rule of personal finance

K.I.S.S. – 8 Personal Finance Tips

Henry Basics, Financial Education, Thoughts of a Mastermind 13 Comments

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. Before the 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 Rate 1% 4% 10% 20%
      Years to Double 72 18 7.2 3.6
  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 (Vanguard Index Funds are the way to go! Check out Bogleheads (post soon to come))
      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 – Feel free to reach out and Work With Us!
    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 Success Mustard Seed Money Freedom 40 Plan Picky Pinchers
    Life and My Finances Financial Samurai Be Net Worthy Financially Alert
    Making Sense of Cents Penny and Rich ESI Money Money Boss
    Dividend Life Buy, Hold Long Epic Quiver Go Finance Yourself
    Gen Y Finance Guy Biglaw Investor The Frugal Farmer Abovare
    Simple Money Man Investment Hunting Full Time Finance 1500 Days
    Freedom is Groovy Cash Fasting Think Save Retire Debt Discipline
    Dirt Road Daisy Pennies and Dollars The Green Swan Mama Fish Saves
  8. Attitude about Money- READ THE RICHEST MAN IN BABYLON (Book Review to come)
    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 E-book to our subscribers!

Please reach out with any specific questions!

Would love to know of books or resources that were helpful in your financial education?

Henry

Comments 13

  1. You have a good list of books here. I’ve read several of them. My favorite that you might want to check out is Automatic Millionaire by David Bach. My dad gave me this book when I first graduated college and it helped shape my financial mind.

    Personal finance is really pretty simple. Spend less than you make and save a substantial amount of your income. The amount you save and where depends on your goals. As you stated, starting with a goal in mind is a must. You need to know where you want to end up in order to figure out how to get there.

    1. Go Finance Yourself, I’ll have to check out “Automatic Millionaire”. I swear, I should just quit my day job and read all day 😉 That’s awesome your dad has supported you on your financial journey. I’m lucky enough to have support from my family as well in terms of advice and willing to help when necessary.

  2. Awesome list!!!

    I especially love point #3.

    I found that building a financial bridge to reach your goals is the most important thing. It’s great to say I want to be a millionaire but if I don’t have a plan I’ve never going to get there.

    1. Post
      Author
  3. It’s not that complicated when you get down to it, but still people miss the mark. Goals and plans are ultimately the most I important imho. You can’t succeed if you don’t know where you are going.

  4. This is a solid list you guys have put together. If someone did just these things, they would be well ahead of the curve. I’m 4/8 on your book list; so apparently, I have some reading to do. The Richest Man in Babylon and The Millionaire Next Door are two of my all-time favorites.

    1. Hey Cody, you do have some reading to do 😉 haha just messing with you.

      To your point, that is the point! Being smart with your financials isn’t complicated. Thanks for the comment. Excited for your site coming out.

  5. Great tips! I’m partial to #3, #5, and #7. Having a plan is so important in the world of personal finance. It helps to keep you pointed in the right direction. You can say the same for financial education. It’s much easier to establish goals, come up with a plan, and execute that plan if you have some financial knowledge.

  6. #1 is excellent advice. As I’m trudging along in my debt free journey, I have realized that personal finance is extremely personal. There is no one size fits all answer. My family’s goals are far different than our neighbor’s. Also love the S.M.A.R.T. goal reference…I’m a scientist so that is something near and dear to my heart 🙂

    Thank you for listing such great resources also! I am going to check my library to see if I can find any of the books you’ve listed!

  7. Great list of rules, if I had to name one that changed our lives. Its got to be the wealthy barber’s – Pay yourself first. That was new info to me. Friday morning our chequing account looks rich, after coffee it looks average. haha

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