What's the best financial advice (that actually worked) you've ever been given?

[dysondiver]

never say i when you can say we ,,, admit nothing , and sign less.

[VICI]

If you make $100k, live as if you make $70k.

Set up a direct deposit to a savings & investment account.

Dollar cost average.

Remember this - if you don't want to spend the time to learn about investing, there is a saying:

"If you think it's expensive to hire a professional, wait until you hire an amateur."

My best advice is to be interested in becoming financially stable and eventually wealthy. Learn as much as you can from everyone and every situation.

Ask as many questions as you can until you get direct answers, not 30,000 ft views.

[Brunotheboxer]

Pay yourself first.

[2106]

• Biggest piece of advice – find someone who has the same goals/priorities as you financially.
• Start saving early and start good habits early. It is no good saying to yourself that you will start saving money when you start making more if you have never actively saved. Saving/spending habits are hard to change.
• Pay off all debts as a priority (highest debt rate first).
o I don’t understand why some people invest when they still have outstanding debts. Remember debt is paid with post tax income so you effectively have to return the debt rate plus the tax rate for an investment to make sense.
• Only use credit cards for benefits of points or interest free periods, not to buy when you don’t have the money.
• Invest in things you understand. If you do not understand pay someone who does.
• Live within or ideally below your means.

[tkerrmd]

Hard work pays off

[VICI]

Hard work pays the largest dividends

[Scot_3]

Save some of what you make every week, and like so many others have said avoid debt and live on less than you earn.
For me biggest difference was driving older cars when all my friends drove new,
And a little luck in real estate hasn't hurt either.

[bdex75]

Most definitely, pay yourself first (after tithe that is).
We have always saved the max in our tax deferred accounts and lived on Mac and cheese if need be. There were things that we and/or our kids did not have because we did not have the money to waste.

And tax deferred compound interest is the 8th wonder of the world for the average investor who will be in a lower tax bracket at retirement. (We assume).


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[Mike_Templar]

Originally Posted by Baco Noir

Pay yourself first. Meaning build your 6-12 month emergency fund first, invest in your tax deferred retirement second, and keep increasing that until you reach the max. After that, the rest is to improve your std of living. The only debt we have is our mortgage and we can pay that on one salary if needed.


Sent from my iPhone and I blame autocorrect for any spellin' errs!

My issue with this advice is that I believe, more and more by the day, that these tax savings accounts will be raided. I don't think you'll ever see the money if you're under 40. If you're in your 50's, sure, worth it.

I'm very afraid of the future @ 44, which is a sad statement on the US.
I simply don't think the next 50 years will play out like the last 50, so the 'sound advice' of the past, is probably very dangerous now.

[bdex75]

Originally Posted by Mike_Templar

My issue with this advice is that I believe, more and more by the day, that these tax savings accounts will be raided. I don't think you'll ever see the money if you're under 40. If you're in your 50's, sure, worth it.



I'm very afraid of the future @ 44, which is a sad statement on the US.

I simply don't think the next 50 years will play out like the last 50, so the 'sound advice' of the past, is probably very dangerous now.

I am with you. Very afraid. Especially being on the higher end of the income scale, VERY AFRAID. Luckily we don't live like it, but still, no one wants their hard earned income raided to redistribute wealth to those that don't work as hard or at all.

We tithe religiously and are more than willing to pay our fair share. We just happen to disagree on what that fair share is.

Even if you look at the lame duck presidents 2016 budget (most of which will never make it into law) many of the tax advantaged accounts, while having future limits put on them (like max $3.4m in IRA's etc) are grandfathered in.

Some others, like some of the Roth proposals are absolutely sickening. Like subjecting Roth IRA's to RMD's. That would be worse than messing with social security payments to people that are already drawing. In my opinion.

There are a couple other zingers in there, like a mandatory 5 year force out of qualified money for non spouse benes. Essentially killing the stretch IRA.

I think that this debate about tax advantaged/ taxable now has merits on both sides of the table. I split my employer sponsored contributions to 50/50 401k/Roth 401k as a hedge of sorts. Giving up the current deduction is hard but hey.

