Sometimes when someone gives you a piece of advice, it just resonates and almost creates an imprint in your mind. I know I have gotten some advice that even though I didn’t want to hear or believe, I just couldn’t shake it because deep down I knew it was true.
The recent issue of Money has a great article with over 30 well known people contributing their best pieces of advice they’ve received. I really agree with a whole bunch that were listed. And these are my favorites….
The best advice
1. Live within your means.
The simple basic rule of personal finance: spend less than you earn. As Dave Ramsey says, “it isn’t rocket science.” It is such a simple thing, but yet so few people successfully pull it off. If you have successfully done this, you know the freedom that it brings. If you haven’t you are probably aware (or you will eventually become aware) of the struggle that results from it.
2. Be frugal, but not stingy.
John Wesley said, “Make all you can, save all you can, give all you can.” Practice developing your generosity.
3. Do what you love.
This is one that took me a little while to learn, but is worth learning. For everyone who trades hours for dollars in a job they don’t enjoy – you know how painful it can be going to work each day just to get a paycheck. There is more to life than money, I would take a job that pays less over one that paid more that I didn’t like any day. How about you?
4. Money doesn’t make you happy.
If your career is tied to what you love to do rather than how much you can make at it, you are probably a lot more likely to make more money at it. Ironic, isn’t it. I know that isn’t always the case, but life is too short to spend most of it doing something you do not enjoy!
5. To excel at something, immerse yourself.
Dabbling in somethings doesn’t make you an expert. In order to become truly great at something, you have to live, breath, think, and dream it. Find every book you can read about the subject, start doing what they say, and teach others about it. You retain the highest percentage of what you learn when you share it with others.
6. Don’t get too good at the wrong stuff.
I have done a lot of reading about people who have accomplished great things. This seems to be a common thread that runs in all of them. They focus. There are so many distractions, so many good things that you can do. Those who accomplish great things do not focus on the menial things that can suck up all their time, but they focus most of their time and energy on that which will produce the most and best results.
7. Take risks when you can.
Take calculated risks. Do everything reasonable you can to minimize the risk, but don’t be afraid to take a risk. It is okay to make mistakes. Human beings are designed for this. Life is just too dang boring without them.
8. Tap the power of compounding.
Albert Einstein said that compound interest is the most powerful force in the universe. This is a perfect reason to get started investing today and put it to work for you!
9. Don’t save too much.
Life is about balance. God gives us our daily bread and Joseph was instructed to save for the 7 years of famine. Saving should be part of your financial plan, but you shouldn’t put off all your living until you retire.
10. Don’t follow the herd.
I used to think that there was some safety in doing what everyone else was doing. The more I learn, the more I find areas that I want to do the opposite of what the herd is doing.
11. Develop a healthy skepticism.
This has worked hand-in-hand with the previous piece of advice. You should never let your skepticism keep you from opening your mind to new possibilities, but you also should not be naive.
“The naive believes everything, but the prudent man considers his steps.” Proverbs 14:15
12. Ignore short-term market swings.
The stock market, housing market, U.S. dollar, economy all goes up and down. Each time people are saying, “but this time it is different.” It’s not different. It might have a different mask, but it is the same underlying pattern. Just close your ears and wait and as you ride out the storm, you will be sitting pretty when it is all done.
This article was included in the carnival of personal finance
{ 5 comments… read them below or add one }
These are great, but I would also add be patient: If you’re trying to turn your finances around after years of mismanagement, settle in for the long haul. Also, be persistent: Things will come up or as Dave Ramsey says, “Murphy will move in.” You’ve got to pick yourself up, dust yourself off, and charge ahead.
@James
yep, I wish it wasn’t that way… but you are right, if you spend 10 years screwing your finances up, it isn’t going to be fixed over night… But you might as well start taking steps forward, no reason to keep walking in the wrong direction…
@D4L
I am with you completely – I have been a dividend investor since I started… that is where the big longterm money is…
Isn’t it really hard to spend less than a minimum wage income?
@Broke
yea, I would say that it is… if you are in that situation, you should put all of your energy into becoming the best worker possible at your job to get a raise. Prove to your boss (with your hard work) that you are worth more than minimum wage