Money Management Is The Key To Success

It’s pretty clear at this point that birds of a feather tend to flock together. Every time I go to a baseball game, I see coaches who retired years ago. They want to see the game but more than that, they want to see those fellow coaches they have formed strong bond with.

Most people naturally gravitate to those who have the same values, interests, and social status. You might find that people who have wealth also stick together.

When I go to the country club to play golf as the guest of a buddy, I see upscale people there who are playing golf and having a fun time. The same is true for people involved in most any other activity outside of work that you can see.

On the subject of money, one of the hardest things I have ever tried to do is convince my kids, especially my son, that it’s important to save and invest their money. Because of this attitude, they spend most of their leisure time with people just like them, which is another way of saying, “Birds of a feather flock together.”

They seem to think they will live forever and there will always be a cashflow waiting for them to come by and grab. None of my children are destitute, but they would all be better off and have a much brighter financial future, if I could just get them to understand the principle of compound interest, regular savings and investing a good portion of their cash.

You must understand, I am not putting my own children down because I love them more than anything, but being older, and hopefully wiser, I know what is waiting for them down the road when they grow old and can no longer stand up to the physical demands of a job.

The reason I am so concerned is because they are still very young and still have time to begin a savings and investment program that will insure a bright financial future. It’s nice to have a little money saved for your golden years and you can take trips, go out to eat, buy the things you want and not have to worry about the cost of prescription drugs.

What brought this to mind is several good articles a reader from Mississippi, who is in the life insurance business, sent me the other day. One of these articles is titled “The Ten Commandments of Wealth,” and while only 10 sentences long, it is powerful. In fact, several books could and have been written on each one. I can promise you that this is solid information and regardless of your age, I hope you will take time to ponder and think about each of these Ten Commandments of wealth.

You might even take a pen and check them off one by one as you read and think about them. Here they are

1. Learn to invest and manage your own money

2. Test each investment with the acronym S-L-Y that stands for Safety, Liquidity and Yield

3. Have a financial life plan

4. Live on less than you earn and invest the rest

5. Learn the tax laws

6. Recognize that you are being defrauded by inflation

7. Keep a rough budget and know your net worth

8. Recognize the magic of compound interest

9. Always avoid a capital loss

10. You will achieve as much wealth as you believe you can

11. When it comes to investing your money, here are some suggestions:

12. Diversify your investments. Choosing a variety of investments is an effective way to reduce risks and pursue more consistent returns

13. Focus on positive long-term trends

14. Move your money wisely

15. Take advantage of professional management

This is where you need to get the advice of someone you know who is a successful investor. If you don’t already have a great financial future, I hope you will get started soon. Remember, it’s not how much you earn, it’s how much you save over time that will make the difference.

JIM DAVIDSON is a motivational speaker and syndicated columnist.

 

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