What is interesting to me is the record number of people fleeing certain states (like we are getting ready to flee Illinois) as well as people renouncing their citizenship. As of August there were 1,577 people that just cashed out of the USA totally in 2014. That was a 200%+ increase. Bad news.


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[raclaims]

I think the best advice I ever got was from my father...and it was basically to avoid debt at all costs.

That along with paying off college debt really stuck with me and I try to live by that mantra.

[69mach351]

I will say avoid/pay down debt fast, then invest (generally speaking). If I acquire debt at no or a very low interest rate, it is only for a short period of time, and I make sure that I have cash on hand to pay it off if I need to.

Even what people call "good debt" is not good. The sooner you can work for yourself and not someone else (paying off your debt), the better. Personally, I think that the use of student loans is ridiculous and largely unnecessary in many cases. The 30 year mortgage is also a thorn. The home generally doesn't look as good when you realized that you have paid for it 2 or 3 times. Even cutting it down to a 20 year can save substantial money, with only a modest increase in payment.

[steventran]

Originally Posted by 2106

• Biggest piece of advice – find someone who has the same goals/priorities as you financially.
• Start saving early and start good habits early. It is no good saying to yourself that you will start saving money when you start making more if you have never actively saved. Saving/spending habits are hard to change.
• Pay off all debts as a priority (highest debt rate first).
o I don’t understand why some people invest when they still have outstanding debts. Remember debt is paid with post tax income so you effectively have to return the debt rate plus the tax rate for an investment to make sense.
• Only use credit cards for benefits of points or interest free periods, not to buy when you don’t have the money.
• Invest in things you understand. If you do not understand pay someone who does.
• Live within or ideally below your means.

Originally Posted by raclaims

I think the best advice I ever got was from my father...and it was basically to avoid debt at all costs.

That along with paying off college debt really stuck with me and I try to live by that mantra.

Originally Posted by 69mach351

I will say avoid/pay down debt fast, then invest (generally speaking). If I acquire debt at no or a very low interest rate, it is only for a short period of time, and I make sure that I have cash on hand to pay it off if I need to.

Even what people call "good debt" is not good. The sooner you can work for yourself and not someone else (paying off your debt), the better. Personally, I think that the use of student loans is ridiculous and largely unnecessary in many cases. The 30 year mortgage is also a thorn. The home generally doesn't look as good when you realized that you have paid for it 2 or 3 times. Even cutting it down to a 20 year can save substantial money, with only a modest increase in payment.

Originally Posted by jot_

I agree with you - I am very very opposed to carrying debt. But why wouldn't a mortgage be included in that definition?

Originally Posted by otisc

No debt. Ever. AMEX if you need plastic but pay it off within 24 hours of swipe. If you have debt, be it a credit card balance, student debt, a balance on your car loan - you are entitled to nothing until it is paid off. And I mean nothing. Own your car outright and then you can go to dinner and the movies. Exception for your mortgage, but pay that off ASAP. Get a 15 year if you have to but get rid of it. Debt is poison. People who carry debt and then buy themselves things they could not afford if their debt came due that day are the worst kind of losers out there.

And if you are just getting married make sure your partner is 110% on board with this and shares your values. Nothing will break up and otherwise healthy marriage faster than a divergent attitude over money, spending, and saving.

Debt is interesting - the following logic assumes you have the money but take on debt at cheap rate. Of course you don't want to carry any high interest debts but let's say you have a car loan at 1.3% or something similar to that. If you have the cash to buy car outright but take the loan, the money you could be invested to earn a rate greater than 1.3% + whatever associated fees.

And for credit cards why pay off within 24 hours of swipe? You have grace period so take advantage of it, free short term loan essentially as long as you keep on top of paying off by due date.

Like others said best advice is to make your money work for you without you doing anything. Whether that is dividend stocks, real estate, hedge fund / portfolio manager (preferably high water mark performance only fee) etc that is up to you and your risk tolerance.

[Larry302]

Save early save often along with live below your means.

