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Use The Envelope System To Stop Overspending
- Use a cash envelope system if cards feel unreal and you overspend.
- Fagan: allocate cash into labeled envelopes for food, going out, clothes; when an envelope is empty that category is done for the month.
Where Wealth Actually Lives For Most People
- Keep emergency and short-term savings in accessible accounts and invest the rest in diversified funds.
- Fagan: millionaires use retirement accounts, mutual funds and ETFs rather than holding huge sums in one bank account.
Invest In Diversified Funds Not Individual Stocks
- Prefer funds (ETFs/index funds) over individual stock picking for most investors.
- Fagan: diversified funds average ~7–7.5% long-term returns and avoid the high risk and poor track record of stock picking.