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Timeless Principles for Financial Management

(Regardless of changes in the economy, administration, global influences, etc).

  1. Think long-term (current and possibly future generation) with goals and investing. (Subtitle: Aim at Nothing and You'll Hit lt Every Time) The longer term your perspective, the better financial decisions you'll make. Set goals in writing for the future. lnvest for the long term and worry less about short-term ups and downs in your 401(k) or investment portfolio.

  2. Spend less than you earn. (Subtitle: Help, I'm Stuck in a Traffic Jam on the Road to Riches) To accomplish this, you need to know what you're earning and what you're spending. Make a spending plan (or, if we dare use that loathed term, a budget). Monitor how you're doing. Develop the self-control to avoid over spending. lf you consistently spend less than you earn over a long period of time, you will do well financially.

  3. Maintain emergency savings (liquidity). (Subtitle: l'm Having an Out-of-Money Experience) A reserve set aside will help you ride out the surprises life throws at you. You must spend less than you earn to build savings. Savings will then help you avoid debt. These principles work together.

  4. Minimize the use of debt. (Subtitle: Honey, l've Shrunk Our Portfolio!) Debt increases risk. lt may allow you to do more or have more now, but debt will reduce your ability to have more in the future. Few cases of financial disaster occur without debt. Financial problems are magnified with debt.