May the Fourth Be With You!
A long time ago, in a galaxy far, far away, Star Wars was born. Over the years, the movies have evolved into an "epic space opera" with a fan base that circles the globe. What makes the Star Wars franchise so exciting, fun, and timeless is not just the high-flying action, adventure, romance, and space odyssey mystery but also that viewers can relate to the characters. Even though events occur in a far-off galaxy between robots, aliens, and humans, the lessons they learn apply here on earth. So let's board the Millennium Falcon and travel to a distant galaxy where you can learn some Jedi money lessons to help you become a financial Jedi.
The Value of Patience
Yoda was a legendary Jedi Master with an uncanny connection to the Force. He was a sage, full of wisdom that he would share with his young apprentices. One characteristic he found essential for the young Jedi to embrace was patience: "Patience you must have, my young Padawan." [i]
In the world we live in today, we expect instant gratification, especially given the popularity and convenience of apps. However, when it comes to money growth, no magic app will instantly flood your bank account with money. When it comes to your finances, patience is a virtue. Taking the time to do the proper research, consulting a financial professional, and embracing a long-term investment strategy allows you to acquire the necessary knowledge and guidance to make sound decisions while understanding that growing wealth takes time.
Pay Your Debts
Han Solo found himself in debt to the underworld kingpin Jabba the Hutt. Hutt is infuriated that he still needs to be repaid and enlists the help of bounty hunters or galactic debt collectors to hunt down Han Solo. Solo is eventually captured by a bounty hunter and frozen in carbonite. He becomes a prisoner of Jabba the Hutt until he gets rescued by his friends. [ii]
Figure out which debts you have by reviewing your credit report. Determine the interest rates applied and if any are compounding. Credit companies, for example, will often compound interest, and if you don't pay your bill within the month, you get charged interest, and then the new amount is charged interest. One accelerated method of managing debt is using the debt avalanche method. You allocate enough money to make the minimum payments on the debts you owe and use the remaining money (more than your minimum payment) to put toward the debt with the highest interest rate.
You can also use what is called the debt snowball method. The snowball method was made popular by finance guru Dave Ramsey, where you pay off the smallest debts first and work your way up to the larger accounts. [iii] Getting rid of debt is critical for long-term wealth accumulation. Consulting a financial professional to help you determine which method is appropriate for you and your financial strategy is highly encouraged.
Do Your Research
During the Clone Wars, the Banking Clan aligned itself with the Separatists funding the wars while continuing to do business with the Separatists' enemies, the Republic. Corruption occurred in secrecy before finally being brought to light.
You should thoroughly research where your money is going and be aware of the effect of market volatility or some other unforeseen event on your finances. Before putting your money into a bank or with a broker, make sure you know who they are and that they are legitimate. It would help if you also considered researching investment instruments that interest you. Learn as much as possible, mainly how it has performed historically in different markets. This can be tedious with the amount of information available today, and determining what is valuable can be challenging. Consulting a financial professional is recommended when learning suitable investment practices to pursue long-term financial independence.
Do or Do Not. There is No Try
In the Empire Strikes Back, Luke struggles to move stones with his mind. Yoda explains to Luke that the stones are not moving because he isn't using his mind correctly. Yoda then tells Luke that moving stones is about mind over matter. When Luke agrees to try it, Yoda firmly states that you either "Do or do not. There is no try."
The message conveyed to Luke Skywalker was that when you commit to something, you put everything into it. You also have to be willing to unlearn what you thought was right and learn how to do it correctly.
A reoccurring theme throughout Star Wars is the willingness to learn from those with a more comprehensive knowledge base and experience. Characters on both sides received mentorship, from Yoda to Darth Sidious and many other masters of the Force.
Get the help you need, especially concerning financial matters. Reach out to a financial professional to help you battle any potential risks and obstacles the galaxy may throw as you start a new and exciting financial adventure.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by LPL Marketing Solutions
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