Throughout my life, I’ve received countless pieces of financial advice—some helpful, some questionable. In fact, much of the advice I’ve been given has been unsolicited, and some has been downright misguided. While it’s often well-meaning, not all financial advice is created equal.
I’ve certainly had my fair share of laughable advice. For example, I was once told that buying rental property was too risky, or that keeping a balance on your credit card every month would help build your credit. Some advice even came from professional sources, like the accountant who suggested I should invest less in my retirement because I was “young enough to wait.”
Fortunately, I didn’t follow the worst of the advice I received. And now, looking back, I can see how important it was to seek out sound financial guidance. Some financial truths have proven invaluable, and today, I’m sharing five of the most important ones that reshaped how I approach money management.
1. “Ride the wave while you can, so you’re prepared when it crashes.”
This piece of wisdom came from my friend Sam at Financial Samurai. We were discussing freelancing, blogging, and entrepreneurship when Sam pointed out that success can be fleeting. He reminded me to take full advantage of the opportunities available while they last because things can change in an instant. By “riding the wave” during the good times, I can build the financial stability I need to weather future challenges.
It’s a simple yet powerful lesson. When times are good, work hard, save aggressively, and build a cushion for when things inevitably slow down. This mindset has kept me focused on long-term financial security, even when success seems endless.
2. “Live below your means.”
This piece of advice came from my mom, and at the time, I didn’t fully understand its value. But now, as an adult with responsibilities, I realize how crucial it is to live within—or better yet, below—your means. Many people stretch their finances thin, using credit to appear wealthier than they are. However, living below your means allows you to save, avoid debt, and focus on what truly matters.
By living below our means, my family was able to purchase a modest home, even though we qualified for a much larger mortgage. This approach has given us the freedom to travel, worry less about money, and build wealth at a comfortable pace. It’s not about depriving yourself; it’s about prioritizing your financial freedom over appearances.
3. “Pay off your house as soon as possible.”
This advice, also from my parents, has been life-changing. My parents paid off their mortgage shortly after I graduated from high school, and it allowed them tremendous flexibility. They didn’t have the financial burden of mortgage payments, which ultimately gave them the freedom to make choices that many people can’t, like retiring early.
This strategy is one I’ve followed, and one of our rental properties is already paid off. My goal is to pay off our primary residence as soon as possible. Living mortgage-free will not only provide peace of mind but also ensure that we never have to worry about housing payments again.
4. “Don’t buy expensive, unnecessary cars.”
This advice came from my old boss, who lived a very comfortable life but drove basic, inexpensive vehicles. His reasoning was twofold: by driving modest cars, he saved money on something that didn’t matter, and he kept a low profile, avoiding attention to his wealth.
Cars are often one of the biggest financial drains, with the average car payment in the U.S. hovering around $500. By avoiding expensive vehicles, you can save significant amounts of money over time, which can be better allocated toward savings, investments, or debt repayment.
5. “If you live like no one else, later you can live like no one else.”
This quote by Dave Ramsey sums up a key philosophy that has helped me in my financial journey. The idea is simple: if you make sacrifices now—by living frugally, avoiding debt, and saving aggressively—you’ll be able to enjoy financial freedom and a higher quality of life in the future. This is especially powerful if you plan to retire early or want to enjoy the fruits of your labor without financial stress.
By sticking to this mindset, I’ve been able to build a solid financial foundation, focus on long-term goals, and secure my family’s future. The sacrifices I make today will allow us to live a more comfortable and secure life down the road.
Final Thoughts
Looking back, I realize that the best financial advice often goes against the grain. Many people spend their entire lives working to pay off debt and accumulating expenses, but by following these simple principles, I’ve been able to build wealth and achieve financial freedom at a pace that works for me.
It’s crucial to filter through the advice you receive and adopt strategies that align with your goals. With the right mindset and a few key financial truths, you can start building the life of your dreams, no matter your income level.
发表回复