August 14, 2008

Thought for Thursday - Financial Hints

I've been working with clients in the financial business for almost 17 years now. And the BIGGEST key to financial freedom is: Do NOT spend money you don't have on things you do NOT need. That means if you can not pay cash for something, then you don't need it. Now I know you all with THINK that something you don't really need IS something you need, but it isn't.

So the second key to financial freedom is: Do NOT confuse wants with needs. Needs are food and shelter as well as those things that are directly responsible for getting food and shelter. Wants are everything else. Taking the bus or driving a low end car gets you to your job, which pays you money to buy food and shelter and therefore are part of needs. Buying a BMW is a WANT. If you have to finance a BMW then don't buy it. If you have to finance a low end car, then it's time to take the bus or carpool.

The third key to financial freedom is: Save 10% or more of your income every time you get paid. If you can not save because you're paying off credit cards, then get a second job...or a third. Suze Orman would agree. But if you don't like her...then just remember that Weyrd said so!

8 comments:

Fiona Picklebottom said...

Oh, INTERNATIONAL comment spam. Gotta love it!

The only debt my husband and I have at the moment is our house, though we are going to have to finance a car for him soon. We always go in with a large downpayment, though, so that we can do a 2-year financing thing. It's definitely nice to not have those things hanging over your head.

TheWeyrd1 said...

Fiona...you might use a short term second mortgage for the car if you have LOTs of equity. Do NOT use a Home Equity Line of Credit though. Use a regular fixed 2nd mortgage equity LOAN. The key here is not being bamboozled into any kind of "Line of Credit" which is basically like a credit card finance charge and structure wise.

Ariana said...

I don't think credit card companies like you much! are you planning to run them out of business with giving away advice like this?!!
;)

TheWeyrd1 said...

Fiona...btw, you were right about the "International Spam"! I deleted it.

TheWeyrd1 said...

Ariana...yes, I would like to put the credit cards out of business, at least as it operates now!

Jdancer8 said...

I like all your tid bits, also I would add stop eating out for lunches and things----the amount of money people spend on average on one meal out could be lunches for the week. I learned that the hard way and have TONS more money in my saings because of that....also if people have things financed like myself (student loans and a car) I always try to pay more then the minimum because I want to hit something towards that principal as much as I can.

I follow your advice religiously on finance---remember you are my financial guru :o)

citizen of the world said...

I agree with all this. I read one that the only things were going into debt for were housing and education. I follow that to this day. I do use credit cards, but as a convenience - I pay them in full every sngle month.

TheWeyrd1 said...

J...you're too sweet! Good suggestions btw...

Citizen...I agree, although I don't mind financing cars on very short loans, as long as the cars are used 2 to 3 year old cars. Older well running cars with low mileage should be bought with cash though.