rule of personal finance

K.I.S.S. – 8 Personal Finance Tips

Henry Basics, Financial Education, Thoughts of a Mastermind

THIS POST MAY CONTAIN PAID AND/OR AFFILATE LINKS.

KEEP IT SIMPLE STUPID! Have you heard that one before?

For many people and their finances… it definitely does not seem the case…

For fun, here’s a list of some financial terms:

Mortgage, Home Equity Loan, Personal Loan, Fiduciary, Net Worth, Credit Score, Interest, ARMs, HELOCs, Credit Cards, Assets, Debt, Currency, Inflation, Deflation, 401k,  CDs, Taxes, Retirement, HSA, Pre-Tax, Budget, Income, Expenses, Savings. Fixed Income, Bonds, Roth IRA, Traditional IRA, Sub-Prime, Asset allocation, Dividends… the list goes on and on!


Here at The Mastermind Within, we stand on the shoulder of giants. We want to apply other successful people’s thoughts and ideas to make ourselves and our readers more successful. Below is a list of 8 personal finance tips for keeping it simple stupid.

“An investment in knowledge pays the best interest.” – Ben Franklin


Top 8 Personal Finance Tips

  1. Ask Yourself The Right Questions: What are your goals? What kind of lifestyle do you want to live? What do you love to do?  Do you want to travel around the world?  What about spending more time with your family? Do you want to spend Minnesota winters in Florida?  Do you want to go to the Super Bowl?  Would you want to eat out every week?  Do you want to start your own business?  What about retiring at 45, 55, or 65?  Do you want to pay for your children’s college?  What is my relationship to money?   Personal Finance is just that… it’s personal. Know what you want.  Ask yourself the right questions!
  2. Write SMART Goals to address your situation.  
    1. Specific
    2. Measurable
    3. Attainable
    4. Realistic
    5. Time Frame
  3.  Create a planWork Backwards From Your Goal: Once you can ask yourself the right questions, then you can start to work backwards!
    1. Make a list: What is the smallest actionable item you can do getting to your goal?
  4. Apply the Rule of 72 for Compound Interest-The approximate amount of time it takes for your money to double at a certain interest rate (how much you are paid for a loan of your hard earned dough)
    1. 72/ X = Years to Double.  (X = Interest Rate)
    2. Example: Jenny has a $1,000 CD in the bank that yields 4% (compounding annually)  How long will it take to double?  What about if the interest rate is at 1%, 10%, or 20%?
      Interest Rate1%4%10%20%
      Years to Double72187.23.6
  5. PAY YOURSELF FIRST: The Power of Savings – What do you need to save monthly to achieve your goal?
    1. Save at least 10%
    2. You work hard – make sure to pay yourself first.
  6. How to invest savings? – Reduce your FEES and Finance charges.  I promise you there will people who will happily take 5% of your money to invest your funds.
    1. Basic 401k / Investment Portfolio  (my simple opinion)
      1.  Index Funds
        • Benefits: get exposure to entire market and LOW COST (Index Funds are the way to go!)
      2. Dividend Stocks/Real Estate/Bonds (Passive Income)
      3. If you are employer has a company 401k company match, get the match; it’s a free 100% return that will grow.
    2. Find a Fiduciary to help you – they are looking out for your best financial interest, not their own.
  7. Continue your financial education
    1. Don’t be afraid to ask questions!
    2. Seek people who have accomplished what you want to accomplish – Stand on the shoulders of giants!
    3. READ!
      • Personal Finance and Self Improvement Blogs, such as:
    Take Your SuccessMustard Seed MoneyFreedom 40 PlanPicky Pinchers
    Life and My FinancesFinancial SamuraiBe Net WorthyFinancially Alert
    Making Sense of CentsPenny and RichESI MoneyMoney Boss
    Dividend LifeBuy, Hold LongEpic QuiverGo Finance Yourself
    Gen Y Finance GuyBiglaw InvestorThe Frugal FarmerAbovare
    Simple Money ManInvestment HuntingFull Time Finance1500 Days
    Freedom is GroovyCash FastingThink Save RetireDebt Discipline
    Dirt Road DaisyPennies and DollarsThe Green SwanMama Fish Saves
    • Personal Finance Books such as:
      • How to Think About Money (book review)
      • The Richest Man in Babylon
      • The Millionaire Next Door: The Surprising Secrets of America’s Wealthy
      • The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich
      • Money: Master the Game (book review)
      • Think And Grow Rich
      • The Intelligent Investor: The Definitive Book on Value Investing.
      • How to Win Friends & Influence People
      • Rich Dad Poor Dad
  8. Change your attitude about money
    1. Money does not make you happy.
    2. All you control in life is your attitude (this is true in all things, including money)
    3. Tithing – be charitable with your wealth.
      • What is a rich man who hasn’t used his riches to positively change the world? He is truly poor.
      • For you selfish people… Ever heard the phrase “You reap what you sow”? It’s true.
    4. Be successful in your relationship with money.
      • Success is the freedom to do what you want.

This is a quick overview of personal thoughts regarding wealth and money. I am not a licensed professional, but do stand on the shoulders of giants.  There will be more personal finance advice to come, including an financial eBook for our subscribers!

Please reach out with any specific questions!

What books or resources were helpful in your financial education?

Erik

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