I'm a fire fighter my wife (no college part time office job). In our mid/late 50's no debt.
House is paid for, and we paid for our two kids college ( an RN and one going to work for one of the big 4 acct. firms she just got a 96 on first part of CPA exam)

Never made a car or lease payment. Never had CC debt.

It honestly was not hard, save early , save often . Handful of funds, like index ones for low expense ratio.

[Rockrolex]

My advice: Buy low and sell high. All else, like resistance, is futile.

[Headshrinker]

My greatest asset was listening to my father's financial advice at an early age when I earned vast amounts of money. I have increased my net worth many times over because of his knowledge and his encouragement to live below my means; my only splurge was a BMW M3 in my twenties.

[salem65]

"Treat yo' self!"
--Tom Haverford

[Angrypuppy]

Frugality and compounding worked for this guy.

Perhaps the only clue that Ronald Read, a Vermont gas station attendant and janitor who died last year at age 92, had been quietly amassing an $8 million fortune was his habit of reading the Wall Street Journal, his friends and family say.

http://www.cnbc.com/id/102404530

[MTROIS]

Originally Posted by Angrypuppy

Frugality and compounding worked for this guy.

Perhaps the only clue that Ronald Read, a Vermont gas station attendant and janitor who died last year at age 92, had been quietly amassing an $8 million fortune was his habit of reading the Wall Street Journal, his friends and family say.

http://www.cnbc.com/id/102404530

Well, he certainly amassed a lot of money, but it does not seem that he enjoyed it...

[Angrypuppy]

Originally Posted by MTROIS

Well, he certainly amassed a lot of money, but it does not seem that he enjoyed it...

He didn't spend it, but he may have enjoyed it. Just because his priorities are different than yours doesn't mean his are wrong. I know quite a few people of his generation and financial security after the chaos and turmoil of the 1920s,30s, and 40s is it's own reward. Spending the money that he worked so hard to accumulate would have seemed frivolous and potentially added stress to his life.

He was happy I assume with his financial situation. Who are we to judge.

[Clutch Cargo]

Never let anyone sign your checks.

Actually, this was from an interview I saw with Barbara Eden. She was talking about Peter Lorre when they were in "Voyage to the Bottom of the Sea". She was young and just starting out in show business. He was old and broke. He had been swindled by the people he had trusted to take care of his money. His advise meant to never give anyone the power to spend your money.

[Mike_Templar]

Originally Posted by bdex75

I am with you. Very afraid. Especially being on the higher end of the income scale, VERY AFRAID. Luckily we don't live like it, but still, no one wants their hard earned income raided to redistribute wealth to those that don't work as hard or at all.

We tithe religiously and are more than willing to pay our fair share. We just happen to disagree on what that fair share is.

Even if you look at the lame duck presidents 2016 budget (most of which will never make it into law) many of the tax advantaged accounts, while having future limits put on them (like max $3.4m in IRA's etc) are grandfathered in.

Some others, like some of the Roth proposals are absolutely sickening. Like subjecting Roth IRA's to RMD's. That would be worse than messing with social security payments to people that are already drawing. In my opinion.

There are a couple other zingers in there, like a mandatory 5 year force out of qualified money for non spouse benes. Essentially killing the stretch IRA.

I think that this debate about tax advantaged/ taxable now has merits on both sides of the table. I split my employer sponsored contributions to 50/50 401k/Roth 401k as a hedge of sorts. Giving up the current deduction is hard but hey.

What is interesting to me is the record number of people fleeing certain states (like we are getting ready to flee Illinois) as well as people renouncing their citizenship. As of August there were 1,577 people that just cashed out of the USA totally in 2014. That was a 200%+ increase. Bad news.
Sent from my iPhone using Tapatalk

It sounds like we listen to the same financial news sources.
I frequent: Max Keiser, Peter Schiff, Marc Faber, Jim Rickards.

I personally believe, tinfoil hat or not, the myIRA is the camels nose under the tent of the 401k/IRA/Roth.

In a paper published by the IMF last year, the plan was to take everyone's accounts by waiting for the next financial crisis, declaring a bank holiday and then taking a piece of everyone's account. This was the most favorable out of the other options, because people wouldn't be able to avoid it. Their study concluded that if people knew it was coming, they would get their money out. Well, no kidding.

