Gentleman, it’s time to start getting serious about our finances.
It doesn’t matter how old you are. Whether you’re in your 50′s, 30′s, or even your 20′s, there is something you should be doing better.
We put this subject off as long as we can because for many of us it’s unpleasant to talk about.
But the fact of the matter is, the more time we don’t address it, the more unpleasant it is going to get.
Money problems don’t go away unless you make them.
Focusing on just these 5 lessons that I am going to tell you will already put you WAY ahead of your average man.
So pay attention.
Be Patient – Get Rich Slowly
For decades it was all about the get rich quick mentality. Now it’s about the get rich slowly.
That’s right. You don’t need a million dollars by the age of 28.
Who needs that?
Sure, it would be nice. But how much will it really improve your quality of life?
A recent article from Psychology Today
Positive feelings, like happiness, may be slightly influenced by income, but are more influenced by things like general temperament, the people you spend time with, and the types of activities that you do. – Psychology Today
The point is that the old adage, “money can’t buy happiness” is still true.
So yes, while we should be striving to improve our finances, there is a limit to how much more money will make us happy, and if we are sacrificing our best years to make money to get rich by 28, you’ll end up hating your life even more!
Bring Your Wife In On The Finances
If you’re a married man and you are solely responsible for the finances, you should strongly consider how much you are benefiting your wife by keeping her in the dark.
Ask yourself the following question:
What would happen if you died?
It’s a morbid thought true, and one we try to avoid even more than questions about money.
But again, it’s something we need to address, because it’s going to happen.
No one knows when the reaper will come for them, but we want to be prepared when it does.
What would your wife do if tomorrow you dropped dead?
Does she know where the money is? What accounts you have open? Does she know the passwords, the amounts, how to manage them?
Being a man is about taking care of your loved ones, even after death.
That is the manliest thing we can do.
Additionally, there are other benefits to bringing in your wife. For example, if she is a bit of a spender, bringing her closer to the finances will help her understand the causes of her actions and might quell some extraneous expenses.
So sit down with you wife today, not tomorrow, and go over your financial situation.
Compound Interest Can Be Your Greatest Friend Or Your Worst Foe
This is what compound interest looks like:
Now $10 might not seem very exciting, but it actually represents a 1000% return on your original $1 investment.
This means, if it had been $1000 put away when you are 20, it is now $10,000 when you are 67.
This is how saving for retirement works – the earlier you start, the better it compounds and the more you get out of it.
Here’s the other part that most people don’t notice.
While it took about 34 years to get from $1 to $5, it only took 13 years to get from $5 to $10.
This is because it isn’t a linear function, so it picks up more and more speed later and later.
This is why every year of saving counts so much early on, because it’s the later years of compounding that really make it shine.
But before you start cheering – remember, compound interest works both ways.
It works when you are saving, and it “works” when you are in debt and your interest is compounding and compounding against you.
And it only gets worse, the longer you don’t address it.
Tracking Your Expenses
“The money comes in, but then I don’t know where it goes”
How many times have you asked yourself this question?
If the answer is one or greater, you need to be keeping track of your finances.
There is a very simply equation for making money:
Make more money then you spend.
If you can do that, your networth WILL go up. You probably know the first half of the equation, but you might not know the second.
Figure it out and control it.
If you need some online tools to help you, check out how to manage your finances like a man.
Max Out 401k And Keep An Emergency Fun
In a recent article, which collected responses from over 600 individuals over the age of 37 about things they wish they had focused on in their 30s.
The number one, most common answer was “start saving for retirement now”
As you can see from the compoun interest chart, now is far superior to later when it comes to saving.
One of the best ways to make use of this right now is simply to max out your 401k contributions. This is especially beneficial if your company has a matching program.
You’ll find that putting this extra money away will keep you from spending money you don’t have on frivolous hobbies and items like fancy cars and expensive suits.