Save money right away, before you spend it. But invest the dollars tomorrow, so reason gets a day to negotiate with your instincts.
SET UP A HOME EQUITY LINE OF CREDIT. Be sure to read the fine print. But typically, all that’s involved is paperwork and perhaps a $50-a-year fee. Ideally, you’d never use the credit line. But it could come in handy if you have a financial emergency and as a lower-interest, tax-deductible alternative to car loans and education loans.
IN THE 1990s, when I started working fulltime, conventional wisdom suggested two possible routes to a comfortable retirement: Find a public sector job that offered a traditional pension plan or, alternatively, join the private sector and set aside 10% of my salary each year in my employer’s 401(k) plan. I was led to believe that if I followed either recommendation, I could sit back, let compound interest do its magic and achieve a financially secure retirement.
IMAGINE YOU HAD ONE SHOT at offering financial advice to a high school or college graduate. Your mission: Come up with 10 rules that’ll help your graduate succeed financially in the years ahead. What would you recommend? Here’s my list:
1. Question yourself. No doubt you’re entering the adult world with a slew of strong opinions—about what you want from life, what will make you happy, what you’re good at, what constitutes success and how to achieve it.
I LIKE LEARNING from successful people. If you want to be good at something, why not hear from somebody who’s actually done it?
Back when it was first published, I read The Millionaire Next Door and became fascinated with these folks. Over the next couple of decades, I applied the book’s teachings and eventually reached millionaire status myself.
Along the way, I started writing about personal finance, combining my interest in millionaires with my passion for learning from experts.
Jonathan Clements is the founder and editor of HumbleDollar. He spent almost two decades at The Wall Street Journal, where he was the personal finance columnist. His latest book: How to Think About Money.