So, I think of Crete, where everyone woke up to a 40% deduction. Cypress, etc. What people don't realize, is buried within all these bills being passed are capital controls. Obamacare is a huge doorway into people's finances.

I envision being told, at 65ish years old: Well, Mike, you saved some money in your 401k, very good! Therefore, you spend that, THEN, we'll give you Obamacare and THEN we'll give you social security, etc.

I think that will be the LEAST bad outcome, with the worst bad being an outright theft, Cypress/Argentina/Crete style. (And, like they did in 33 in America).

My investment plan is basically rental property at this point. I can keep it levered and in debt, as opposed to having savings that is a target.

Here's a link to the Forbes article and their article links to the IMF paper:
http://www.forbes.com/sites/billfrez...-confiscation/

[Angrypuppy]

Originally Posted by Mike_Templar

It sounds like we listen to the same financial news sources.
I frequent: Max Keiser, Peter Schiff, Marc Faber, Jim Rickards.

I personally believe, tinfoil hat or not, the myIRA is the camels nose under the tent of the 401k/IRA/Roth.

In a paper published by the IMF last year, the plan was to take everyone's accounts by waiting for the next financial crisis, declaring a bank holiday and then taking a piece of everyone's account. This was the most favorable out of the other options, because people wouldn't be able to avoid it. Their study concluded that if people knew it was coming, they would get their money out. Well, no kidding.

So, I think of Crete, where everyone woke up to a 40% deduction. Cypress, etc. What people don't realize, is buried within all these bills being passed are capital controls. Obamacare is a huge doorway into people's finances.

I envision being told, at 65ish years old: Well, Mike, you saved some money in your 401k, very good! Therefore, you spend that, THEN, we'll give you Obamacare and THEN we'll give you social security, etc.

I think that will be the LEAST bad outcome, with the worst bad being an outright theft, Cypress/Argentina/Crete style. (And, like they did in 33 in America).

My investment plan is basically rental property at this point. I can keep it levered and in debt, as opposed to having savings that is a target.

Here's a link to the Forbes article and their article links to the IMF paper:
http://www.forbes.com/sites/billfrez...-confiscation/

The last number I saw had total 401k assetes at 3.8 Trillion dollars. That would barely make a dent in our national debt. And after any future confiscation politicians would be crucified. It's just not going to happen.

[skprd13]

Sea-dweller hit it on the head.

4/ Be greedy when others are frightened and frightened when others are greedy (as it relates to the stock market).

When the market dropped to 6800 or so back in March 2007 I told my accounting department to triple my 401K investments. Man did I make a killing and fast. One yr I had tripled my money and it has not stopped making money for me. Last year was a little rough but you are investing for the long haul. I just knew the market could not have totally crashed and all hell break loose that is why I did what I did.

Also I look at funds that have a track history of at least 10 yrs. Have a historical rate of return of a least 10% and have expenses less than 1% total.

Just my way of investing for my future and it has worked for me. Started with zero back when I graduated in 2002 and of course I could not max out my 401K account until I moved up in the company. The last 7 years I have maxed out my 401K and our company matches only up to 5%. Watch how fast your money will grow once you start to accumulate a nice sum. Like other have said slow and steady wins the race.

Good luck, aloha from Kauai,

Tom

[dexvd]

Originally Posted by MTROIS

Well, he certainly amassed a lot of money, but it does not seem that he enjoyed it...

Thats my view, I'm in my late 20's now, by the time I'm finished school I will have spent ~10 years as a university student. I'm not going to wait till I'm 60 to spend money and live my life. There is a balance somewhere between being overwhelmed with debt, scraping by pay cheque to pay cheque and what that guy did, having nothing to show for his investing and saving, aside from a number in his account.

I want nice watches, I want to travel, I want to scuba dive, ski, golf, snowmobile and live in a nice house/condo. I hope to be able to do those things before I'm retired but I do intend to save for them as best I can and invest regularly as I do get enjoyment out of managing my own investments.