More and more men are getting their finances in shape, and you should be one of them. As this year begins, here are six timeless personal finance tips that will help you get the New Year off to a good start.
Tip #1: Earn More.
It doesn’t matter which financial expert you’ll consult, they’ll all tell you that investment returns in America will be declining for the next several years. This is a natural reaction to the aging workforce and other economic factors.
The hard, fast remedy to declining investment interest rates is to increase your cash flow. When you earn more, you’ll basically make up for the smaller returns from your investments, while providing you with some much-needed cash at hand at the same time.
So how can you earn more? My suggestions:
• Monetize your habits. Try Googling “How to make money by (insert your hobby here)” to get good ideas.
• If you’re not into small business yet, start studying. Seventy percent of America’s millionaires are ordinary homeowners who have a few tiny businesses supplementing their day job income. To make the learning curve easier, look for home-based business ideas.
Tip #2: Save More.
Do you tend to spend whatever extra money you get? As rewarding as it may feel, I’m sure you don’t want to get caught unprepared when an economic downturn comes out of nowhere, like what happened to millions of Americans during the 2008 recession.
So, here’s my second piece of advice: Start saving more. Received a tax rebate? Got an unexpected financial windfall from a relative? Got a bonus at work? Won the lottery? Whatever it might be, resist the urge to spend it… and instead, save it for a rainy day.
You might have heard financial experts suggest you maintain an emergency fund of six months’ worth of expenses, and that’s a good idea. But if you’re older (say 50 and up), I suggest you increase the size of your emergency fund to last you 12 months. This is because as you get older, your money-making capacity—whether by holding a job or starting a business—start to decline.
Tip #3: Spend Less Without Sacrificing Your Quality of Life.
Americans unfortunately, have the bad financial habit of “buying up,” or upgrading what they have whenever they can. For instance, once someone qualifies for a second mortgage, they immediately get a bigger house, and then realize too late that they’re stuck with higher maintenance costs.
Here’s what you should do instead: Take a sheet of paper and write down the absolute minimum you need to own to be happy and stick to that.
For example, make a list of the rooms and amenities you want for your house. Will you really need five bedrooms? Or will you be just as happy with three bedrooms?
Will you really need a study AND a man cave? Or will you be just as happy with a single room for both spaces?
You can do this exercise with anything you want to own in your life—your house, your car, your bed, your wine cellar, your vacations, and so on. It’s going to save you hundreds of thousands of dollars over your lifetime.
Tip #4: Serve Others.
Here’s another unfortunate epidemic sweeping America—it has fast-growing cities, but those cities have dying communities.
Communities all over the country are falling into disrepair, disunity, and crime simply because of culture. We expect our kids to move out, go to college, and then make a life for themselves in one of the big cities. Meanwhile, the communities they grew up in get left behind. It’s a brain drain on a local level, but it’s happening all throughout America.
That’s why my fourth piece of advice is to start serving others, starting with your own community. Want to donate to charities? Want to support soup kitchens and retirement homes? Want to fund your church’s activities? Charity begins at home.
You don’t need to donate a LOT of money—even just 5-10 percent of your monthly income will go a long way for your community. In return:
• You’ll find yourself living in a better community
• You’ll foster in yourself an abundance mentality
• Your higher power will pay you back with interest down the line
Tip #5: Get Enough Insurance.
Did you know that getting enough insurance is actually a higher priority than having emergency savings and a retirement fund?
Here’s why: ultimately, your goal is to be self-insured—that is, for you to have enough money flowing into your life via your businesses and investments that you and your loved ones will be able to weather whatever financial storms come your way.
The challenge? For most people, it’s going to take years or decades to reach that point. Sadly, many people never even reach it in their lifetimes.
That’s why you’ll want to get enough insurance first. That way, when something happens to you, your family will get enough money to invest and live off the dividends for the rest of their lives.
So, in case you haven’t done so already, secure your income first…then get enough insurance second.
Tip #6: Invest in Your Health.
Lastly, what’s more important than wealth?
You guessed it. It’s health. And the mistake many men make is to sacrifice their health in their pursuit of wealth.
Don’t YOU mix your priorities up! Invest in your health: buy better food, cut back on junk food, commit to a home exercise routine, and so on.
When was the last time you had a complete health checkup? It’s a good way to know which areas of your health you need to work on first. Once you know, invest right away…because no matter how rich you get, you can’t enjoy it if you’re sick!
To the New Year, and All Your New Years to Come.
If you’ll notice, the tips in this article aren’t just meant to help your finances this year; they’re meant to help your finances for all the years of your life. Now’s the best time to start, so get off the Internet and get right to work!
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