Inspired by a few reader questions a few weeks ago and reflecting upon some older blogposts, I wondered what financial advice would I tell my younger self? Here are some things that have crossed my mind…
- There is no point saving for your financial future if you don’t take care of your health. Your health will be your most important asset.
- Investing is for the long-term. Trading is for the short-term. You’re going to have minimal success at timing the market so forget trading. Make sure you buy and hold indexed products and established companies that pay dividends instead.
- Avoid tinkering with your portfolio. See reason above.
- The biggest barriers to your financial freedom will be, other than your good health: your investing behaviour, taxes and inflation.
- You’re going to make some major investing mistakes but hopefully you’ll make fewer of them over time.
- You’ll learn to appreciate indexing more and more as you get older.
- You will thoroughly enjoy plotting your own financial course. If you have enough discipline you will be able to pick and choose when you work later in life.
- If you want to get rich you’ll need to be an entrepreneur, a very successful entrepreneur at that.
- Avoid owning the bank’s high-priced products (like some mutual funds). Instead, own the banks themselves and collect their dividends.
- Make sure you run dividend reinvestment plans for your dividend stocks and Exchange Traded Funds (ETFs). DRIPping will take the emotion out of investing.
- Spend money on things that value to your life. You’re going to love travelling.
- Get into the habit of saving early and often. Time in the market is your friend.
- You’ll have to educate yourself about money.
- Nobody wants you to save money.
- Unless you can get a great deal in the form of a great lease or you’re able to write-off the expenses for it, avoid buying a new car unless you plan to own it for at least a decade. New cars will be a wealth-destroyer.
I’m sure there are other things I would tell my younger self about saving and investing for the future, but these things quickly come to mind.
What about you?