Compound interest is a game changer.
Investing 10k at age 20 and never touching it again will net you roughly the same as dropping 25k _and adding $50/month_ at age 40 by the time you reach age 70.
If you had started that 50/month at age 20 with 500 down, you achieve the same thing.
At age 40, you get similar results with nothing down and $200/month
^(All figures based on 6% interest.)
I'm so glad I took this advice seriously when I was young. I started investing aggressively as soon as I got my first full-time job, and thanks to that I'm on track to retire before 50 without investing another penny. If I keep maxing out my contributions, I'll reach financial freedom by 45.
Back when I was a rookie driver, I had a speed demon on my tail, which made me jittery, and I ended up picking up my speed. Then, my old man dropped this gem: "Don't let others take the wheel of your ride." Turns out, that nugget works in a lot of life scenarios.
It's funny, whenever I see road rage issues around me, or stuff like that, I used to participate in it....but now that I am older, whenever I see it, I either try to get out of the way, or even get off the highway....if there are several drivers being idiots and risking MY life for something petty, I'd rather exit the road for 5-10 minutes, then come back hopefully to a fresh highway away from them. Self preservation is a real thing.
When I was younger, if a faster car came up and tailgated me, it would anger me enough to go at exactly the speed limit and just stay there.
Now that I'm older and wiser (I hope!) I move out of the way. I don't want to get involved in their eventual car accident. They can go fuck themselves away from me.
I do that too, especially when cars wanna drive next to you, right behind or or don't let you pass them. Even if there are too many cars around me, I hate being in clusters, I'll exit for a bit. Works like charm. It's like reset.
when i was 15 my dad got me a job at the holiday in. needless to say i wasnt happy about it but i did the work. every paycheck i got he would take and invest 10% and put the rest in savings. again, was not a happy teenager. i worked my ass off there!
well im in my mid 30s now and ive invested 10% of every paycheck ive ever gotten since 15. its like withholding taxes for me... i just do it. every paycheck big or small. 10%. holy shit. my entire scope of life depends on having done that for 20 years. getting married this summer and not freaking out at all. i totally understand that many people do not have the luxury to do what i did or had a parent who was so focused on teaching finances... a huuuuge stroke of luck for me.
It's amazed me to realize that a lot of basic financial skills - making a budget, paying your taxes, managing your credit score - none of those are taught in public high school. At least not when I was there.
Any good books on this topic you’d recommend? I have a 10 hour flight coming up and would like to use the time to read but hard to know which books have a bias or bad info just to get the sale.
I dont think that quote is referring to home decor, i.e. hanging on the wall is its intended purpose. It's not even saying to avoid buying things you don't need, just not to buy something you aren't going to use. Like dont buy a margarita machine you use twice then stick on a shelf.
My grandmother, who had plenty of money, always used to point out the biggest fanciest house on our block.
" You see that big fancy house? I bet he's very proud of that house, spends a whole lot of time and money maintaining it month after month, year after year. But little does he know.
He doesn't own that house. The house owns him."
Ever since that time I've tried to minimize my housing cost and overhead and it's made an incredible difference in my life.
I have friends with much higher income than me, who live like slaves everyday because, for some reason, they just have to live in a big fancy house.
No one needs to know exactly how much you earn other than your spouse.
If you earn more than what people expect you to, they will start asking you for loans/favours/gifts.
On the flip side, having an idea of what your friends and colleagues make gives you a better perspective on if you're being paid fairly, or if you'd do better in the market. It's not the only factor in a job - but it's empowering to know if you're being paid at market rate.
>If you earn more than what people expect you to, they will start asking you for loans/favours/gifts.
Amd then they can get the double-finger raspberry 😛 Or the "I ain't a bank" response. Once the leeches know there ain't gonna be a payday they're usually pretty quick to bugger off. Ofc if you're on the seriously big bucks then the leeches will be harder to shave off.
I put as many of my monthly expenses onto a credit card that gives me air miles for every £1 I spend. The air miles I rack up every year just by doing that pay for my summer holiday. It’s awesome!
Eh, my friend's brother-in-law roped us all in when we were fresh out of university and starting new jobs. His job was to sell financial products. A bunch of use bought his mutual funds. He was of course interested in selling his products to us to make himself commissions. However, those investments that we bought in our 20s are worth way way way more than what we paid for them 30 years later. (assuming anyone held onto them).
yup I learned to do all sorts of things for myself to save money. cut my own hair, ride my bike everywhere, live off $25 of groceries for the week. Do what you have to to get your bills paid at the end of the month
This is terrible advice. You should live a financially responsible life, not live like you're broke. Most people who are broke live an unhappy life, eat unhealthily, suffer from stress and anxiety and do not make any kind of investments.
If you can afford a higher quality of life by all means go for it, it'll be highly beneficial for both your mental and physical health. At the same time you should do your best to become financially literate to make sure that you're budgeting in a sustainable and responsible way and that you have the skills to invest your savings in an intelligent manner.
My dad has the 1/3rd 1/3rd 1/3rd rule. If you can, save 1/3rd for your future. Spend 1/3rd on necessities like rent/mortgage, food, clothing, bills. Then enjoy the last third because...YOLO (I promise he doesn't say YOLO, I added that part in).
Those fractions can change, but the idea is the same.
