As a property investor, you understand the power of putting your money to work for you as part of your long-term plan to build wealth. There are other money
and investing principles, however, that are important to remember as part of your wider awareness of building wealth. From having a strict savings plan to having liquid cash saved for uncertain times, here are some timeless money and investing principles to inspire you and your family.
Save your money
Whether you heard this principle as ‘Pay yourself first’ in Robert Kiyosaki’s, ‘Rich Dad, Poor Dad’ or you’ve always been a disciplined saver, getting into the habit of saving sets strong foundations for the rest of your wealth-building activities. To that end, save at least 10 per cent of every dollar you earn and increase that amount every quarter.
Liquid cash is king
In uncertain and volatile times, it’s critical to have liquid cash available, so you have freedom in your choices and cash to cover monthly expenses if needed. Ideally, you’ll want to hold at least six to 12 months of your monthly expenses in cash. If you don’t have this already, set yourself staged savings goals (three months, then six months and then 12 months), and work towards building your cash buffers.
Pay off debt that doesn’t produce an income
Pay off credit card debt, personal loans and other types of non-income-producing debt before you invest or making any big financial plays.
The rate at which these types of debt compound aren’t, in most cases, worth holding, so you need to pay it off as soon as possible.
Invest in yourself
If you look at the balance sheets of some of the biggest companies in the world, you may notice that 10 per cent of revenue is typically earmarked for research and development. Think of yourself like a company and invest 10 per cent of your income in continuing to educate yourself through books, courses, educational events and any other empowering programs that will expand your awareness.
Remember the long game
We all know the saying, ‘If something is too good to be true, it probably is,’ and it’s particularly prudent to remember when it comes to money and investing.
Remember the long game with saving and investing, just like you do with buying and holding property on methodical and researched time horizons.
Remember, you should speak to a financial professional for tailored advice before you make any big decisions about your finances or investing. The principles outlined here are for general information and inspiration purposes