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Experience Matters: Personal Finance Pointers from the Pros

personal finance advice, financial tips, personal finance

Getting advice and tips from some of the most wealthy and successful people around may seem inappropriate or simply irrelevant if you are understandably not in that league like most of us, but they got rich by being clever with their money.

Financial experts and wealthy individuals have often learnt from their early mistakes and applied proven strategies in order to generate and then preserve their fortunes, so it seems like a good idea to apply some of those tips, albeit on a smaller scale, to see if we can manage our money more effectively.

It is never too late to start making your money work harder

Carlos Slim Helu is a businessman who is close to being the richest person on the planet, and his fundamental advice is to start managing, investing and saving your money as early as possible.

Even if it is far too late to emulate his actions and start investing like he did at the age of 12 in bank shares bought on his behalf, using money earned from working when he could, it is still a philosophy you could start now, in order to make a difference.

For many of us, there are certain times where our finances need a short-term boost to cover bumps in the road like an unexpected bill, which is when companies like MoneyBoat.co.uk can prove useful, but by adopting the basic wealth management tips put forward by people like Carlos Helu and many finance experts in general, you can take positive steps to make your money work harder in the longer term.

Keep it simple

A common theme that seems to apply to a certain number of high-profile wealthy individuals is the fact that that they have consistently tried to keep their personal life as simple as possible, helping to avoid a financial treadmill, which is harder to escape once you are on it.

If you have stock market investments or taken an interest in financial markets, you will almost certainly have heard the name of Warren Buffett mentioned more than a few times.

He has consistently achieved steady returns on his investments in solid blue-chip companies but despite his enormous personal wealth, he still lives in the same house that he bought back in 1957, and the aforementioned Mr Slim Helu has also lived in the same house for over 40 years.

This is a good example of how keeping your life as simple as possible will help you to keep your finances under control and ultimately give you more choices and financial freedom if you follow the path trodden by some people who could clearly live where they wanted, but choose to stick to basics.

Needs and wants

Many of us aspire to owning nice things in life and a common goal is to sit behind the wheel of an expensive car, which is often considered to be an excellent status symbol and something to aspire to.

Interestingly, some of the wealthiest people around don’t seem to subscribe to that view and the owner of Ikea drives an old Volvo that is more than ten years old, whilst the billionaire owner of Walmart, Jim Walton, chooses to drive around in the same truck that he has owned for the last 15 years.

There is obviously nothing wrong with wanting to own a nice car and there are plenty of rich people who want to get around in safety and comfort in a nice car, but it is worth taking the hint that cars are basically consumer goods and should be viewed as such when distinguishing between financial needs and wants.

Get a money makeover

Your aim should be to try and adopt a personal finance philosophy which works for you and your lifestyle and to aim to take charge of your financial future by giving yourself a money makeover.

Take a look at what works for you and even if you think that your financial situation is not as good as it could be, take action to prioritize what is important to you and how you start to build your wealth, even if it is from a modest starting point.

It might feel like you are being too hard on yourself by being more financially disciplined, but your bank account will soon start to show its appreciation by displaying a healthier balance when you start to prioritize your spending and cut out unnecessary expenditure.

You might even want to take on board the advice of some of the wealthiest people around and walk straight past that new car showroom.

Jeff Mills is a financial advisor. He enjoys sharing his insights by posting online. His articles can be found on many personal finance and money sites.

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