That last 3rd makes sense.
You don't want to have spent your entire life working just to have a pile of cash when you die so that your deadbeat relatives can have it. Your worked hard, YOU should be going on that dream vacation, not your nephew after you die.
I administered an estate of a woman who had about 1.5 Million in investments. She lived alone in her parent's house and passed away without much fanfare. No will so some of her closest relatives got a very nice inheritance. Some spent it on big things and went on vacation. They didn't even know who she was. Her closest relative never even met her. I felt sad that she herself should have spent that money on herself and not these people who just happened to be related to her.
You can appreciate beautiful, fun, and otherwise desirable things without having to own them for yourself.
Helped me avoid a lot of unnecessary purchases.
The best financial advice I ever received was to prioritize saving and investing early on. By consistently setting aside a portion of my income and investing it wisely, I can secure my financial future and build wealth over time. Additionally, living within my means and avoiding unnecessary debt has been crucial in maintaining financial stability. By following these principles, I can achieve my financial goals and enjoy peace of mind knowing that I am prepared for any unexpected expenses or future opportunities.
Admittedly, the top piece of advice as to housing is becoming all but impossible in a lot of western nations now. Options are so crunched - especially at the affordable market rates - that spending half your income on housing is MUCH more common. Good advice if you can take it, but impossible to do so for a lot of folks.
Yes, unfortunately very true. It was true for my dad (boomer), and held true for me (Gen X) - at least until it didn't matter. But I look at my nieces and nephews (Gen Z all) and fear for them - I'd hate to be going through that stage of life again in this age...
"Best way to double your money is to fold it in half and put it back in your pocket" Thanks Gran (in relation to all the get rich quick schemes/scams at the time)
Also - "Best time was 20 years ago, next best time is now" in relation to investing in real estate / shares.
The money on a credit card is not your money. You don't have that money. Treat a credit card like you're taking a loan from the mafia.
My dad when I was 16.
Even though it took me way too long to really put it into practice. Understand compound interest. It's really not hard to understand, people just don't acknowledge it enough.
This goes for debt and assets btw.
Back in 2017 we had some unusual (for us) situation with our taxes that I didn't feel confident handling myself. So we got them done professionally. While we were talking, the preparer took note of our income level and our tax liability. She explained the Saver's Credit to us. Told us we could open Roth IRAs and benefit from that credit (at the top 50% level) while getting started on our retirement savings. Yes, it'd be a little more out of our pocket in the moment, but we'd benefit from the retirement accounts in the long run.
I'd grown up in a working poor family, and I just wasn't really aware of IRAs. Dad had military pension and aside from that I saw retirement accounts of any kind as something that either came from "good" jobs or were set up by wealthy people. I certainly hadn't realized that it was as simple as walking into our Credit Union and just signing up for one. Nor that there were tax breaks for lower income folks who could manage to put some away. You need to be low enough income to benefit from the credit, but \*also\* actually be able to save something, and that's tough for a lot of folks.
But it was something we could do by that point in our lives. We went to our credit union that day to set one up for my husband. I set one up as well years later when I got my state license and started working as a tax preparer myself, working for the same one who had told me about IRAs. And now I get to tell people about the Saver's Credit, too.
I think this will be the first year we earn enough to only get 20% on the credit.
Put your money in your wallet, put your wallet in a drawer, act like you don't have any money. Before you know it, you're swimming in moolah. After 40 years of working sounds just about right.
Living like you’re broke makes sense but just sticking your money in a drawer instead of an interest bearing account means you’re going to lose a lot of value over time.
The "magic" of compounding and the Rule of 72.
Instead of buying a $5 Starbucks coffee every day, invest in a stock mutual fund. Assuming you start at age 2 2 and earn an average rate of return of 7.2% (which doubles your money every 10 years), you will have over half a million dollars for retirement by age 65. People don't realize how small purchases can add up over time to keep one living paycheck to paycheck.
Ok. You have half a million at age 65, great. But you've missed out on 43 YEARS of daily Starbucks pleasure. Do you want to enjoy life while it is happening?
The coffee was just for illustrative purposes, but personally, I would rather pack a thermos of coffee and a lunch from home, and be a millionaire in my 60s when still young.
My post had 2 intents. (1) Most people don't understand compounding. Small investments can snowball over time and create wealth. (2) We should all be mindful of spending.
I don't disagree about compounding or being mindful of spending. Too many people reach age 60 without enough savings. But my point is that happiness must be found along the way.
If you can't control your spending habits, never use a credit card. If you don't want to be liable for the money in your transactions, never use a debit card.
**Understand your credit report, and how to get a copy.** Cleaning up my credit report, and opening lines of credit so I had some credit history (and - bizarrely - having more lines of credit open that are free of debt helps INCREASE your credit score), did me wonders in making my life better. I can easily secure money I may need at this point.
To always ask yourself how many time you are going to use or wear that item within a year. So let say i want to buy a new shoes, i estimate that i will be wearing those shoes daily (maybe about 300 days/year)Then i will do cost per wear. It helps so much. Prevents me from impulse buying, most of the time.
