I'm spending money. I have since the first time my parents let me buy something. There are days when I don't spend any, just because there are days when I don't leave the house. Even then, I accrue costs as I heat my house and such to maintain my life. Eventually those bills get paid.

 

Spending money isn't bad. Wasting money is bad.

 

I can't say that I don't waste money, but I'm sure that I waste less than most folks. There are some that don't waste a penny, but they may be so tight with their money that they waste time.

 

Spending time and money is a balancing act, and such acts are rarely in complete balance forever. As it tips out of balance, maybe I wasted some money trying to save some time and failed. Recently I bought a new battery for my laptop, got half off, and ended up with a unit that doesn't fit from a company that doesn't describe any return policy. Frequently I spend more time working on something rather than buying a simpler and quicker solution. Do you know how long it takes to split a sheet of plywood using only a hand saw?

 

Especially in tough economic times it can become easy to fear spending money, but spending money is part of life in our society. It isn't necessary, but spending nothing involves great skill and lots of time and effort. One measure of frugality isn't that money isn't spent, it is that money isn't wasted. For the rest of us, spending money, and even wasting some are natural events. Be conscious of where the money goes, but don't buy guilt every time a penny gets spent.

 

Investing is different. Whether it is stocks, real estate, or gold, the money buys something that supposedly holds a value, and that can even increase in value. Spending money on investments is more correctly a trade. One asset is traded for another. Some money may get spent in the process. Commissions and such aren't assets, but the thing of value should be more than worth the trading costs. But those are the distracting details. The day an investor buys an investment their net worth usually doesn't change much. They spent money, but they received something nearly equally valuable in return. A smart or lucky investor received something that is worth more than the money's worth.

 

Emotionally, it is valuable to be able to consider the money "spent" buying a stock as an irrecoverable expense. If the investor is comfortable with or without that money, then any upside is appreciated and almost any downside is still above their worst expectations. It is fortunate to be in such a position, but most of us would feel the pain of an investment that became worthless. That's why down days in the market can still feel dismal.

 

I say all of this because, as we pass through and come out of this financial crisis, I hear many people talk about spending money on stocks as if the money evaporates. It usually has just taken on a new form. A normal stock, bought one day, can be sold the next day for about the same price. If there's a profit, the only part taxed is the change in value, not the total amount. If there's a loss, that can help at tax time, but the loss may be smaller than the commission, though that is less likely now that commissions are so small.

 

Buying stocks is not irreversible. Stocks are not lifetime commitments. They can be tried on and put back, bought and sold, readily; as long as they are liquid enough. (Liquidity is another topic, but most stocks with market caps > $200 million, or prices > $10 are considered "liquid", i.e. easy to trade.)

 

Economic crises are fertile opportunities for fear. One way to get past the fear is to realize that investing decisions aren't forever, that money invested isn't necessarily wasted.

 

Occasionally I'll find myself perplexed about purchasing a particular stock. Rather than agonize about it, I am now more likely to buy a few shares and check in with my emotions and any new research after a few days. Research takes on a different feel when it involves a stock that I own. My average time for owning a stock is four years, but that average exists because there are times when I am in a stock for weeks instead of decades. My attachment to my stocks is more like velcro than superglue, and that eases my fears.

 

Fears still exists. I am human. But I don't fear spending money, and I know that investing is a variation of spending that is a trade which can enrich my portfolio and my life. Worrying about it all is a waste of time anyway.

 

In the meantime, I am going to spend some time skiing. I spent some money and bought a season's pass. Time to play!