Spending
·
Don’t use credit cards for useless purchases.
·
Avoid debt.
·
Always pay off your credit card balance in full every
month.
·
Spend less than you earn.
·
Make sure you can afford it before you buy it.
·
Spend money on the things you enjoy, and cut costs on
the things you don’t.
·
When your income goes up by a certain amount, don’t let
your spending increase by the same amount.
·
If you are unable to save anything, at least make sure
you aren’t going into debt.
·
If your basic expenses are more than you bring in, find
a way to either spend less or to make more.
Life
·
Have goals.
Write them down. Everything you
do should be with those goals in mind.
·
Never stop learning.
Educate yourself, and strive for constant improvement.
·
Exercise.
·
Be disciplined.
·
Network like crazy.
·
If you provide a product or service that people want,
or can solve a problem, you will become rich.
·
No one owes you anything. The world doesn’t care what you want. Go out there and get it. Be lucky you live in a country where you are
able to move up, and the government can’t just take away your property.
·
There is no job that you are too good for. You may have to start small, but keep your
mind on your goals.
Pay yourself first
Make sure you
put money away right when you get your paycheck, similar to how you treat your
bills or your rent. Automate your
savings and your bills (take money out before you even see it).
If you
don’t find a way to make money while you sleep, you will work until you die –
Warren Buffett
Financial Independence
·
The stock market returns about 5% in real returns
(adjusted for inflation) in an average year.
Therefore, you can safely withdraw 4% of your net worth every year and
the money will last forever
·
Save 25 times what you expect to spend in a year. If you have a million saved, you can safely
withdraw 40,000 a year (4%) and it will never run out. That money will adjust for inflation.
Saving
The best
time to plant a tree was 20 years ago.
The second best time is now – Chinese proverb
·
Start saving as soon as possible.
·
Pay off all your high interest debt before you start
saving.
·
Interest can work for you or against you, so avoid debt
and save as much as possible, as early as possible.
·
If you start saving $100 a month when you are 18 and do
that for only 10 years, then stop saving entirely, letting the
cash grow until you are 65, you will have $345,000. However, if you wait until you are 28 to
start saving, you will have to save $100 a month for 41 years to
reach the same amount.
·
Save at least three months of living expenses in a
savings account. This will be your
emergency fund. Once you reach this goal,
continue to save and funnel your money into your investment accounts.
·
Don’t worry if you can’t save anything right now. Just work towards it.
Investing
·
Make your money work for you instead of the other way
around.
·
Invest your money and let compounding interest do the
heavy lifting for you.
·
Plant your money tree now and enjoy the fruits when
you’re older.
·
Max out your tax-advantaged retirement accounts (401k,
IRA) before you invest in anything else.
Generally Roth is better for both, if you qualify. If you’ve maxed those out, use any extra
money to purchase investments through a commission-free brokerage platform like
Robinhood.
·
Choose low-cost passive index funds. Vanguard has some of the cheapest in the
industry. Avoid actively managed mutual
funds, since they usually underperform the market over a long period of time
due to their commissions and fees.
·
When choosing a financial advisor, make sure they are a
fiduciary, and they are fee-only. This
will make sure they’re looking out for your money, not theirs.
·
Don’t put all your eggs in one basket – diversify.
