Tried And True: 3 Pieces Of Advice To Live By
It would seem that everything in life gets a comment. Our love lives, our jobs, the state of our finances. And- to make things even more frustrating- the comments, advice, warnings, congratulations are usually completely incompatible. You’re either a brilliantly independent person or being left on the shelf. You’re a sound financial planner or someone unable to take risks. So, in the midst of the maelstrom, here are three pieces of advice from the Barefoot Investor that should steer you truly.
The Buffer
Things often go awry when you’ve got no slack in your finances. A friend of mine works in a bank and she has the delightful job of ringing people and hassling them for mortgage repayments. And things at the moment aren’t so great on that front. Why? Probably a myriad of factors, not least being that people invest in houses they can only just afford. So when something changes- the business starts making less money, you lose hours at work, interest rates rise, they’re stuck. While risk and investment is a great thing, living without a financial buffer could cost you a lot of money if you have to rid yourself of assets at the wrong time. Similarly, a financial buffer for your everyday will leave your finances protected should emergencies happen.
Spread Yourself
Yep, yep, we know. It’s a surefire hit, a guaranteed winner. Of course it is, there have been millions of them. And while you might be tempted to put everything you’ve got behind it, chances are it will be the worst decision you’ve ever made. At the base of it is a disinclination to get yourself somewhere at a steady pace. Financial security starts now, but can take time. Chucking everything behind one endeavour smacks of impatience. So chillax, protect yourself and your finances from over-exposure in any one area. It’s suggested you want to be relatively well-covered across cash, fixed-interest, property and shares. Most importantly, you want to be continuing to save as you go and ensure that you keep yourself updated on how all your assets are going. This isn’t to suggest you invest in something different every thirty seconds, more that you make sure you have reasonable exposure and haven’t leaned too heavily on one aspect of your investment.
Pay Down Debt
What could be a more tried and true measure than peace of mind? And what could feel better than knowing, whatever may come, you have the ability to be flexible with your finances? Or that you have a roof over your head that is yours and yours alone, come hell and high water? While we’ve all grown accustomed to debt, it’s not something that we have to live with. And if things turn nasty, chances are debt will be a massive encumbrance. While mortgages are one thing, paying down your consumer debt is a must. Find a repayment schedule that works for you and get on top of it. Use direct debits from your account, don’t add any extra debt to what you already have. Consolidate your debts onto one card. So no matter what comes, you’ll be ready.
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