I’VE made plenty of mistakes when it comes to my own finances. When I was younger I spent money I didn’t have, and never thought about investing.
But over the years as I’ve become more financially literate one key lesson stood out: you are never too good to ask for help.
It took me meeting my mentor — a businessman worth more than $100 million — to hammer this one home.
Really, I should have known this a long time ago.
I once tried to save money in a renovation by overseeing everything myself. Guess what, I’m not a builder, and ended up blowing $15,000 by making choices I never would have if I’d taken the advice of a professional.
Working in financial advice, I’ve seen plenty of other people make costly mistakes too.
No matter where you are in your financial journey, here are the key lessons you need to remember. OK, it took someone worth $100 million to highlight the significance of these lessons, but they do work.
1. You Are Your Greatest Asset
When people are first thinking about ways to grow their wealth, they’ll debate whether property, bonds, or stocks are right for them. They’re forgetting their most important asset. Themselves.
Your education is far more important than any individual asset you may buy.
Investing in your education, your personal development, is the secret sauce that will align you with your goals, YOUR WHY, and set you up for success.
To this day, I continue to invest thousands every year in my personal development and education when it comes to building wealth.
2. Complicated Equals Costly
I lost count of the number of times early in my wealth-building journey that I looked for the complicated solution over simple.
Many of these complicated investments will promise easy riches or abnormally high returns.
I learned the hard way. When I was first investing, I had a thirst for big, quick money, and I started playing with options.
The problem was at the time I didn’t really understand how they worked. I didn’t know how to manage a scenario that turned out differently to how I had expected, and I lost $8000.
Always ask yourself one question before you invest — “Do I understand this investment and will it take me closer to my goals?”
If the answer is ever NO, then don’t enter the investment, simple heh!
3. Many Hands Make Light Work
Investing on your own is a trap for beginners. Success is a lot easier if you have people around you to help your decision-making.
At a minimum, I suggest getting a coach who you can guide you.
A good accountant who understands what you are trying to achieve is a must, and don’t assume any accountant fits, they don’t, it took me three attempts to find the right one.
The key is to expand your skill base by having access to people who are skilled in areas that you may not be … it leads to better decisions and adds some accountability to your decision making.
4. Always Seek to be Challenged
I hear you, I just said investing is not hard and now I am saying always seek to be challenged.
Well what I mean here is that you need to surround yourself with people who challenge you and at the same time support you when needed.
I have a favourite saying that I have shared with my kids from a very young age — “If you want to soar like an eagle don’t hang around with turkeys”.
It might be harsh, but the reality is you need to be surrounded by people who are uplifting and supportive.
5. Investing is the Long Game
With all the instant messages and news we are exposed to these days, there has become an expectation that building wealth can be done quickly too.
For almost everyone this isn’t the case.
The basic premise of building wealth is that it is a long-term pursuit, it’s the long game.
The magic of investing and building wealth is that it is a lifetime pursuit and not an outcome, and you can start with as little as $20 per week.
Sure, there are great outcomes you can achieve from building wealth, but the activity never needs to end.
You can be investing for the rest of your life and creating a legacy for your family and their family.
So when you sit down to contemplate your next action for your money, think about how you can apply these tips. If they are good enough for a guy who has made more than $100 million in his career, I think you and I can find a place for them in our arsenal.
Andrew Woodward is a mindshift.money accredited money coach based in Sydney who teaches people to take control of their money and invest for their future, simply and efficiently. Sign up for his free weekly money tips at theinvestorsway.com.au.
Originally published at www.news.com.au