3051: [Part 1] Stocks - Part XIX: How to Think about Money by JL Collins

Optimal Finance Daily - Financial Independence and Money Advice

Optimal Living Daily LLC

Investing, Business, Education, Self-improvement

4.4 • 1.3K Ratings

🗓️ 23 February 2025

⏱️ 11 minutes

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Summary

Discover all of the podcasts in our network, search for specific episodes, get the Optimal Living Daily workbook, and learn more at: OLDPodcast.com. Episode 3051: JL Collins breaks down the mindset shift needed to stop thinking about what money can buy and start focusing on what it can earn. By understanding opportunity cost and the power of compounding, you can make choices that lead to long-term prosperity rather than fleeting riches. Read along with the original article(s) here: https://jlcollinsnh.com/2013/06/14/stocks-part-ixx-how-to-think-about-money/ Quotes to ponder: “It’s not hard. Stop thinking about what your money can buy. Start thinking about what your money can earn. And what the money it earns can earn.” “You have probably heard of The Magic of Compounding. As your savings grow, you earn interest on a bigger and bigger pool of money.” “One of the beauties of being financially independent is that by definition you will have enough money so that the power of Compounding is greater than the Opportunity Cost of what you spend.” Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Race the rudder. Raise the sails. Raise the sales.
0:04.0	Captain, an unidentified chip approaching. Over.
0:07.0	Roger that. Wait. Is that an enterprise sales solution?
0:12.0	Reach sales professionals, not professional sailors.
0:16.0	With LinkedIn ads, you can target the right people by industry, job title, and more.
0:21.4	To get 100 pounds off your first campaign, go to LinkedIn.com slash lead to claim your credit.
0:26.7	That's LinkedIn.com slash lead. Terms and conditions apply.
0:31.0	This is Optimal Finance Daily.
0:33.7	Stocks, Part 19. How to Think About Money.
0:41.8	Part one. By J.L. Collins of J.L. Collins, N.H.com.
0:51.5	Level 1. It's not just about spending. Get yourself a nice, crisp, $100 bill, or 100 pounds, or 100 euros, or any of the bills pictured in this post. Now prop it up, or them,
0:57.2	up on a table in front of you, or in your imagination, and give some thought as to what it means to you.
1:04.1	For instance, you might think about what you could buy with it right now. A hundred dollars buys a very
1:10.1	nice dinner for two at a good restaurant.
1:12.5	A fancy pair of sneakers. A tank of gas for your big pick-em-up truck. A few bags of groceries.
1:19.5	Maybe a nice sweater. I don't know. I don't buy much stuff. So this is hard for me.
1:24.2	I did just buy a $119 L-L bean bed for my dog. It's going back. He won't sleep in it.
1:32.5	You might think, hmm, I can invest this money. The stock market returns somewhere between
1:37.2	8 to 12% a year on average. I could spend that each year and still always have my $100
1:42.9	earning more for me. Or you might think,
1:46.2	but inflation and market drops are a concern. Hmm, I'll invest my $100, but only spend
1:52.2	4% a year. Any extra earnings I'll reinvest so my $100 grows and the money it throws off
	...

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