There is no point being a successful entrepreneur, or selling a startup if we have no idea how to handle the money we get. So here is my top 10 financial life hacks.
- Spend less than you earn, no matter what that amount is. The net result is happiness.
- Allocate cash to savings & investments before anything the day you get your profits, pay or dividends.
- Never go into debt for anything which does not appreciate in value.
- The real definition of an Asset: Anything that puts money in your pocket. The accounting definition of an asset is flawed.
- Do not trade stocks. Trading makes the broker and tax man rich and you poor.
- The greatest financial instrument is ‘compounding’. It only happens when we hold assets, not by trading them.
- If you can’t afford a consumer product in cash, you can’t afford it.
- There is no such thing as ‘financial engineering’. It was invented by Wall street to trick you.
- The best type of share investment is an Index Fund. They are investments in civilization. If that fails, we have bigger worries than our money.
- Invest more in education than entertainment & ‘things’ and you will outdo society financially.
The title of this post is a philosophy I have. People often disagree siting financial hardship, opportunity, income, age… you name it. They can argue all they like but it is true. People who look after themselves, have pride and a solid work ethic have nice cars. Not necessarily expensive cars, but cars which are washed regularly, are tidy inside, and don’t have any obvious dings or fractures which are to be fixed.
Keeping a clean car doesn’t really cost any money, just a little bit of time and effort. In fact it usually saves people money, just like servicing a car does. Sure, cars get smashed, need repairs and are generally a necessary expense and not an asset. But like all things, delays in making it right will have a compound effect. Dints which aren’t fixed get rusty. Unserviced cars break down more often. Trying to save money letting your car go, just costs money in the long run. People with unbroken lives know this. It also has an important impact on your own self worth and psyche. Not to mention other peoples opinions of you, rightly or wrongly.
Show me an adult with a broken car, and I’ll show you a person with a broken life. (students are the exception)
Below is a classic example. Both cars of similar style and age. The first is owned by a person with a broken life, the other with by a person with a great attitude.
Do the test for a week or two. Assess the people you know and the state of their vehicle. It tells a very clear story.
Startup blog says take pride in all you do and all you own and your life will be better.