How to be Financially Responsible Without Constantly Thinking About Money & What Tools to Use When Investing

Personal Finance Doesn’t Need to be Difficult

My last newsletter discussed how important your finances can be to your life and how having poor finances can lead to a more stressful life. Today we are going to talk about how you can be financially responsible without selling your soul to the world of finance.

As JL Collins’ daughter said “Dad, I know money is important. I just don’t want to spend my life thinking about it.” most people don’t like thinking about money and that is okay. It is still very important to make sure to build strong financial habits though.

JL Collin is a popular finance author who wrote letters to his daughter about the importance of money and how to manage it. After his daughter reminded him that she does not want to think about money as much as he does he decided to write the book “The Simple Path to Wealth”. This is a simple book about personal finances and how to manage your money without spending your life thinking about it. I highly recommend checking it out.

Another famous finance author named Helaine Olen said all the most important lessons you need to know about finance can be summarized on an index card. He proved his point by writing the most important lessons of finance on just one index card.

If you remember nothing from my newsletter but the topics on this index card you would be much much more financially prepared than the majority of other people.

Financial Habits, Building a Strong Foundation

In order to get ahead of most people financially with spending as little time as possible thinking about money you need to build good financial habits.

One of the most important habits is also one of the hardest to commit to. The number one habit to financial well-being is putting a percentage of your paycheck aside for saving, investing, and paying down debts. This percentage should be 15-30 percent of your income.

The second you get your paycheck allocate 15-30 percent of your money towards saving, investing, or paying down debt. If you start doing this from an early age it will be a thousand times easier than if you try to start later on in life. Just make it a habit and forget you ever had that money in the first place.

The arguably, most important habit is to NEVER EVER go into consumer debt. If I were to tell someone how to make their life ten times harder in the shortest amount of time possible I would tell them to go into credit card debt or take out a personal loan to buy consumer goods.

This advice is life-saving. Avoiding consumer debt at all costs is the best way to make sure you stay financially stable and can meet all your financial goals and necessities throughout your life.

The last topic I want to touch on about financial habits is investing in index funds. If you want to spend as little time as possible thinking about money this habit is good news for you! Index funds are groups of stocks that fit a certain criteria, for example, the top 500 US companies are a common index fund called the S&P 500.

To invest in an index fund you can invest in an ETF that tracks the index fund of your choice. VOO is an ETF we have already discussed here because it tracks the S&P 500. VOO is a great choice for index fund investing. Another popular ETF that invests in index funds is SCHD, this ETF has a goal to provide dividend income rather than just growth like VOO.

Our next section will talk about popular tools and apps you can use to invest and study index funds as well as other investments.

Best tools for getting started with investing

As someone who has spent most of my life obsessed with investing I have naturally tried just about every tool out there you could imagine to find good investments.

There are two things you need when starting to invest. Something to invest in and something to invest on. You can invest on a lot of different brokerage apps such as Robin Hood or Webull. The broker you use does not matter a whole lot especially if you are just investing in ETFs and index funds. The Webull app and M1 Finance app are the two brokers I use and love. Webull is more fit for those wanting to be much more hands-on and actively manage their own account and assets while M1 Finance is much more tailored to those wanting to “set and forget” when it comes to investing. Both are great apps and easy to use.

You also need something to invest in. There are plenty of apps and websites that can help you figure out what are the best things to invest in. Most brokers have all the information you need to make good investment decisions built into them. Webull has some of the most advanced and useful information when it comes to brokerage apps and most of my research is just done with them. If you want to learn about investments online Yahoo Finance is a great place to get all the information you could need about an investment.

If you are looking for tools to invest in alternative assets such as real estate, private equity, or even private credit I would recommend Fundrise. I use Fundrise to diversify my portfolio and as far as alternative investments go it is my go-to app.

The world is full of investing tools and it can be complicated to sort through all the information out there. The more I have learned about investing the more I have learned it is best to stick with tried and true index fund ETFs like VOO and SCHD.

Important financial statistics

• Even experts who try to pick individual stocks lag behind the overall market over 90% of the time

• In the last 30 years, VOO has obtained a compound annual return of over 10%

• In the last 10 years, SCHD has obtained a compound annual return of over 11%

• About 60% of adult Americans own stock, so by owning stocks you are doing better financially than 40% of the country

• As of 2023 American households had a combined debt of over 17.5 trillion dollars. Remember not all debt is bad debt as long as it is not credit card debt.

Investing sites and tools

• Webull Best for more active investing

• M1 Finance Best for more passive investing

• Fundrise Best for buying alternative investments

• Yahoo Finance Best for economic news

• Finviz Best for stock analysis and screening

Disclaimer: Some links are affiliate links but only because they offer the program and you also get a bonus from using the link, I would still recommend the exact same apps and websites with or without an affiliate link and I use every single app and website on an almost day-to-day basis. Money I make from affiliates will go into making Student Economy better for everyone.