The Ten Commandments of Financial Freedom

[frayne]

As usual during the holiday family gatherings I get questions on how I retired early. There was no silver bullet in my case, just some patience and discipline and common sense. Today I thought I would put down some of the keys that enabled my early retirement, not to mention a wife that had the same mindset as well as having a decent paying job with good medical benefits. I do feel both fortunate and blessed but to impart upon others when asked it is hard to point to any one thing, it was a composite of activities and tasks.

What would be in your ten commandments ?



The Ten Commandments of Financial Freedom

• Thou shall carry no credit card debit.

• Thou shall only carry (life insurance) term life insurance.

• Thou will only go into debt for a home or a car, and if possible not for a car.

• Thou will dollar cost average and capture the match of my employer’s 401K plan.

• Thou will invest into low cost index funds for the long term.

• Thou will maintain a well balanced and diversified portfolio.

• Thou will live within my means (budget) and know where thy hard earned money goes.

• Thou will save and invest between 10-20% of my annual income.

• Thou will not be influenced by the fear and greed that drive the markets.

• Thou will not judge others who choose different paths.

[dex]

Thou shall only carry (life insurance) term life insurance - only needed if you have aires, love them and your assets can not provide them with the financial security they have become acustomed.

[Alan]

• thou shalt marry wisely (if thee marries at all)
• thou shalt be financially prudent with thy offspring

[RetireeRobert]

Quote:

Originally Posted by frayne As usual during the holiday family gatherings I get questions on how I retired early. There was no silver bullet in my case, just some patience and discipline and common sense. Today I thought I would put down some of the keys that enabled my early retirement, not to mention a wife that had the same mindset as well as having a decent paying job with good medical benefits. I do feel both fortunate and blessed but to impart upon others when asked it is hard to point to any one thing, it was a composite of activities and tasks. What would be in your ten commandments ? The Ten Commandments of Financial Freedom Thou shall carry no credit card debit. Thou shall only carry (life insurance) term life insurance. Thou will only go into debt for a home or a car, and if possible not for a car. Thou will dollar cost average and capture the match of my employer’s 401K plan. Thou will invest into low cost index funds for the long term. Thou will maintain a well balanced and diversified portfolio. Thou will live within my means (budget) and know where thy hard earned money goes. Thou will save and invest between 10-20% of my annual income. Thou will not be influenced by the fear and greed that drive the markets. Thou will not judge others who choose different paths.

Well said. To which I would only add to your 8th commandment---save/invest 10-20% of annual income AT LEAST.

And I would add another commandment as the 1st-----be *persisitent* in saving/investing over a few decades.

[Arc]

Nice list - I'd consider getting "thou shall pay yourself first" in there somewhere.

[FinanceDude]

How about these?

1)Thou shalt not follow the financial advice of Robert Kiyosaki?

2)Thou shalt not apply for every credit card offer one receives?

3)Thou shalt not use thy home equity to buy new cars?

4)Thou shalt not think of Pizza Hut as "mom's home cooking"

5)Thou shalt not invest as if you are going to die tomorrow.......

6)Thou shalt not hire any advisor named "Guido", "Lucky", or "Slick".........

7)Thou shalt not use thy house deed as collateral in a poker game with your buddies........

8)Thou shalt not respnd to e-mails from Nigerian Oil Ministers.......

9)Thou shalt not tell thy boss he/she would look better if they went to the gym.........

10)Thou shalt not buy life insurance with the sole purpose of faking one's death to collect the proceeds.............

[frayne]

Quote:

Originally Posted by FinanceDude How about these? 1)Thou shalt not follow the financial advice of Robert Kiyosaki? 2)Thou shalt not apply for every credit card offer one receives? 3)Thou shalt not use thy home equity to buy new cars? 4)Thou shalt not think of Pizza Hut as "mom's home cooking" 5)Thou shalt not invest as if you are going to die tomorrow....... 6)Thou shalt not hire any advisor named "Guido", "Lucky", or "Slick"......... 7)Thou shalt not use thy house deed as collateral in a poker game with your buddies........ 8)Thou shalt not respnd to e-mails from Nigerian Oil Ministers....... 9)Thou shalt not tell thy boss he/she would look better if they went to the gym......... 10)Thou shalt not buy life insurance with the sole purpose of faking one's death to collect the proceeds.............

I like them all.

[Eyerishgold]

Quote:

Originally Posted by FinanceDude 6)Thou shalt not hire any advisor named "Guido", "Lucky", or "Slick".........

........or "FinanceDude"

[FinanceDude]

Quote:

Originally Posted by Eyerishgold ........or "FinanceDude"

Maybe for the new year, I'll become a "financial engineer", yeah, that's it.........

[Meadbh]

Thou shalt allocate thy investments according to thy risk profile

Thou shalt regularly evaluate thy risk profile and rebalance thy portfolio accordingly

Thou shalt not allocate more than 10% of thy portfolio to "alternative investments" such as hedge funds, venture capital or "art"

Thou shalt minimize thy Management Expense Ratio

[Dawg52]

Tho shalt remain single and childless.

[TromboneAl]

Quote:

Thou will save and invest between 10-20% of my annual income.

We need a figure for God's annual income here.

Quote:

Thou will not judge others who choose different paths.

Aw... I was doing so well up until this one.

[Niko]

I would change "car" to "higher education" in the third commandment.

[FinanceDude]

Quote:

Originally Posted by Barry I would change "car" to "higher education" in the third commandment.

Not easy to do for law or medical school. I remember how excited I was to be accepted to the Vanderbilt School of Business....and then I remembered I couldn't afford the tuition without my company's help...........and after a LONG time, they decided not to help me, and I made too much to get financial aid, and was still paying back student loans...........

[Nords]

Hey, Scott Adams did it with only nine:
1. Make a will
2. Pay off your credit cards
3. Get term life insurance if you have a family to support
4. Fund your 401k to the maximum
5. Fund your IRA to the maximum
6. Buy a house if you want to live in a house and can afford it
7. Put six months worth of expenses in a money-market account
8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement
9. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio

'Dilbert's' 9-point financial plan worthy of economics Nobel - MarketWatch

[TickTock]

Quote:

Originally Posted by Nords Hey, Scott Adams did it with only nine:

I owe you one, Nords!

I *knew* I had that summary in one of my Dilbert books, went looking for it mroe than once, and failed.

Now I've got it: Dilbert and the Way of the Weasel, page 178.

[skyline]

Quote:

Originally Posted by Nords Hey, Scott Adams did it with only nine: 1. Make a will 2. Pay off your credit cards 3. Get term life insurance if you have a family to support 4. Fund your 401k to the maximum 5. Fund your IRA to the maximum 6. Buy a house if you want to live in a house and can afford it 7. Put six months worth of expenses in a money-market account 8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement 9. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio

This is completely off topic, but does anyone else remember reading in one of Scott Adams' books that (and I believe he was being serious), the thing you had to do to get anything in life was to write what you wanted (in this case financial independence) something like 20 times each day and believe that you would get it? And that this would (again, I believe he was being serious) transfer your existance to a parallel universe where what you wanted was a reality?

His 9 steps listed above seem far more reasonable...

[TickTock]

skyline,

The Dilbert Future, pages 246 - 252, "Affirmations" and Appendix A, pages 255 -256, "Affirmations Technique".

[kcowan]

I have summarized this creative set of guidance here:

The Ten Commandments of Finance

[frayne]

Quote:

Originally Posted by kcowan I have summarized this creative set of guidance here: The Ten Commandments of Finance

Do I at least get some iota of editorial credit ?