I was saying I thought I could swing higher payments (I was talking about a car, but it could be for anything). I was advised to take 6 months and make that payment to my own savings account. If it didn't mess up my day to day spending, I could move forward confidently, and I'd have a nice savings egg for myself to maintain that item once I got it. I actually followed the advice and it was awesome. Knowing I never had to dip back into my savings to pull any money back out made me know for sure I could handle the higher payment, which led me to buying something I enjoyed way more.
Start saving for retirement as soon as you start working. If you have a 401k, contribute enough to max your employer's match. It was tough to do that when I first started out, but 35 years later, I'm so glad my younger self listened.
When budgeting at some point it becomes easier to make more money.
I budgeted and was very frugal through my 20s. I would spend hours looking at our finances and trying to figure out what to cut. I think I learned a lot in this time but if your disciplined in your spending, focus on making money not cost cutting. I stressing over a budget and then getting this advice from a book. Spent the next 2 months applying for jobs and negotiating salary. Got a job offer at 50k above what I was making. Took the offer to my boss and asked him to match it. I got a 30k raise with 4% commission of sales.
Shakespeare said it best:
> Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
While it would be nice to completely uphold this completely, I do recognize it as impossible. But what a noble goal and certainly one easily held up for day to day living and personal relationships.
Loaning money has certainly led to loss of itself and friends, and I dare say husbandry should not be used in the same sentence as my financial situation due to credit card debt. The "edge of husbandry" has not only brrn dulled but is well rounded now.
Don't borrow money with interest. No credit cards, no car loans. I have a mortgage because that's unavoidable but other than that I've stayed out of debt.
This advice was given to me by my mother, who was not otherwise great with money.
Oh you know, the common "if you give money to friends/family... treat it as a gift and never expect it in return".
Which is about as basic as "What's an important rule about guns" and someone says "treat each one like it's loaded"
Remember to make the distinction between ' wants ' and ' needs ' is the single best lesson my financial planner drilled into me more than 30 years ago.
Pay yourself first.
Literally meaning when it comes time to do payroll, you take your cut first before paying anyone that's working for you. If one person doesn't get paid, at least the business and 99 others will get paid. If you can't survive to run the business then NO ONE gets paid.
But this mentality applies to so many things... take care of yourself financially but emotionally, socially, etc before you start worrying about others. It's like how in airplanes they tell you to put your mask on first before you help someone else. Because if you don't then no one is getting help.
All this advice is about saving and building a better future life, best financial advice I ever got was intentionally put money aside to spent on things with 0 value or that are bad decisions.
Otherwise you’ll get stuck in a perpetual saving loop and never enjoy your hard earned money and waste your life away never actually living.
Here today, gone tomorrow, don’t wait for tomorrow to enjoy todays fruits of your labor
Try to keep a 'cushion' in your checking account. An amount you set, whether it's $100 or $1000 or whatever, is your new 'zero balance'. You will save tons of $ on overdraft fees, plus have a small emergency fund. (also keep your money other places too)
You can borrow money for a lot of things but not for retirement. Not exactly true maybe but you get the point.
Enjoy life, it could end tomorrow but don't plan on it.
Other good ones list here too!
There isn't just one, so the following bunch helps me stay on target immensely.
Save as much as you can. but a minimum of 30% of your paycheck. Buying something 50% off is like giving yourself a 50% raise. Pay your cc's in full always. The market changes therefore the advice that held true yesterday may no longer hold true today.
Start investing today. Don't wait for something you like, just start with a stock/crypto/etc. that can help you understand the up/down market you are wanting to invest. You will learn & adjust to the market & how much you should be investing short term vs. long term. It's the best advice I had about investing for the future!
Opportunity cost by far. The basic idea being, TIME IS MONEY. If you spend 10 hours to save a small amount of money, it is not worth it. If you pay top dollar, but it saves you time, it is usually worth it. The only thing that is actually valuable is your life so spend your time wisely.
When I started working at 21, my friend's brother-in-law just started working for an investment broker. He pestered my friend to give him the names/number of all our friends and he called each one of us and spoke to us. He convinced us to buy into his company's mutual funds. There was a 2% fee paid up front, which I didn't like, but I went with it. After a few years, I stopped because that 2% bothered me (and I didn't understand it). Then I didn't think about that account, but now, after 20+ years, there's a quarter million dollars in that account.
So what I learned from him was ... start investing early. Even if it's a little bit, contribute every month and "dollar cost averaging" will help you out. ie; always buy $100 every month. If the price is low, you get more shares, if it's high, you buy less, but you are always buying $100 worth. Eventually if the fund is good, it averages in your favor. (because when the price dips you are buying low, when it's high well you are still contributing, but not as much ... or something like that).
Bottom line: Invest early in your life and if you can, keep contributing to it even if it's a little bit.
Before people pipe in with "Buy I have to pay rent and eat", yes of course handle your necessities first. But if you do have a bit extra, consider investing it.
Whenever you want to buy something, ask yourself if you need it or want it. If it's a need, buy it, if you can afford it. If you want it; but can't afford it, don't buy it until you have the money to pay for it in full. If you still want it when you've saved enough, then buy it.
Pay yourself first. Get out of debt and start investing immediately. There will always be an excuse or reason not to, but time and compound interest work miracles the sooner you can start.
Tracking every penny you spend for year (or forever) will have the impact of drastically changing your spending habits. All the way down to the nickel you put into the Parking meter.
This is one of the few funny Saturday Night Live skits.
