stored away. Overall, this is very cathartic and liberating to reduce the paper files down to the essentials.
In the end, I came to realize not only the awesome power of decluttering and organizing our stuff, but also applying these principals to our financial affairs.