“Our wisdom comes from our experience, and our experience comes from our foolishness.” – Sacha Guilty
Jay Ledesma
Today is April Fool’s Day. It’s to remind us what we have been most of the other 364 days of the year. And if there is one aspect of our life that we have mostly been foolish about, it’s in terms of our money management. How many times have we made those wrong calls on our finances? Each time, hoping that we have learned our lessons. But do we really learn? Don’t you wonder why in spite and despite so many warnings and red flags, so many people still fall for those scammers? It’s because of our displaced desires and lack of information, we tend to rush in and make those wrong money choices and decisions.
This April Fool’s Day, instead of making foolish money moves, let’s work on some smart money making/saving hacks.
Willing to wait. Building wealth takes time. Unless you won the lotto grand prize, born or married to a rich family or inherited a fortune, you will need time to create your wealth. The desire to make quick or instant wealth is usually the reason people get scammed. In a market of low interests and yields, any instrument that offers too-good-to-be-true returns is already a red flag. Avoid these instant bigtime money schemes. Instead, go for the more steady and safer placements. They might give you low to mid returns, but you can sleep more soundly at night knowing that your money will still be there when you wake up. Don’t rush in on quick returns.
Pay Yourself First. I have dedicated a whole article on this in the past issues. Basically, the idea is to automatically allocate a portion of your income to your savings and investments (10%-20%) before your spending. Doing this discipline will help you build up your future financial goals, to include setting up of an emergency fund. Next, learn to know your needs and wants. Prioritize the needs/essentials before indulging on those guilty pleasures. Live within your means. Most people end up having no savings because they usually put this at the bottom of the list. Based on experience, we will never run out of things to spend for. So, if we do spend first then savings later, there will be no savings at all. Don’t rush in on spending.
Grow your money. Don’t’ let your money just stay idle in your chosen instrument. Depending on your risk appetite, there is an investment instrument out there in the market that can help you earn passive income and grow your money. Your age is also a factor when choosing where to invest. Younger people can still go for riskier instruments as they still have time to recover in case market goes down. Older people should go for a more stable investment vehicle. Either, look for an instrument that will not only protect your money but will have your money work for you. The earlier we find them, the better. Many retirees are now cashing in from the investments they did when they were much younger. They may not be working anymore but they have grown their money enough to sustain them in their twilight years. Don’t rush in on none interest bearing instruments.
Get advice. With anything and everything available at the tip of our finger, you can get knowledge and guidance before making any money decisions. There are so many materials on the internet that will help you understand and make informed choices and decisions. Just be careful that you are getting advice from reliable online sources. Don’t be afraid to ask from individuals who experienced both failures and successes in handling their finances. There is definitely a lesson to learn in their stories. You may also seek counsel from financial planners who are trained to give sound financial advice. Don’t rush in on choosing your investment instrument.
Put your wealth in order. It’s not enough that we create or build wealth. We also have to protect it so they can be enjoyed as we planned it. There are so many risks in life. Accidents, illnesses, natural calamities, and pandemics can happen in an instant and have financial impact on us, which can even change our life forever. Get insurance (life, medical and property) as protection against those unforeseen events that life can throw at us. We need insurance so when any of these happen, we can safeguard our savings for its original intent and purpose. Don’t rush in on life without insurance.
The journey to financial freedom is challenging and exciting. You will encounter so many valleys and hills and make so many mistakes along the way. But let’s be mindful to enjoy our journey. Learn from our mistakes, celebrate our small wins and prepare for what lies ahead. Amidst the noise and pressure around us, let’s not be like fools to rush in.