I’m gonna spare you a spiel and get right down to these 7 money moves you must master if you wanna turbocharge that wealth of yours! Which I suspect is all of us!
#1 It’s not how much you earn
We think that to be rich we need to be earning oodles and oodles of dosh. Well guess what, 36% of America’s high earners are living paycheck-to-paycheck (read all about that here – and how to make sure that’s not you!). So now you see more money isn’t always the solution to our problems!
More money will magnify your habits. If you’re a serial saver, more money will mean you save more. Invest more. But if you cannot stop spending having more money will mean that your shopping habits will become way more expensive. And so you’re practically right back to where you started.
The goal should be to keep as much of your earned income as possible. The higher that % the better off you’ll be. And it all starts with controlling your desires and stop moving that goal post! Resist the urge to give your lifestyle a whopper upgrade just cuz you got a pay rise.
First work on your money habits. Then start work on boosting your income. Hint: the first one’s 10000x easier to achieve.
#2 Budget to live your best life
Budgeting is a funny one. We think (or at least I did till very recently!) that budgeting is all about the nitty gritty. That it’s about less. Spending less and living less! But that was because I’d been approaching it all wrong. Read here how you can add bling to your budgeting to make sure it isn’t sooo boring.
Money will disappear faster than I can run to grab a bar of choc. And if you don’t tell your money where exactly it needs to going to, it’ll end up in all sorts of places. Most likely in the hands of retailers! Am I right or am I right.
Budgeting is how you send your money to where it must be going. And there’s a really great rule for this. You split your salary into 3 buckets: 50-30-20. You spend 50% of your income on needs (rent, food, the basics), 30% on wants (shopping, eating out travelling) and 20% on savings and investing. If I’m honest with you, the bigger your third bucket, the better off you’ll be. So shrink buckets 1 and 2. If you can.
This allows you to spend on yourself and more importantly on your future. Or, something I quite like doing is having a guilt-free spending fund. Every month I drip feed some money into this pot and when I feel like splurging I dip into it. Guilt-free!
#3 Pay yourself first
This one is my fave. And something my dad told me way back. When he’d get paid each month instead of paying his bills like mortgage, utilities and all the other nasties that eat into our money he would pay himself first. He would transfer money to his investment account. That was his #1 priority. He would then work hard the rest of the month to make sure he could his other obligations! (Read here what’s the 1st thing you should do when you get paid to live a live of freedom)
But he never invested his leftovers. He made investing his main meal. And we often leave investing till the last because our priorities are wonky. You come first. Your future comes first. And the sooner you appreciate that, the sooner you’ll be chucking all you can at it!
Most of us spend first, pay our bills second and save/invest last. But we’ve got it all wrong! Invest first, pay your bills next to make sure you don’t run dry(!) and then spend what’s left. This is how you’ll get from where you are to where you wanna be.
You deserve to get paid first.
#4 Your personal money boardroom
This one’s a funny and also-pretty-darn-useful one. When we think of growing our net worth, we think of doing it all by ourselves. That we basically just need to invest as much as we can, make smart decisions with our money do a whole bunch of other stuff and voila, we’ll get to where we wanna be. With our money making that all possible!
But I like to think of your money journey as something that you shouldn’t necessarily want to – or should do – alone. Imagine how much money we could save if we learnt from other people’s mistakes? And not just any old person, someone who knows us well and has done it before.
Pick your people who you want to be part of your personal money boardroom. These are people who you’ve come to know that have “made it” (psst: that’s different for everyone btw) and who you can learn from. These are people you can talk to about anything whether it’s looking at what’s stopping you from hitting your money goals or how you can navigate this bear market! And all else in between.
Think of this bunch as your money helper. Your sounding board when things go wrong. We all need a little hand-holding every now and then!
#5 Now versus later
We all think we have tons of time ahead of us. And Gd-willing we will. But time flies. And we underestimate how much our money can grow to. (Gen Z are pretty savvy if you ask me. We’ve made this 1 financial goal a top priority leaving us $33k better off. Read what that is here). I did some math and found if you invest £5k now and chuck it in your pension (not a bad place to start!) you’d be left with £163k!! This is no typo. Assuming a growth rate of 7% each year btw.
Compounding is mental magic. But we often don’t really appreciate how big it can grow so we delay things like investing in our pension because we think it’s the problem of another decade. Psst: read here why you must think about your retirement now not in 20yrs time!
But it’s so much easier to save now than later down the line. And you wanna give your money the biggest chance at growing the fattest belly ever. And that’s only gonna happen if you inject with years and years and years.
So think twice before you delay investing for your future. It’s just time that it really needs.
#6 Don’t get too distracted
Distraction is the enemy of progress. And nothing’s worse than money distractions. We can get so carried away with fancy clothes, shoes, cars and whatnot that we let ourselves get sucked into the money trap. Nice things are great – you should treat yourself to them every once in a while (case in point: turn to #2!) but if you overdo it you’ll literally be eating into your future.
And what’s worse is you’ll soon be upgrading your lifestyle without you even noticing. What was once a luxury now seems like something basic. So you’re having to work harder just to keep up with your ‘basics’. The sooner you stop raising your expectations as your income rises, the sooner you can be on the path to freedom. Real freedom.
So focus on impressing yourself to be richer – and happier. Everyone else is too busy living their lives, as they should be, to really truly care what others are doing. The Joneses don’t care nearly as much as you think (or wish!) them to. That should be comforting btw!
#7 Just keep buying
This one’s probably the most important – so I left it last to leave an imprint on your brain!
I recently wrote a blog about this – you can read the full-on spiel, here. Basically, I was meandering about Waterstones when I not-so-stumbled into the biz + finance section and found a book called ‘Just Keep Buying’.
I immediately got hooked and realised that was all we needed. Just keep buying. The world is gonna keep on growing, tech helps ect ect the system will not fall to its knees (okay maybe it will, ha!) but everything recovers. I know it doesn’t feel like it, but it will. If you have the courage to keep buying, no matter what everyone else is saying/doing.
There’ll always be another crisis (funny how we’re kinda in one now!) everyone’s moaning about and even when there isn’t a crisis they’ll find something to scare you about. Because that’s what sells. Fear. But if you Keep on Buying, that’s the surest way to get rich. Buy when stocks are high, low and in between. Cuz you cannot time markets no matter what you think!
On that cheery note, happy wealth-building fellas!
Disclaimer: This blog is not investment or financial advice. It is my opinion only. This blog is not a personal recommendation to buy/sell any security, or to adopt any such investment strategy. Always do your own research before you commit to any investment