Top 5 Financial Tips You Haven’t Read

Someone kindly took the time to congratulate me on 5 years in business. I hadn’t noticed, but thank you. Upon reflection, this point in time calls for a “Top 5 things” to ponder after 5 years formally in the financial world combined with untold numbers of financial and financial products seminars, a look inside the finances of clients and 4 decades of my own studies, investing and observing.

What are the top 5 most important things to say to anyone who wants to take the time to listen?

  1. The best financial investment you can make is in your marriage. You can grow your wealth together. You will squander it apart. At least 3 times a year, the two of you only need a weekend.
  2. Don’t assume the economy we enjoy today is the new normal. It is not. Neither our personal finances nor the world’s can carry on forever fueled by borrowing: The world’s debt has increased from 174% of gross domestic product (GDP) to 212% over the past few years. The “historic” interest rate is more like 6%: Governments only control the short term interest rates of up to a few years. Investors control long-term rates.
  3. The wisest and richest man of his age (maybe all ages) King Solomon, said, Ecc. 11:2, (the Bible) “be diversified 7 or 8 ways”. I notice that hundred year old life insurance companies entrusted to pay out regardless of the economy, do exactly that- invest 7 or 8 distinct ways, including no more than 20% in equities.
  4. Don’t accept the myth that investments = the stock market. You don’t have to be in it at all for optimum returns but if you think you do- see #3, 20% at most. No officially recognized “Financial Advisor” has the credentials to counsel you in the breadth needed for the “7 or 8” areas. Expand your horizons.
  5. Be frugal. The very best, the very brightest psychologists make enormous money showing advertisers how to make you feel inadequate with what you presently have. Ok, I may be too cheap. My wife thinks it’s time to get rid of my 14 year old ex Roger’s SUV. But it always starts, stops, and steers. Is that not enough? I guess she’s right.

Further reading:

1—Canadian business owner Bill Hammond has navigated a globally focused business through 37 years and a half-dozen economic cycles. But he’s never seen anything quite like the long, slow, on-again-off-again recovery that the world economy remains stuck in,…. The Globe and Mail – January 23, 2015