Rich Or Poor: 5 Things That Can Make A Difference?
Liz Weston, writing in MSN Money, published an article of 5 ways to get rich… or to get poor and- surprise surprise- most things can send you either way. The article is a thought-provoking one, and inspired the list below. That said, what struck me most is that- with all the paths our lives can take, it is our ability to make good decisions and invest time, thought and effort that pays dividends, not the path we choose. I believe that hard work, discipline and perseverance pay off, and getting too hung up about the path our lives take to get there is counter-productive. But there are some life choices that could be beneficial for your finances. Read on.
Marriage
I don’t think marriage is really something you should do for financial reasons alone. Something about love comes to mind. But should you get married, there are potential financial benefits. A 15-year study of people, starting in their 20s, found people who married and stayed married built up nearly twice the net worth of singles, and there’s no real need to explain why. A shared household will always be a cheaper option. That said, divorce takes all that away just as quickly. Costly, messy and often leaving one or both partners in much reduced circumstances, it’s a financial, as well as emotional, disaster zone. As Weston says, marriage counselling can be an investment.
Home Ownership
Having a roof over my head is a big part of financial security for me, but it’s not necessarily the be all and end all of financial stability. As shown drastically in the US, ‘owning’ a home well beyond your net worth is a liability, not an asset. So crunch the numbers and ensure you have the money required and the flexibility to take a couple of knocks and increases over the course of your mortgage repayments.
Tertiary Education
Generally, having a degree is a pretty sound financial decision. While there are exceptions, people who have been educated at a tertiary level will earn more than their counterparts with a high school certificate. That said, you will lose a couple of good earning years and will incur a big debt to get there, so keep future job potential in the back of your mind when making the decision.
Self-Employment
Being self-employed is terrifiying. If something goes wrong, then there is you and only you to cope with it. The same goes, however, for profits. If your business is making money, you get to keep it. You also control the direction of the business and have the freedom to take on opportunities when they come your way. Yes, a lot of small businesses fail. About 10% annually. And there is a lot of work. But how is that different from employment? If you enjoy entrepreneurship and are willing to work hard, it could be for you. An important caveat is that having awareness of when to call it a day and not over-commit is an essential part of the skills set.
Choosing To Save
Of all the lifestyle decisions you could make, this will be the one to make the difference. People can save, irregardless of they’re on mega bucks or something quite modest. Choosing to save is not a matter of having lots of income, it’s a case of disciplining ourselves to live within our means and set aside money for savings. So, whether you’re married, divorced, renting, studying, working for the man, your choice to save will be the one thing that could assure your financial security.
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