It's also a brilliant piece of financial advice;
[Don't buy stuff you cannot afford](https://youtu.be/R3ZJKN_5M44?si=yM5l1KlANBLFz4Eh)
[https://youtu.be/R3ZJKN\_5M44?si=yM5l1KlANBLFz4Eh](https://youtu.be/R3ZJKN_5M44?si=yM5l1KlANBLFz4Eh)
My dad's given me two great ones that have both saved my ass on multiple occasions:
If you're looking to get something and you're having thoughts about whether you actually need it or if it's worth buying, think about how many hours or tasks you had to work to afford it and ask yourself if the enjoyment/use you'd get out of the item is worth the amount of work you had to put in for it.
Put money back from every pay check, doesn't matter if you can stash $20 or just $1 that week. Money is money and it adds up. When you're living paycheck to paycheck and an emergency happens like your car breaking down, you'll be absolutely relieved that you have something held back to soften the blow regardless of how low the amount seemed before.
Stop purchasing everything with your debit card. Use a credit card and pay it off weekly.
Debit card offers no real protection. Credit card on time payments report 4 a month and builds credit. You can also get a 2% cash back card.
Keep buying real estate with the largest mortgage you can handle making payments on with a 5% interest rate increase, and trust that governments will continue to be net debtors, do whatever they have to in order to ensure the banking system is able to keep creating credit on a net basis, and then the increased quantity of dollars over time will give you a good return as the value of your mortgages/debt plummet in real wealth terms (as measured in real estate).
Don’t spend time thinking how you can save money. Think how you can make more.
This one advice was given to me by the only two multi millionaires i know.
The easiest way to double your money is to fold it in half and put it back in your wallet.
My personal rule of thumb has been to delay a purchase 1 day for every $100. If I really want to buy a $300 thing, I give myself a few days to think about it, and if I still want it only then do I pull the trigger.
What's super crazy is that, over half the time, I end up losing interest and not buying it at all. Some stuff I end up buying a cheaper variant after sleeping on it.
When someone who makes decent money is just scraping by, it usually boils down to poorly-considered impulse buys that are wrecking their finances.
My parents really pounded into me that credit card debt was the devil and never worth it. In high school, they got me a credit card so I could practice not overspending and I've never carried a balance. Obviously that's partially luck but it's worked for me.
You might *want* it, but do you really *need* it?
Before you buy it, think about *why* you want it, and what having it would mean to you, and how it'd change your life.
You might be able to buy it, but what about after? Can you afford to buy it and keep up your current lifestyle?
If you can't afford it, don't go into debt for it. If you do, all it'll take is one fuck up and you'll be fucked. No debts or loans - if you can't buy it outright, you can't afford it, simple as. If it truly means that much to you, work hard and save up for it.
Start saving money as young as possible and leverage the awesome power of compound interest.
Compound interest is a game changer. Investing 10k at age 20 and never touching it again will net you roughly the same as dropping 25k _and adding $50/month_ at age 40 by the time you reach age 70. If you had started that 50/month at age 20 with 500 down, you achieve the same thing. At age 40, you get similar results with nothing down and $200/month ^(All figures based on 6% interest.)
I'm so glad I took this advice seriously when I was young. I started investing aggressively as soon as I got my first full-time job, and thanks to that I'm on track to retire before 50 without investing another penny. If I keep maxing out my contributions, I'll reach financial freedom by 45.
That’s awesome, congratulations! I wish I’d taken it as seriously as you did from the get-go. I’m targeting an early retirement but not that early.
Same
Back when I was a rookie driver, I had a speed demon on my tail, which made me jittery, and I ended up picking up my speed. Then, my old man dropped this gem: "Don't let others take the wheel of your ride." Turns out, that nugget works in a lot of life scenarios.
It's funny, whenever I see road rage issues around me, or stuff like that, I used to participate in it....but now that I am older, whenever I see it, I either try to get out of the way, or even get off the highway....if there are several drivers being idiots and risking MY life for something petty, I'd rather exit the road for 5-10 minutes, then come back hopefully to a fresh highway away from them. Self preservation is a real thing.
When I was younger, if a faster car came up and tailgated me, it would anger me enough to go at exactly the speed limit and just stay there. Now that I'm older and wiser (I hope!) I move out of the way. I don't want to get involved in their eventual car accident. They can go fuck themselves away from me.
I do that too, especially when cars wanna drive next to you, right behind or or don't let you pass them. Even if there are too many cars around me, I hate being in clusters, I'll exit for a bit. Works like charm. It's like reset.
My Gramma always said to me, “Let someone else take the ticket.” Solid simple advice.
"He can go have his accident elsewhere"
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Yep. And scrimp and save until you have at minimum one months total bills saved. Preferably multiple months.
when i was 15 my dad got me a job at the holiday in. needless to say i wasnt happy about it but i did the work. every paycheck i got he would take and invest 10% and put the rest in savings. again, was not a happy teenager. i worked my ass off there! well im in my mid 30s now and ive invested 10% of every paycheck ive ever gotten since 15. its like withholding taxes for me... i just do it. every paycheck big or small. 10%. holy shit. my entire scope of life depends on having done that for 20 years. getting married this summer and not freaking out at all. i totally understand that many people do not have the luxury to do what i did or had a parent who was so focused on teaching finances... a huuuuge stroke of luck for me.
