Navigating financial waters is never easy, especially when you’re young. The good news is the more you absorb the tricks of the trade the better off you’ll be. Someone said a fool learns from his mistakes but a truly wise man learns from the mistakes of others. Seeing as though it’s a prerequisite for personal finance gurus to go through the tough times before they accumulate invaluable knowledge on the subject, you can be the wise man by learning from the knowledge of the best money gurus of today. Here are five pieces of advice from some of the most notable personalities in the world of finance.
Best Money Advice
“Pay yourself first.” – Wayne W. Dyer
Motivational speaker and author of “It’s Not What You’ve Got: Lessons for Kids on Money and Abundance” suggests a simple philosophy to saving. While Dyer was in the Navy, he managed to save 90 percent of his earnings over 18 months. He was able to afford tuition for four years of school and a new car. His quote reflects our tendency to pay others when we get paid instead of spending the money on the person who benefits the most—you. Instead of spending your earnings on superfluous purchases and substantive external investments, invest in yourself right away.
“Hire a registered life planner.” – George Kinder
I’ve spent countless hours wondering if I’m missing out on better opportunities to invest. It is the job of the financial planner to elicit from the client what is meaningful to them, and Kinder believes this surrender of personal control allows you to keep your eye on the prize. You can’t do it yourself, and a registered professional will help you identify and reach your life goals. Those who don’t seek additional help lose the opportunity to step outside of themselves and gain perspective. Once you are financially equipped to afford a life planner, their expertise will take the reins—while you remain focused on your career and family—to get you closer to what is most important in your life.
“There’s good debt and bad debt.” – Robert Kiyosake
Examples of good debt include buying a home, financing a car, and paying for college. The average American has a credit card debt of $8,000, which gives the very idea of debt a bad name. And for good reason—if you charge more than you pay or max out credit cards, it will have a negative impact on your credit score. Kiyosake asserts a good debt is an investment that creates value, while a bad debt is likely the result of paying for something with a credit card.
“Slow and steady wins the race.” – Dave Ramsey
Nationally syndicated radio host and personal finance author Dave Ramsey recalls the lesson of The Tortoise and the Hare. The tortoise wins because he is consistent, focused and modest. The get-rich-quick schemes never work, and if you try to impress other people you will lose the wealth race. When you spend too much time observing what other people are doing you lose sight on what you want to accomplish.
“Frugality isn’t about cutting your spending on everything.” – Ramit Sethi
Instead, Sethi says, “Frugality, quite simply, is about choosing the thing you love enough to spend extravagantly on—and then cutting costs mercilessly on the things you don’t love.” The author of “I Will Teach You To Be Rich” lays out a new approach to frugal practices. The same principle applies to dieting—instead of starving yourself, consume only what you need. Write down a list of things you love and a list of the things you don’t love. Tell yourself you will never spend on things you don’t love. This will immediately cut costs because you won’t needlessly spend on things that don’t immediately benefit your life.