Pattie Lovett-Reid: Strategies for ensuring the financial well-being of your future self
No one will care more about your financial future than you will.
I’ve often heard people say, “If only someone coached me earlier on in my life, I would have started to invest earlier. It wasn’t a priority then. I had time on my side.”
The challenge is time slips by in the blink of an eye. Ask any parent who wakes up and suddenly realizes they are a grandparent and wishes they had the wisdom of today that a 30-year-old can't begin to comprehend.
Here are a few strategies to help you avoid sabotaging your financial future:
- Recognize the sooner you increase savings and downgrade lifestyle choices, the sooner you will develop good habits that will serve you for a lifetime. I’m not suggesting you don’t enjoy life, but make sure it’s balanced.
- If you paid off your debt, don’t wait to invest. The sooner you invest, the better, as it will allow time and compounding to work for you. Extended periods of investing coupled with years of earning income on top of income can help to secure a very nice financial future. Investing takes time and patience.
- Starting the investing process is half of the battle. Make the effort to understand diversification and market efficiency and then come up with some simple rules that work for you. Billionaire investor Warren Buffett, for example has stated, “If I cannot understand it, I will not invest in it.”
- The younger you are when you invest, the more time you have on your side. This also suggests you can take on a little more risk. I appreciate it is hard for a first time investor to see a paper loss. The true message here is to buy quality and recognize $50 today will not buy you the same basket of goods 30 years down the road given the impact of inflation. So you have to ensure your money is working for you. If your money sits in cash, you will be losing money after taxes and inflation. That is one sure way to sabotage your financial future.
- You have heard this quote before – “a goal without a plan is just a wish.” This is so true in all elements in life but especially true when it comes to your financial future. Wish all you want for financial success but it won't happen without goals, a plan and investment strategy.