This is a good one.
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Except: you don't need to read the daily market / stock market news / noise
It's amazed me to realize that a lot of basic financial skills - making a budget, paying your taxes, managing your credit score - none of those are taught in public high school. At least not when I was there.
Any good books on this topic you’d recommend? I have a 10 hour flight coming up and would like to use the time to read but hard to know which books have a bias or bad info just to get the sale.
"Do you really need it, or will it be collecting dust in a year?" \~Dad
Good advice. Exception made of display pieces, like paintings, which are, well, designed to stand in place and not do anything.
I dont think that quote is referring to home decor, i.e. hanging on the wall is its intended purpose. It's not even saying to avoid buying things you don't need, just not to buy something you aren't going to use. Like dont buy a margarita machine you use twice then stick on a shelf.
My dad would say if you don't use it for a year get rid of it.
Idk I didn’t use a car jump starter for like 5 years. But when I needed it it was really nice to have.
But Dad, I'm thinking about buying a Dyson vacuum. I need it to collect dust for many years!
Understand the power of compound interest; it can work for you (investments) or against you (loans).
My grandmother, who had plenty of money, always used to point out the biggest fanciest house on our block. " You see that big fancy house? I bet he's very proud of that house, spends a whole lot of time and money maintaining it month after month, year after year. But little does he know. He doesn't own that house. The house owns him." Ever since that time I've tried to minimize my housing cost and overhead and it's made an incredible difference in my life. I have friends with much higher income than me, who live like slaves everyday because, for some reason, they just have to live in a big fancy house.
Or that person could have been living well within his means and enjoying his house.
Are you friends with my parents?
Invest early, even if it’s a small amount. The sooner you start, the more you benefit from growth ov
The chart here supports your advice: [https://sweeneymichel.com/blog/compounding](https://sweeneymichel.com/blog/compounding)
Money talks, wealth whispers, and debt screams.
That’s a good one
The rest of us just grumble.
No one needs to know exactly how much you earn other than your spouse. If you earn more than what people expect you to, they will start asking you for loans/favours/gifts.
On the flip side, having an idea of what your friends and colleagues make gives you a better perspective on if you're being paid fairly, or if you'd do better in the market. It's not the only factor in a job - but it's empowering to know if you're being paid at market rate.
It's strange how people think they are entitled to your money
>If you earn more than what people expect you to, they will start asking you for loans/favours/gifts. Amd then they can get the double-finger raspberry 😛 Or the "I ain't a bank" response. Once the leeches know there ain't gonna be a payday they're usually pretty quick to bugger off. Ofc if you're on the seriously big bucks then the leeches will be harder to shave off.
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I put as many of my monthly expenses onto a credit card that gives me air miles for every £1 I spend. The air miles I rack up every year just by doing that pay for my summer holiday. It’s awesome!
There's a difference between being able to buy it, and being able to afford it.
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Eh, my friend's brother-in-law roped us all in when we were fresh out of university and starting new jobs. His job was to sell financial products. A bunch of use bought his mutual funds. He was of course interested in selling his products to us to make himself commissions. However, those investments that we bought in our 20s are worth way way way more than what we paid for them 30 years later. (assuming anyone held onto them).
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Easy when you are actually broke
yup I learned to do all sorts of things for myself to save money. cut my own hair, ride my bike everywhere, live off $25 of groceries for the week. Do what you have to to get your bills paid at the end of the month
This is terrible advice. You should live a financially responsible life, not live like you're broke. Most people who are broke live an unhappy life, eat unhealthily, suffer from stress and anxiety and do not make any kind of investments. If you can afford a higher quality of life by all means go for it, it'll be highly beneficial for both your mental and physical health. At the same time you should do your best to become financially literate to make sure that you're budgeting in a sustainable and responsible way and that you have the skills to invest your savings in an intelligent manner.
My dad has the 1/3rd 1/3rd 1/3rd rule. If you can, save 1/3rd for your future. Spend 1/3rd on necessities like rent/mortgage, food, clothing, bills. Then enjoy the last third because...YOLO (I promise he doesn't say YOLO, I added that part in). Those fractions can change, but the idea is the same.
That would be nice, but I’m lucky to save 1/10th for the future and spend 3/4 on necessities. It’s tough out here man.
That last 3rd makes sense. You don't want to have spent your entire life working just to have a pile of cash when you die so that your deadbeat relatives can have it. Your worked hard, YOU should be going on that dream vacation, not your nephew after you die. I administered an estate of a woman who had about 1.5 Million in investments. She lived alone in her parent's house and passed away without much fanfare. No will so some of her closest relatives got a very nice inheritance. Some spent it on big things and went on vacation. They didn't even know who she was. Her closest relative never even met her. I felt sad that she herself should have spent that money on herself and not these people who just happened to be related to her.
Okay, then live like you aint a crackhead - but still save money, and dont fall into various forms of PTSD or become a narcissist.
You're taking the comment too literally. They mean don't spend money just because you have it.
Learn the difference between wants and needs, and prioritize spending on needs.
You can appreciate beautiful, fun, and otherwise desirable things without having to own them for yourself. Helped me avoid a lot of unnecessary purchases.
