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How to Keep “Fun Money” From Derailing Your Investing Plan – Presented by Mark K. Lund, Financial Advisor in Utah

Dale Carnegie, one of the 20th century’s most recognized authorities on reaching your full potential, argued for the importance of enjoyment in life.

“People rarely succeed,” he wrote, “unless they have fun in what they are doing.”1

Even when you’re working toward a goal that requires discipline, such as saving for retirement, you must plan for ways to make it enjoyable. A plan that makes no allowance for fun, including money earmarked for that purpose, is very difficult to stick to over the long run.

Additionally, the whole purpose of a financial plan is to help make your money work for you so you can do the things you think are most important. Your money should serve you. Not the other way around.

But what if your idea of fun includes doing a little gambling? Or, equally as risky, dabbling in cryptocurrency, commodity speculation, or day trading?

Of course, you never want to play with more than you can afford to lose. But even with sensible limits, could there be any harm in risking a little money chasing the potential to get a quick return?

Morey Stettner, a personal finance columnist for MarketWatch, says yes. You might want to think twice about using your fun money for speculation. First of all, he points out, you should recognize that there’s a difference between spending money on something you enjoy and simply squandering it.2

Zachary Scott, a certified financial planner, told Stettner that when clients bring up the idea of a “fun money” account they want to use for risky bets like cryptocurrency, he recommends against it.

“My definition of fun money is money you literally use to have fun,” said Scott. “That means spending it on an experience like a vacation or a dinner out.”

In other words, you should treat your serious money seriously and your fun money intentionally.

One of the problems with playing at speculative investing is that it can change how you think about prudent investing for the long-term. When saving for retirement, the possibility of getting an emotional charge out of a short-term big win should not be part of the equation.

Your best chance for long-term success is when you commit to following your plan regardless of how you feel about gains or declines in the short-term.

Another drawback to using fun money for speculation is how it can affect your relationship with your advisor.

Stettner points out that investors who speculate for fun may not want their advisor to know about it. If they lose significant money through what amounts to gambling, it’s likely been done in direct opposition to their planner’s advice, which makes disclosing it doubly embarrassing.

Instead, the prudent investor will work with their trusted advisor to plan for, and fully fund, enjoyable experiences even as the investor is saving at a level that requires discipline. They realize that there is simply no amount of money that can satisfy an appetite for speculation, soothe the depression that comes with loss, or win back those losses from previous bad bets.

If you ever have any questions about your investments or retirement plans, please feel free to give me a call at 801-545-0696.

Mark Lund
Stonecreek Wealth Advisors, Inc.
11576 S State Street, Bldg. 1002
Draper, UT 84020


This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by Efficient Advisors, LLC (“EA’) for Mark Lund, Mark is a Financial Advisor in Utah. He is known as a Wealth Advisor, The 401k Advisor, Investor Coach, Financial Planner, Investment Advisor and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment management and retirement planning for individuals and 401k consulting for small businesses. Mark’s newsletter is called The Effective Investor Newsletter. Cities served in Utah are: Salt Lake City, Salt Lake County, Utah County, Park City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, American Fork City. The views expressed herein are exclusively those of Efficient Advisors, LLC (‘EA’), and are not meant as investment advice and are subject to change. All charts and graphs are presented for informational and analytical purposes only. No chart or graph is intended to be used as a guide to investing. EA portfolios may contain specific securities that have been mentioned herein. EA makes no claim as to the suitability of these securities. Past performance is not a guarantee of future performance. Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. All opinions expressed herein are subject to change without notice. This information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. You should note that security values may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk. These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.

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