Best money advice you've ever received?

[Life_is_Good]

I never received advice about money, but I made it a point to observe how successful people spent their money. The one thing I learned was that ...

"just because you have money.... doesn't mean you have to spend it."

I think that single observation (of people close to me) helped me to achieve my ER.

 

[GatorBuzz]

"Getting up for work is never fun. If you've got to wake up anyway, you might as well work hard to make as much money you can. There's no sense having to wake up early every day and make 5 dollars an hour when you can make 7." --My old blue-collar Dad.

 

[NinjaPigeon]

"Pay yourself first." 'Do or do not - there is no try' - Yoda.

Those 2 statements kinda point up an issue i have with the world of today. Seems to me that a person's word is no good if it's dependent on the situation of the moment: if "pay yourself first" means "screw the lawful debts (contracts, promises) I've made - I'm getting mine first" then I have a problem with it. Seems that too many people are too willing to accept that if something is difficult or costs too much to perform that it's just fine to break the contract.
Kind of feels like a twelve step sort of thing - "everybody fails, we're all human, saying you're sorry = performance". For too many the attempt is a feeble gesture and the focus is on the payoff rather than the job at hand. The person that says they'll try to start at 8, finish the paper on time, pay the rent, land the plane at LAX - whatever - is not the person I want making the attempt. "Pay yourself first", to me, sends the wrong message to our youth, dilutes the social contract, and poisons our American culture. It's like those which one doesn't fit questions:
1. Do or do not, there is no try.
2. Ask not what your country can do for you, ask what you can do for your country.
3. Pay yourself first.

A bit of a negative spin on it, but the point is still valid. You cannot make whole your debts if you don't look out for your own nest egg first.

This is covered in The Richest Man in Babylon, where the guy takes the first 10% for himself, next 20% for his debts, and lived on 70%.

And yes, if it's down to me putting 10% in the bank or someone at Citibank taking another vacation to Jamaica? Guess where my money's going.

Edit: I should add that I take my debts very seriously. I have never skipped out on money owed, and never will. I pay my bills even before they are due. I do not believe that people should enter into a contract they did not intend to honor. But that's probably why I can pay myself first without having to miss payments on other things

 

[NinjaPigeon]

I'm not saying spend every dime you have but financial caution can be taken a bit too far as in the case of my father in law who ran a beef farm and for 45yrs got up at 3 am and did his barn chores then at 7 am went to work at the local telephone company for 8hrs then came home had supper and another 3hrs of barn chores,never took a vacation,never bought anything new and died with basically nothing to show for it except a million bucks in the bank.

Had this conversation with a friend recently, and I will tell you the same I told him. I'm perfectly fine if I die without having spent my fortune. My family can spend it on my behalf. I take much more pleasure out of building it than I ever would spending it. Let them spend it and remember me fondly.

That being said, if other people want to go the other route, then I believe they should follow their heart. I still think are crazy, but they think the same of me

 

[calmloki]

A bit of a negative spin on it, but the point is still valid. You cannot make whole your debts if you don't look out for your own nest egg first.

This is covered in The Richest Man in Babylon, where the guy takes the first 10% for himself, next 20% for his debts, and lived on 70%.

And yes, if it's down to me putting 10% in the bank or someone at Citibank taking another vacation to Jamaica? Guess where my money's going.

Edit: I should add that I take my debts very seriously. I have never skipped out on money owed, and never will. I pay my bills even before they are due. I do not believe that people should enter into a contract they did not intend to honor. But that's probably why I can pay myself first without having to miss payments on other things

I get what "pay yourself first" means - just haven't accepted it as gospel. Absolutely not claiming any moral high ground - if it came down to survival then i'm getting my requisite groceries, which means that i'm guilty of situtational ethics. Problem is this: words have power. For me, pay yourself first is a terrible way to exhort people to live. The parents who raise their children to pay themselves first stand to reap the results of their teaching when the kids choose to fatten their RE warchest rather than care for good old Mom and Dad. Teaching selfishness as a virtue is NOT a good plan. People are plenty selfish. Or so i think.

Disclaimer: no kids, not dependent on the kindness of others to survive, plenty of native self interest.

 

[yona]

If you work too hard, you have no time to make money

 

[retire@40]

If you work too hard, you have no time to make money

Did you mean to say "If you work too hard, you have no time to [-]make[/-] spend money"?

 

[Gekko]

I never received advice about money, but I made it a point to observe how successful people spent their money. The one thing I learned was that ...

"just because you have money.... doesn't mean you have to spend it."

I think that single observation (of people close to me) helped me to achieve my ER.

Thru-out much of my adult life, I've had the opportunity to observe up close and personal, the habits of extraordinarily successful people. And I came away with the same conclusions - however much money they had, they always took the spending or saving of money very very seriously, far more seriously than the poor people I observed in childhood. That's not to say that they couldn't be very generous, only to say that each decision about money was made very carefully. From that I have learned a healthy respect for money - mine and other peoples too.

In addition, it goes without saying that they were LBYMers - even the ultra wealthy among them (inherited wealth being the exception).

 

[bright eyed]

Start early
Put more with each raise/increase/bonus
Read this forum

Now trying to learn what to do with the after tax money, soon as i find some...

It's not what you earn, it's what you don't spend....should be tattoo'd to my forhead...then maybe i can find more of that after tax $!

 

[yona]

Did you mean to say "If you work too hard, you have no time to [-]make[/-] spend money"?

No.
People that work too hard don't have time to make money. I see it all the time in my company. When I talk with people about stocks, they tell me thay don't have time for this. They just put their money in CD.

When you work hard and get promoted, the salary doesn't go up much. I decided not to get promoted into rules that require more of my time, and to use this time to invest my money. I already make in the stock market much more than people that are much more senior than me.

Of course, if you are self-employed, this is not the case. But if you work for others, you better not work too hard, and invest more time in making money for your self and not for your employer.

 

[CuppaJoe]

Thru-out much of my adult life, I've had the opportunity to observe up close and personal, the habits of extraordinarily successful people. And I came away with the same conclusions - however much money they had, they always took the spending or saving of money very very seriously, far more seriously than the poor people I observed in childhood. That's not to say that they couldn't be very generous, only to say that each decision about money was made very carefully. From that I have learned a healthy respect for money - mine and other peoples too.

I've found that some of these folks are really slow to pay our bills. The really really rich, I mean so rich that instead of, say, buying Microsoft at the IPO, they were among those who provided the start up cash, will actually ask for discounts; some get the discounts, others are reminded that thinking a service is overpriced is a good reason to end the professional relationship.