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Nice
The best financial advice I ever received was to prioritize saving and investing early on. By consistently setting aside a portion of my income and investing it wisely, I can secure my financial future and build wealth over time. Additionally, living within my means and avoiding unnecessary debt has been crucial in maintaining financial stability. By following these principles, I can achieve my financial goals and enjoy peace of mind knowing that I am prepared for any unexpected expenses or future opportunities.
"A third on housing, a third on living and a third on saving." (My dad) Also, "Don't spend what you don't have." (ibid)
Admittedly, the top piece of advice as to housing is becoming all but impossible in a lot of western nations now. Options are so crunched - especially at the affordable market rates - that spending half your income on housing is MUCH more common. Good advice if you can take it, but impossible to do so for a lot of folks.
Yes, unfortunately very true. It was true for my dad (boomer), and held true for me (Gen X) - at least until it didn't matter. But I look at my nieces and nephews (Gen Z all) and fear for them - I'd hate to be going through that stage of life again in this age...
Save first, spend next. Not the other way around.
You dont really need it
"Best way to double your money is to fold it in half and put it back in your pocket" Thanks Gran (in relation to all the get rich quick schemes/scams at the time) Also - "Best time was 20 years ago, next best time is now" in relation to investing in real estate / shares.
The money on a credit card is not your money. You don't have that money. Treat a credit card like you're taking a loan from the mafia. My dad when I was 16.
Don’t spend money you don’t have
Be born into a wealthy family.
Also, be good looking. Now you're really set!
Even though it took me way too long to really put it into practice. Understand compound interest. It's really not hard to understand, people just don't acknowledge it enough. This goes for debt and assets btw.
If you don't have the cash, you can't afford it.
Get rich slowly.
you cant buy something untill you can but it twice
Dont spend your money if you dont have it yet
Before you buy something think about whether you really need it or whether it will gather dust on the shelf.
Back in 2017 we had some unusual (for us) situation with our taxes that I didn't feel confident handling myself. So we got them done professionally. While we were talking, the preparer took note of our income level and our tax liability. She explained the Saver's Credit to us. Told us we could open Roth IRAs and benefit from that credit (at the top 50% level) while getting started on our retirement savings. Yes, it'd be a little more out of our pocket in the moment, but we'd benefit from the retirement accounts in the long run. I'd grown up in a working poor family, and I just wasn't really aware of IRAs. Dad had military pension and aside from that I saw retirement accounts of any kind as something that either came from "good" jobs or were set up by wealthy people. I certainly hadn't realized that it was as simple as walking into our Credit Union and just signing up for one. Nor that there were tax breaks for lower income folks who could manage to put some away. You need to be low enough income to benefit from the credit, but \*also\* actually be able to save something, and that's tough for a lot of folks. But it was something we could do by that point in our lives. We went to our credit union that day to set one up for my husband. I set one up as well years later when I got my state license and started working as a tax preparer myself, working for the same one who had told me about IRAs. And now I get to tell people about the Saver's Credit, too. I think this will be the first year we earn enough to only get 20% on the credit.
If you cant buy something twice you couldn't afford it the first time
STAY AWAY FROM ANNUITIES
If you can't afford 2 or 3 of it and still be comfortable with your bank account, it's best not to get it.
I think that one doesn't work. I don't think I can afford two houses or two cars.
Put your money in your wallet, put your wallet in a drawer, act like you don't have any money. Before you know it, you're swimming in moolah. After 40 years of working sounds just about right.
Living like you’re broke makes sense but just sticking your money in a drawer instead of an interest bearing account means you’re going to lose a lot of value over time.
Don't have children.
I don't understand how anyone can afford to have children anymore. It must be financially crippling to get pregnant unexpectedly.
always try to save some money
Plastics.
The "magic" of compounding and the Rule of 72. Instead of buying a $5 Starbucks coffee every day, invest in a stock mutual fund. Assuming you start at age 2 2 and earn an average rate of return of 7.2% (which doubles your money every 10 years), you will have over half a million dollars for retirement by age 65. People don't realize how small purchases can add up over time to keep one living paycheck to paycheck.
Ok. You have half a million at age 65, great. But you've missed out on 43 YEARS of daily Starbucks pleasure. Do you want to enjoy life while it is happening?
The coffee was just for illustrative purposes, but personally, I would rather pack a thermos of coffee and a lunch from home, and be a millionaire in my 60s when still young. My post had 2 intents. (1) Most people don't understand compounding. Small investments can snowball over time and create wealth. (2) We should all be mindful of spending.
I don't disagree about compounding or being mindful of spending. Too many people reach age 60 without enough savings. But my point is that happiness must be found along the way.
If the cost of maintaining an older car exceeds the monthly payment on a new car it’s time to replace the old car.
If you can't control your spending habits, never use a credit card. If you don't want to be liable for the money in your transactions, never use a debit card.
Buy low sell high! (jk)
Stop opening ozbagain and hotukdeals You waste money on shit.
Always live beneath your means Never finance anything that loses value
Be patient with your investments; the stock market can be volatile in the short term but tends to grow over time.
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if you can still use it, don't buy another
If you cant pay a month of rent or mortgage with a week of your take home pay you will financially sink.
Get rid of your credit cards, and you'll find a way to live within your means. Smartest advice ever.
Maximize your IRA.
Live beneath your means and save the money.
