3 Unique and Unusual Tips to be Financially Fit in 2015

Today is December 31st again. My daughter is repeating everything I say, I'm finding more gray hair and the wonderful holiday treats are making my pants tighter and tighter. It must be time to make some New Year's resolutions so we can get our lives back on track. Whenever you read articles on becoming financially fit, you read about budgets, planning, monitoring and other boring crap. Worry not, I won't mention any of these terms. I promise. So here are 3 unique and unusual tips to be financially fit in 2015!

1) Play Dead

I'm almost 100% certain that you've never heard that as an investment strategy before. Fidelity Investments has done a study as to which accounts had done the best at Fidelity. And what they found was that the best performing accounts were often “dead” accounts. No the owners weren't dead but they were the accounts of people who forgot they had an account completely.

Unfortunately the average investor is overly emotional and typically buys high and sells low. Needless to say this is a bad investment philosophy and the chart below from Rich Bernstein shows just how terrible you are at investing!

So what's the moral of the story? One choice is to hire an investment manager who will do better than you. The second choice leads us to our second point.

2) Tax Yourself

Before you stop reading which I'm sure the word tax makes you want to, just hear me out. We all hate paying taxes to Uncle Sam but we don't have a choice as they are automatically deducted from our paycheck. So here's the rub. You have to automatically transfer 5, 10 or 20% of your paycheck to an investment account every month. Have the investments automatically invest (or go to an investment advisor who will invest it for you) and then play dead. If you follow this strategy you too can be a multi-millionaire.

This brings us to the story of Mr. Theodore Johnson who started out as a driver for UPS and never made more than $14,000 a year in his life. He taxed himself to the tune of 20% and poured it back into UPS stock. By the time he was old and gray, his investment account totaled more than $70 million! So remember, it doesn't matter how much you earn, you too can become a millionaire if you play your cards right.

3) Buy Experiences, Not Products

You often hear that money can't buy happiness. However behavioral science begs to differ. Research shows that money can make us happier, but only if we spend it in particular ways. Author Michael Norton, an associate professor at Harvard Business School, describes it like this:

One of the most common things people do with their money is get stuff. But we have shown… in research that stuff isn't good for you. It doesn't make you unhappy, but it doesn't make you happy. But one thing that does make us happy is an experience.