Twelve Tips Toward Financial Independence:( You already know theses. This is just a reminder) 1. Don’t spend what you don’t have. Simple advice, yet to ignore it is to dig your way to the opposite of your goal, financial servitude. 2. Pay yourself first. You’ve heard it before, no doubt. Start by taking your savings right off the top. 10-15% of your gross is a good start before moving on to the next tip. 3. Budget. Know it, stick to it – while independence is an end goal, budgeting is a crucial part of the process to keep you on track to this goal. 4. Don’t spend to impress. In his “Millionaire Next Door,” Dr. Thomas Stanley helps to drive this point home. Don’t spend your money on expensive brand names that will only hold you back from your true goals. 5. Credit Cards = Poker Chips. Know why in Vegas you don’t use dollar coins or bills? By having your money turned into poker chips you tend to look at them as something less than your hard earned cash. In a similar way, many believe that credit cards have the same psychological impact. 6. Use it up, wear it out, make it do. This was the text of a WWII poster but is no less true today. 7. Buy your car used. The drop in price of a one year old car is often near 25% of its original cost. Let someone else pay for that expensive year. 8. Associate with success. People become more like those with whom they spend their time. To become a better (fill in your favorite sport) player, you need to spend time with those who are better than you, not the guys who just want to watch the game on TV. Success is not a bystander sport, you need to be in the game and associate with the best. 9. Ignore the Joneses. You will always be able to find a friend or neighbor who has better than you do. One guy has a bigger house, another, a better car. A neighbor bought his wife a beautiful tennis bracelet for their anniversary. The list doesn’t just go on, it never ends. Break the cycle before it starts. 10. Buy the best house in a safe neighborhood. This is the opposite of conventional wisdom and is the follow-on to tip 9. By buying the cheapest house in the best neighborhood as they suggest you do, you set yourself up from day one to catching up and keeping up with all of them. 11. Marry a partner. Just as a business can only be successful if the partners have a common goal, you can only reach your financial independence if you and your spouse are aligned in your quest. Too often one hears of one spouse being the spender, the other the saver. This is as important a discussion to have pre-marriage as any related to how many kids you plan to have or what house of worship to attend. 12. Discipline. The U.S. Marine Corps defines this word as “The ability to do the right thing even when no one is watching or suffer the consequences of guilt which produces pain in our bodies, through pain comes discipline.” Instead of thinking of discipline as we did as children, a punishment, this comes closer to my own view, “doing the right thing.” The steps toward financial independence are not painful, not an ongoing punishment, but a series of right choices that one must make each day.
Posted on: Wed, 23 Apr 2014 19:27:08 +0000
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