If you can survive without it you probably don't need it
Just calculate with the money you have.
**Understand your credit report, and how to get a copy.** Cleaning up my credit report, and opening lines of credit so I had some credit history (and - bizarrely - having more lines of credit open that are free of debt helps INCREASE your credit score), did me wonders in making my life better. I can easily secure money I may need at this point.
Don’t spend more than you make.
To always ask yourself how many time you are going to use or wear that item within a year. So let say i want to buy a new shoes, i estimate that i will be wearing those shoes daily (maybe about 300 days/year)Then i will do cost per wear. It helps so much. Prevents me from impulse buying, most of the time.
Gimme a dollar
Only loan the amount of money to friends or family that you are willing to give them
Self managed super fund. 10$+ a week of your own money not just wages super. Invest in essentials.
Debt, is a form of slavery...
I was saying I thought I could swing higher payments (I was talking about a car, but it could be for anything). I was advised to take 6 months and make that payment to my own savings account. If it didn't mess up my day to day spending, I could move forward confidently, and I'd have a nice savings egg for myself to maintain that item once I got it. I actually followed the advice and it was awesome. Knowing I never had to dip back into my savings to pull any money back out made me know for sure I could handle the higher payment, which led me to buying something I enjoyed way more.
Simple...start early no matter how small, and it's perfectly fine to start late as well, just start saving.
Pay yourself first. Save 10% or more and squirrel it away. Even if it kills you. Use it to buy a house, car, or health emergencies.
I got talked into contributing to a 401k when they were first established. Going to make my retirement much easier.
Start saving for retirement as soon as you start working. If you have a 401k, contribute enough to max your employer's match. It was tough to do that when I first started out, but 35 years later, I'm so glad my younger self listened.
When budgeting at some point it becomes easier to make more money. I budgeted and was very frugal through my 20s. I would spend hours looking at our finances and trying to figure out what to cut. I think I learned a lot in this time but if your disciplined in your spending, focus on making money not cost cutting. I stressing over a budget and then getting this advice from a book. Spent the next 2 months applying for jobs and negotiating salary. Got a job offer at 50k above what I was making. Took the offer to my boss and asked him to match it. I got a 30k raise with 4% commission of sales.
Time in the market is better than timing the market
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Don’t use credit cards
Shakespeare said it best: > Neither a borrower nor a lender be, For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry. While it would be nice to completely uphold this completely, I do recognize it as impossible. But what a noble goal and certainly one easily held up for day to day living and personal relationships. Loaning money has certainly led to loss of itself and friends, and I dare say husbandry should not be used in the same sentence as my financial situation due to credit card debt. The "edge of husbandry" has not only brrn dulled but is well rounded now.
Save, get a loan and make every payment on time
Don't borrow money with interest. No credit cards, no car loans. I have a mortgage because that's unavoidable but other than that I've stayed out of debt. This advice was given to me by my mother, who was not otherwise great with money.
Oh you know, the common "if you give money to friends/family... treat it as a gift and never expect it in return". Which is about as basic as "What's an important rule about guns" and someone says "treat each one like it's loaded"
In the long run most managed funds under perform the stock market averages. Think about it. I'm in index funds.
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Remember to make the distinction between ' wants ' and ' needs ' is the single best lesson my financial planner drilled into me more than 30 years ago.
Who you marry is also a business decision.
Marry for money the first time. Love the second time.- dad. I’ve done neither and doing just fine :)
Don't try to play the market, you aren't smarter than everybody else, just index everything.
Buy low. Sell high. Avoid paying fees.
Pay yourself first. Literally meaning when it comes time to do payroll, you take your cut first before paying anyone that's working for you. If one person doesn't get paid, at least the business and 99 others will get paid. If you can't survive to run the business then NO ONE gets paid. But this mentality applies to so many things... take care of yourself financially but emotionally, socially, etc before you start worrying about others. It's like how in airplanes they tell you to put your mask on first before you help someone else. Because if you don't then no one is getting help.
Invest as much as you can when you are young. Dont leave company matches on the table. Time in the market is so powerful
All this advice is about saving and building a better future life, best financial advice I ever got was intentionally put money aside to spent on things with 0 value or that are bad decisions. Otherwise you’ll get stuck in a perpetual saving loop and never enjoy your hard earned money and waste your life away never actually living. Here today, gone tomorrow, don’t wait for tomorrow to enjoy todays fruits of your labor
Try to keep a 'cushion' in your checking account. An amount you set, whether it's $100 or $1000 or whatever, is your new 'zero balance'. You will save tons of $ on overdraft fees, plus have a small emergency fund. (also keep your money other places too)
You can borrow money for a lot of things but not for retirement. Not exactly true maybe but you get the point. Enjoy life, it could end tomorrow but don't plan on it. Other good ones list here too!
There isn't just one, so the following bunch helps me stay on target immensely. Save as much as you can. but a minimum of 30% of your paycheck. Buying something 50% off is like giving yourself a 50% raise. Pay your cc's in full always. The market changes therefore the advice that held true yesterday may no longer hold true today.
Live a smaller life than you can afford.
Start investing in the market
Start investing today. Don't wait for something you like, just start with a stock/crypto/etc. that can help you understand the up/down market you are wanting to invest. You will learn & adjust to the market & how much you should be investing short term vs. long term. It's the best advice I had about investing for the future!
