More likely than not, you’ve received a lot of advice over the course of your life. You’ve gotten advice on your education, your career and even your relationships and while some advice is helpful, most of it is not. Now, I’m no different. I’ve received great advice from very wise people and some suspect advice from lesser parties and now I want to share with you the financial advice that changed my life forever because it may just change yours!
Over the course of my life, I have been blessed with having very supportive people around me. I grew up with great parents, a loving family and friends and mentor that helped me shape the success I have achieved up until this point in my life. And each of these groups of people have bestowed upon me their best advice which I of course took to heart. For example, my parents always pushed for me to get the best education possible so that finding a job and having a reliable stream of income would never be an issue for me. They told me that this investment would help me live a financially prosperous life and so I listened to my parents and obtained multiple degrees and diplomas in order to position myself for career success.
While this advice did get me a job, it certainly didn’t allow me to achieve any measurable amount of wealth. In fact, even with more education than my peers, I was making roughly the same amount of money with double or even triple the investment. It was at this point that I began to wonder whether the advice my parents had given me was right. So, for a while I contemplated why my parents would lead me astray and then it dawned on me that their advice wasn’t wrong, it just lacked a greater awareness. What I mean by this is that they were not aware of how wealth is truly built and so they could only offer me advice based on their own life experiences. In fact, it was only when I began to spend time with people who had accumulated significant wealth over their lifetimes that I truly learned how I could personally begin to build my own fortune. Here are the 5 best pieces of financial advice from my mentors.
Number 1: You’re Responsible For Your Financial Success
Before I get into all the other pieces of advice that have shaped my own financial success, I want to make it known that holding yourself, and only yourself, responsible for your financial prosperity is the key that unlocks the potential of all the other pieces of wisdom. You see, so many people blame their financial struggles on others. They say that their parents never taught them how to manage their money or that they’re poor because the government taxes them too much but neither of these excuses, or any excuses for that matter, will help you achieve true wealth.
Now, I too was in this position for a short-time. I was resentful towards my parents because their life path of getting good grades and securing a job didn’t pay off as much as I was led to believe it would. Even at my job, I was upset that my employer wouldn’t pay me more than they already were. But then I realized that my financial success wasn’t their issue, it was mine and this realization led me to educating myself on how I could build new income streams and break out of my financial rut. Now, for many, this is hard advice to accept. It’s so easy to place the blame on others but I can promise that doing so will not lead you to be rich and that the effort you need to put in to achieve true wealth will be worth it in the end!
Number 2: Self-Investment Is The Best Investment
The single best investment you can make is in yourself. Warren Buffett says it and so have all the mentors I’ve been lucky to have in my own life. This advice is especially true when you are younger as you’ll get the benefit of the education for longer. Think of it this way, who is going to benefit more financially, the person who becomes a lawyer at age 72 or age 22? I think the answer is obvious. And it’s not just formal education or degrees that I’m referring to. Invest in yourself can mean anything where you are learning and growing. It includes reading, taking online courses, getting certifications, or even things like personal development programs. You are your best asset. The more you can invest in yourself the more valuable the asset becomes. For instance, what if you took an online course on how to build a freelance business from scratch? You could benefit from this knowledge for decades to come! In short, find ways to level up and in time you’ll be able to make money at will.
Number 3: Take Bigger Risks
One of the biggest reasons people never accumulate the wealth they desire is because they are too afraid to take risks. In fact, chances are in you’re not where you want to be financially then you are playing it too safe. You are too worried about potential losses when you should be calculating the risk reward trade off of making more financially powerful moves.
And financial risks doesn’t just mean investing money in the stock market. While almost half of Americans do not invest in the stock market, many more are avoiding lucrative opportunities due to their personal risk aversion. For instance, they may be stagnant in their career because they are too scared to make the move to a new company or enter a new line of work. For others, their hesitancy may relate to quitting their job to take their side hustle full-time. Either way, it’s easy to fall into the trap of avoiding risks at all costs but you have to ask yourself if staying where you are monetarily is a better fate than taking the leap in progressing forward in your financial life. You don’t want to be one of those people who say, “When I was younger I wish I would have done this or seen that” Take the risks you need to now so that down the road you can benefits from the rewards these risks can offer.
Number 4: Find Your Own Balance
You hear it all the time, the key to happiness in life is to have balance, but what is balance exactly? I used to aim for balance until I realized I was getting mediocre results in everything I did. For instance, when I first tried to make money online I split my attention between a handful of different business ideas. I tried to flip books online, dropship and even run an Instagram business. However, none of these ideas panned out because I never mastered any of these domains since I was trying to manage all three. This is why balance, as most people think of it, is a joke and it will cost you dearly.
Instead, commit all of your time, attention, and energy to one project or goal, make significant progress, and then shift to another project or goal. For instance, when I started my YouTube channel, after having failed in all my other online ventures, I promised myself that it would be the only platform I would focus on for the next year. Well, one year has turned into three and now I am making an appreciable amount of money from this platform but it’s because I didn’t try and find a balance and went all in. I only bought courses, paid for consulting and produced content around YouTube which allowed me to gain enough knowledge to grow this channel to the size it is today.
Sure, this meant that at times I had to neglect other aspects of my life but I was okay with this because I knew it was temporary. In fact, I went through this same experience when I was studying for my CPA exam. I took off two months during the summer to study for my exam in September and would routinely have to turn down parties and other social outings. Unfortunately, this is the price of success and if your family and friends truly care about you and your well-being then they will understand.
Therefore, avoid the common advice that your life has to be perfectly balanced. How you allocate your time should be directly related to the goals you want to achieve. If this means building an online business then you may have to focus less on school, family or friends. If your goals is strengthening your relationship with your family and friends then having a lifestyle that allows for the quality time this goal will take is key to your success.
Number 5: Keep Your Expenses Low
When it comes to financial advice, I always advise that you keep your expenses low. I know that buying a new car or phone is exciting but I truly believe that keeping your day to day costs as low as possible has great value. The reason, is that keeping your expenses low provides you with one of the most valuable things on earth, freedom.
You see, many people allow themselves to fall victim to lifestyle creep where they begin to spend more as their income rises. They justify to themselves that they have been working hard and deserve to spend their newly increased income but this mentality leaves them in the same (and sometimes and even worse) financial situation than before they ever came into more money. And as soon as you start taking on more commitments like a new car lease or an inflated mortgage, you begin to restrict your ability to be free and this is very important. For instance, if you are living paycheck to paycheck and are hit with a major house repair, you may have to go into debt to cover the cost which can lead to an ongoing debt spiral and thousands of dollars in interest fees.
Alternatively, if you are no longer loving your job but have too many financial commitments to cover every month, you may be restricted in changing roles even though doing so would make you infinitely more happy. Now, avoiding financial commitments isn’t totally avoidable but taking on as many month to month expenses over long-term commitments is advisable. Also, spending well below your means allows you the ability to save money that can grant you this leeway if you decide to make a major life change. Especially if you’re young, there will be plenty of time to be saddled with responsibilities, but when you are young, you want flexibility. Do this effectively, and you’ll have much nicer cars, houses and less financial stress in your future!