The best 3 financial pieces of advice I live by
Today I'd like to talk about 3 pieces of financial advice that I'm following right now. They're not exactly what you'd expect - no asset allocation and the hottest crypto. But rules that shape my actions and result in better financial outcomes.
Let's get right into it.
The first advice that I absolutely loved from the very moment I heard it is: Security comes from your relationships. This one is by Ken Honda - if you haven't read this book by him I can definitely recommend it.
The best way for me to explain it to you is to invite you to take part in a little exercise. Take a piece of paper or, if you're reading this while working on a laptop, open a text editor. Now, imagine you had no place to stay at. No home. And you needed to ask your close friends to let you stay on their couch, or in their guest bedroom if they're fortunate enough to have a spare bedroom, for a week. Pretty simple, right? Go through all your friends, and family if you like, and write down the names of all the ones who would be happy to host you for a week. Now pause and complete your list.
Done? How many friends do you have on your list? Ken Honda realised that if your list has 52 names, you have somewhere to stay for a full year. And if you were to return to each of your friends for a week in the following year... you could live without a home but not be homeless.
Security comes from your relationships. There are people who love back with their parents to start a business and cut expenses. And there are friends who accommodate you when your house is flooded. And once you're aware of it, you can start seeing your relationships as... a kind of investment.
The second piece of financial advice I'm following at the moment is a big one and applies to much more than money. Truth is what you agree with.
From my experience of mentoring and coaching clients about money, and from my personal experience, I see that mindset is by far the most overlooked part of Financial Freedom. The most tricky part about it is that you can talk and talk and talk about mindset but if somebody has never tried to work on it or experienced enough transformation and positive results as a consequence of that work... they won't hear you. It's a bit like somebody telling you how great exercising feels when you never exercised and don't even like the idea. No matter what they say, you cannot relate as you don't operate in the same paradigm. Your truth is what you agree with, sometimes just far from somebody else's.
When reading the news, I always sooner or later get anxious about the future - does that sound familiar to you? You're having a good morning, you decide to check what's happening in this big, wonderful world and... a can of worms gets opened. Because that's how the news is designed. And once you believe in the work created by the media... there's a big chance you won't do your work. Whatever that thing you decided was worth your while, your effort and energy... can be seriously threatened if you agree with that media-generated reality. I can already hear some of you say - but it's a fact that there is this happening and that going on, some of you will think of the big word RECESSION and so on.
A friend of mine called me a while back and was saying how all our investments will be wiped out because of the war between Russia and Ukraine. She was following a group on Facebook which would give you updates and serve as a venting space of sorts. I said that I'm glad I'm not part of that group. It's not that I ignore reality but I'm very aware of how much control I have of global conflicts. If you can't change something, don't give it attention - it's a waste of your time. Focus on what you can change and that is ultimately... yourself. And do the work, no matter the external circumstances.
And finally, the third piece of financial advice: your motives are to be questioned, others’ motives are best ignored. On the face of it, these sort of mottos seem quite... lofty. But in fact, when you do look closer, they're very practical. This third one for example - I truly believe that we live in a world that makes it extremely hard to know what one wants and needs. Let's take the latest phone model - if you have it, why do you have it? Do you need it for work? Do you want it because you love the brand? Are you a huge fan of technology? That's stuff. Let's move on to money. Why do you want to earn a six figure income? What does it mean for you? And then investments. Why this fund or investment and not the other?
I'm all for taking action, for doing but... for the right reasons. Not just copying what somebody else did. Not desiring what somebody else desires. It takes a bit of questioning, some reflection on your own motives and a good dose of confidence to ignore everybody else's. When I look back on my life and see choices that didn't work out... they were usually somebody else's best options. And I'm not even talking about big things here, or investing in cryptocurrencies, but simple things like buying uncomfortable shoes because somebody whose taste I liked loved hers. In finance, in making money... I find it most liberating to do what suits me best, not follow others. What about you?
What are your currently best financial mottos you live by? Do you agree with mine? Have you heard of any of them? Let me know in the comments if you have.