Opportunity cost by far. The basic idea being, TIME IS MONEY. If you spend 10 hours to save a small amount of money, it is not worth it. If you pay top dollar, but it saves you time, it is usually worth it. The only thing that is actually valuable is your life so spend your time wisely.
Do what you like, money will come naturally then. (This is valid to a certain extent)
When I started working at 21, my friend's brother-in-law just started working for an investment broker. He pestered my friend to give him the names/number of all our friends and he called each one of us and spoke to us. He convinced us to buy into his company's mutual funds. There was a 2% fee paid up front, which I didn't like, but I went with it. After a few years, I stopped because that 2% bothered me (and I didn't understand it). Then I didn't think about that account, but now, after 20+ years, there's a quarter million dollars in that account. So what I learned from him was ... start investing early. Even if it's a little bit, contribute every month and "dollar cost averaging" will help you out. ie; always buy $100 every month. If the price is low, you get more shares, if it's high, you buy less, but you are always buying $100 worth. Eventually if the fund is good, it averages in your favor. (because when the price dips you are buying low, when it's high well you are still contributing, but not as much ... or something like that). Bottom line: Invest early in your life and if you can, keep contributing to it even if it's a little bit. Before people pipe in with "Buy I have to pay rent and eat", yes of course handle your necessities first. But if you do have a bit extra, consider investing it.
Never get a car loan
Whenever you want to buy something, ask yourself if you need it or want it. If it's a need, buy it, if you can afford it. If you want it; but can't afford it, don't buy it until you have the money to pay for it in full. If you still want it when you've saved enough, then buy it.
Pay yourself first. Get out of debt and start investing immediately. There will always be an excuse or reason not to, but time and compound interest work miracles the sooner you can start.
Time in market > timing the market
You can only control your spending.. everything else is a variable.
Tracking every penny you spend for year (or forever) will have the impact of drastically changing your spending habits. All the way down to the nickel you put into the Parking meter.
This is one of the few funny Saturday Night Live skits. It's also a brilliant piece of financial advice; [Don't buy stuff you cannot afford](https://youtu.be/R3ZJKN_5M44?si=yM5l1KlANBLFz4Eh) [https://youtu.be/R3ZJKN\_5M44?si=yM5l1KlANBLFz4Eh](https://youtu.be/R3ZJKN_5M44?si=yM5l1KlANBLFz4Eh)
Buy good investments, don't overpay, do nothing.
My dad's given me two great ones that have both saved my ass on multiple occasions: If you're looking to get something and you're having thoughts about whether you actually need it or if it's worth buying, think about how many hours or tasks you had to work to afford it and ask yourself if the enjoyment/use you'd get out of the item is worth the amount of work you had to put in for it. Put money back from every pay check, doesn't matter if you can stash $20 or just $1 that week. Money is money and it adds up. When you're living paycheck to paycheck and an emergency happens like your car breaking down, you'll be absolutely relieved that you have something held back to soften the blow regardless of how low the amount seemed before.
If you want ""wants"make sure it's as cheap as possible
Stop purchasing everything with your debit card. Use a credit card and pay it off weekly. Debit card offers no real protection. Credit card on time payments report 4 a month and builds credit. You can also get a 2% cash back card.
Keep buying real estate with the largest mortgage you can handle making payments on with a 5% interest rate increase, and trust that governments will continue to be net debtors, do whatever they have to in order to ensure the banking system is able to keep creating credit on a net basis, and then the increased quantity of dollars over time will give you a good return as the value of your mortgages/debt plummet in real wealth terms (as measured in real estate).
Don’t spend time thinking how you can save money. Think how you can make more. This one advice was given to me by the only two multi millionaires i know.
You can lose a lot of money chasing women, but you’ll never lose women chasing money.
The easiest way to double your money is to fold it in half and put it back in your wallet. My personal rule of thumb has been to delay a purchase 1 day for every $100. If I really want to buy a $300 thing, I give myself a few days to think about it, and if I still want it only then do I pull the trigger. What's super crazy is that, over half the time, I end up losing interest and not buying it at all. Some stuff I end up buying a cheaper variant after sleeping on it. When someone who makes decent money is just scraping by, it usually boils down to poorly-considered impulse buys that are wrecking their finances.
*Don't buy it until you can buy it twice.*
"Save before you spend, man." Can't go wrong with that one.
Max out your 401k match.
When I was house shopping: "Don't buy as much house as the bank is willing to mortgage for you."
Spend less than you make and save more than you spend
Pay yourself first. Get started TODAY.
Invest while still young
Don't buy that now. If you still want it in 3 hours, buy it then.
My parents really pounded into me that credit card debt was the devil and never worth it. In high school, they got me a credit card so I could practice not overspending and I've never carried a balance. Obviously that's partially luck but it's worked for me.
You might *want* it, but do you really *need* it? Before you buy it, think about *why* you want it, and what having it would mean to you, and how it'd change your life. You might be able to buy it, but what about after? Can you afford to buy it and keep up your current lifestyle? If you can't afford it, don't go into debt for it. If you do, all it'll take is one fuck up and you'll be fucked. No debts or loans - if you can't buy it outright, you can't afford it, simple as. If it truly means that much to you, work hard and save up for it.