November is Financial Literacy Month and the theme is “Managing Your Money in a Changing World,” which to be frank, I find a bit laughable.
I say that because I think one of the most fundamental things you should know about finance is that it doesn’t change that much. Certainly not the basics.
Earn more than you spend. Automate your savings. Own a diversified portfolio of long-term assets. Protect yourself against life’s biggest risks. Plan for the future.
None of these things has changed in the past year, the past decade, or the past century. And they’re unlikely to change any time soon.
Now, the specifics, of course, do change over time. Tax rules. What accounts or policies or investments are available. Various financial product innovations.
But even then, the idea that everything has suddenly changed still feels overstated and a bit silly to me.
Like, many people have suddenly woke up to the fact that they should have a bank account that actually pays them interest each month, not 0.001%. But that was true ten years ago.
The shift from picking active mutual fund managers to passive index investing has been happening for years.
Even the rise of inflation and interest rates feels like a super new thing, but is in fact largely a return to decades gone by.
In general, if someone is trying to tell you the world has suddenly changed and you need to make drastic moves to keep up, they’re likely selling you something.
The world changes. Maybe some years more and some years less.
But by and large, it’s all just noise. A distraction from the boring financial basics, which are pretty much the same as they have been for decades.