Hello fellow leaders…
Part IV in the Series Leaders Take Control of Your Financial Future.
First of all…. I am not a financial guru. I am going to give advice that seems to have worked out for me, based on what I think is just good old common sense. Sadly, the old adage says that common sense is not as common as we think. My goal in the next few paragraphs is to give you some ideas about how I think a leader should plan for their retirement. I am not talking about investing money to make a TON of money. If it were that easy, our economy wouldn’t be in the shape it is today.
Rule #1: YOU are responsible for your financial future. While this makes sense intuitively, let’s take this to a deeper level. If you work for a company or organization that has a retirement plan – great. However – don’t EVER put all your eggs in one basket. I know… it is tempting to put your money into a 401k that gets a match from your employer – but you are giving up something very critical to your financial future. Control. You have some control of that money – but not total control. You also are tying yourself to that organization, and it makes leaving a lot harder. You obviously should take advantage of a 401k if you can… just don’t put all your retirement there. You are also tying up your money in the stock market. There are a lot of other investment vehicles out there besides stocks. By putting all your money into a 401k, you can’t participate in these. If you work for a government organization that has a retirement plan – again… great. However, you should not rely on that plan alone to be enough for you. If the company goes out of business, or the economy goes south in a hurry, you may find yourself holding onto a lot of empty promises. Diversify…. Diversify…. Diversify.
Rule #2: NEVER invest in something you can’t explain. I know there are multi millionaires who can’t possibly know everything about all their investments. But… they should know where there money is going. Call me a control freak – but I would NEVER (there’s that word again) turn over my investment to someone blindly, just because they’ve made money before.
Rule #3: With just a few exceptions… don’t buy something you can’t pay cash for. This was a lesson my Dad taught me when I was young. He said if you can’t pay cash for something, then don’t buy it. The only two exceptions were a house and a car. Your credit card is for convenience – not for a loan.
Rule #4: Take an active interest in your investments. Making money takes work. You are giving up a lot of money if you just throw your money into a mutual fund and check it once a year. There are a lot of fluctuations in the stock market that you can take advantage of with just a little bit of homework.
Rule #5: If it’s too good to be true – it probably is.
Rule#6: Read – read – read. Educate yourself on the different investment vehicles out there. Some of my favorites are by Richard Kiyosaki (Rich Dad, Poor Dad) and Donald Trump.
Leaders take control of their financial future!
All the best,
All the time,