The best financial advice I ever read

I worked in the finance industry for many years. I accumulated a lot of knowledge but like most things it is taking action that counts. Budgeting is a worthwhile practice but it is not something I have ever been able to discipline myself to do. Buying quality assets when everyone is selling and selling when everyone is buying is also another good policy to follow.

For the past 30 years I believed the real estate market in Australia was overvalued and never invested in that booming market. I still consider it has been overvalued throughout but the perfect storm of a growing population, a negative gearing taxation policy, low interest rates and an influx of investment from Asia resulted in fundamentals becoming meaningless. So what do I know?

I agree with the Warren Buffet theory of investing in income generating companies, with a good brand, low debt, good return on equity etc but these days the US stock market in particular is in a bubble as are most investment classes. and the markets are being rigged by the Federal reserve. But who knows these bubbles may just continue while super salesman Trump is in power.

So what I am about to tell you is not new but if you only do this one thing. you will find yourself more wealthy in the long term than if you did not taking this action. "PAY YOURSELF FIRST".

If you get paid $100.00 put at least $10.00 (10%) away and forget about it. Salary sacrifice it to your superannuation or 401K. You can also deposit it to a savings account and transfer it to a higher yielding investment periodically when you have saved an appropriate amount. At the moment physical Gold or Silver may be worth considering.

I adopted this strategy many years ago and it is the only reason I have any wealth to speak of and the earlier you start the better.

If you can afford more than 10% all the better but make it a minimum of 10%. After paying yourself first then you can pay everyone else.

I also believe in balance in all things in life. So I recommend (if possible) spending up to the equivalent amount you are putting away,on yourself, as an immediate reward for all your hard work and efforts. This could take the form of saving for a holiday etc. or treating yourself to a massage etc. Buy life experiences rather than "things".

Until next time

P