“…I wish I knew then what I know now”, or so goes the expression. I am sure we have all wished we had a few important financial secrets early enough in our career that we could have taken advantage of them. Right? Of course.
So a reporter recently asked me what my top 9 financial tips would be if I were to share them with someone on the way up. It took more time to narrow them down to 9 than to think of a list. Here they are, in no particular order:
- Risk is real, but so is life; so take a few calculated ones
- You can’t live without making decisions & taking risks so gather the best information you can, make a decision & live with it; or change it.
- Understand, and appreciate, the difference between a cost & an investment
- A cost is money spent without an expectation of a return
- An investment yields a return. Make investment decisions with risk/return in mind [like #8 below]
- Live on a budget
- Yes, you can. It is a matter of choices & priorities
- Live below your means
- There is always more you want than you need. Living below you means equates to your ability to satisfy all your needs & even a few of your wants without guilt or default. And you sleep better, too.
- Pay yourself first
- Deduct & put away a) retirement, b) savings & c) emergency funds first. Then live on the rest. You’ll thank yourself in retirement (and even earlier).
- Find enjoyment in the little things
- Big things are great; occasionally. But all the little things we see, hear, small, tough & feel everyday make life really worth living; and they are usually way less expensive than the big things (well, ok, not diamonds).
- Don’t worry about keeping up with the Jones’
- They’re probably borrowing too much anyway & worried about bankruptcy
- Invest in cash flow generating assets
- This is the only true type of independence, giving you financial freedom
- Understand the benefits of the right kinds of insurance
- The relatively small premiums reflect the diversification of the risk & when something major goes wrong, you’ll be glad you did.
How can Build It Backwards help you achieve your financial goals? Contact me at DanielFeiman@BuildItBackwards.com