1) If you don’t have it, don’t spend it
The most important thing is to spend less than what you make. Don’t be taken in by the ‘buy now, pay later’ schemes that many companies promote. The idea is appealing but you will find that these schemes hold the recipe for disaster.
2) Your financial planning is your future
Saving towards your retirement fund used to be a simple matter of being part of an employee pension fund. However, this is all changing as many employers no longer fund their pension schemes in the way they used too and are making their workforces smaller. The only retirement fund that you can guarantee is the one that you work towards by saving regularly and by making sound investments.
3) Make your money grow
Begin a high interest savings account from an early age. Use this account throughout your working life to deposit an amount each month creating a nest egg for when you eventually do retire. This is probably the closest one will ever get to watch magic happen.
4) Don’t let others take advantage of you
There are hundreds of ways in which money can be misspent, not to mention the many people who are quite happy to take it from you. Any spam email you receive should be deleted. View all advertisements with caution and don’t purchase from an unexpected salesman.
5) Plan for change
Whilst it is only natural for us in our early twenties to live day to day and dream and scheme for the future we need to control our saving and spending habits as we get older and head towards our thirties as our professional and family responsibilities and obligations take priority. As we hit our forties, concentration on accumulating assets should be our main goal. By the age of fifty it should be possible to live on passive investment income and by the age of sixty you should now be able to live the lifestyle that you choose without being employed.
Note that this will only happen if you made the decision to make this happen at an early stage.
6) Money does not make us Happy
Even though money can ensure that the financial obligations that you have such as your children’s schooling and mortgage payments can be met there are many problems that come with being financially stable. Relationships with friends and family could change as they begin to perceive you differently because of your financial position. Admiration and envy seem to come together and as your wealth grows you will experience these two emotions from almost everyone you know at some time. Having money does not guarantee happiness only sensible use can result in this.
7) If you don’t need it, give it away
There is much satisfaction and even happiness gained from giving back some of your good fortune to those that are less fortunate than yourself. Establish some form of non profit organisation that could help students and/or people who have not been given the opportunities or tools to ensure their financial success in life. If you consider what you could spend your sizeable fortune on can you find a better way to spend the money you don’t need?