I recently read an article about Advisors who have been in our profession for the past decade and some of the financial lessons they have learned. This article was in one of many Investment Advisor magazines that come across my desk. It seems like I get them daily. Anyway, it was interesting to read what people who have 10 years under their “belt” have learned and what advice they would give out. It got me thinking, what has someone like me, who is approaching 20 years in the financial industry, learned over the past two decades, what financial lessons have I learned and what advice would I give to others?
Pay Yourself First
I would say that if you paid yourself first you won’t be able to stop yourself from reaching your goals. Put money into your RRSP, TFSA, Savings Plans, Health and Life Insurance, pay your mortgage bi weekly and you will be shocked in 20 years how little you owe and how much you own. Everyone knows the 10% rule; pay yourself 10% of your earned income. Most people don’t but if you followed that simple rule you would be wildly successful.
Related article: Pay yourself first to save money
There Are No Shortcuts. It Is Hard Work.
There is no easy way to save for your future and there is no easy way to get rich. If there was we all would be doing it. It is hard work, sacrifice and patience that lead someone to their financial goals. Over the past 20 years the people that I have come across that would be considered successful all have these same traits:
- They are focused.
- They have a plan.
- They have patience.
- They are informed.
- They know that there are no shortcuts.
- They carry as little bad debt as possible.
Related article: Take control of your money
Use Professional Help and Keep Yourself Informed.
Many of the products that Advisors sell can be purchased on your own. At some point the consumer needs to ask someone questions. It may come down to the help of a professional to get good advice. If you are looking for a good advisor, ask your good friends and neighbours who they recommend. Many people sit down with an Advisor to help direct them in the future. There is also no reason for not keeping yourself informed. The internet, newspapers and magazines are always loaded with information on financial planning. Not all of it is accurate but you can take that information to your advisor and ask their opinion.
Related article: What to look for in a financial advisor
People who review their portfolios regularly are rarely caught off guard with market changes or life changes. Whether it is once per year or 4 times per year you must review what you have so you know where you are, where you are going and how you are going to get there. By reviewing on a regular basis you will also stay up to date on products in the market place that may be of importance to you. At least you will have the information.
Related article: How to review your investment portfolio
Retirement Can Be Fun But Can Be Stressful.
Retirement can be both an amazing time of life and stressful. At some point in the future there will be no more paycheques coming in from work and only money going out from RRIFS and other investments. That can be stressful for some but with regular reviews and knowing where the money is coming from and how long it will last, the stress can be elevated greatly.
Related article: 3 Steps to a retirement plan
These are just some of financial lessons I have learned and observed over the past 20 years. It goes by very fast. Enjoy it.