9 Pieces Of Financial Advice From Wise Men

There are no secrets to successful financial planning and investing. In fact, the core principles have routinely been shouted from the roof tops for at least 200 years in pamphlets, handbills, sermons, speeches, books, radio shows, TV programs, audio tapes, DVDs, blog posts, tweets, and probably even Snapchats.

I recently came across a list of well-known money-related quotes that pretty much distills the financial wisdom of the ages. Here are my Top 9.

“Rather go to bed without dinner than to rise in debt.” – Ben Franklin. This two-century-old gem pointedly reminds us of the corrosive effect of debt, and wisely urges us to avoid it. Yes, there is “good debt,” including mortgages and business loans, which helps build assets. But many Americans carry too much “bad debt” from credit cards and other consumer loans that were used to finance a lifestyle beyond their true means.

Related: When Good Debt Goes Bad

Related: Actionable Steps You Can Use To Get Rid Of Credit Card And Mortgage Debt

“In investing, what is comfortable is rarely profitable.” -- Robert Arnott. A good reminder that risk is an unavoidable part of investing. And, the higher the risk, the higher the potential returns. In shaping an investment strategy, you need to honestly assess your risk tolerance and create a diversified portfolio that includes some acceptable higher-risk investments. The younger you are, the more risk you should consider.

“Know what you own, and why you own it.” – Peter Lynch. Seems obvious, but many investors have lost track of their holdings, or never fully knew them. The journey to financial success is like any trip. You need to know both your destination and how you are getting there. Otherwise you’ll get lost, or take much longer than necessary to arrive. Review your portfolio on a regular basis and tweak it as needed.

Related: Why You Should "Own Your Age" In Your Investment Portfolio

“Speculation leads you the wrong way. It allows you to put your emotions first, whereas investment gets emotions out of the way.” – John Bogle Successful investing is a marathon. You need to set specific goals, settle on a strategy and execute that strategy consistently and dispassionately – year in, year out. Jumping in and out of the market based on fear or greed is bad for both your nest egg and your stress levels.

“Personal finance is not rocket science. Personal finance is about 80% behavior. It’s only about 20% head knowledge.” – Dave Ramsey. Discipline is everything. It’s not enough to say you are going to cut your spending and increase your savings. You have to actually DO IT. Consistently.

“I will tell you how to become rich. Close the doors. Be fearful when others are greedy, be greedy when others are fearful.” – Warren Buffett Be wary of the ‘hot thing.” Be careful about jumping on the latest investment trend. Seek out the upside opportunities when things are looking bad. When Apple stock recently took a slight tumble, smart investors saw that as a “sale” on a great stock, not a sign to dump their shares.

Related: 7 Smart Ways To Get Started Investing

“The four most dangerous words in investing are, ‘This time it’s different.’” – Sir John Templeton.   Beware of false prophets, both purveyors of doom and sunshine sellers. Learn a bit about the market -- it’s history and patterns.

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” -- Paul Samuelson No day trading. No. Day. Trading.

Related: Does Day Trading Add Up?

“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.” -- John Bogle   There will be market ups and downs over the course of your investment journey. A few will be dizzying. But over the past 100 years the market has moved steadily higher. Keep your perspective. Remember: The current value of your portfolio means very little if you are 20, 30 years away from retirement.

Related: 6 Completely Terrible Pieces Of Financial Advice

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"If your savings account balance is looking sad, you're not alone.

According to a 2016 GOBankingRates survey, 69% of Americans have less than $1,000 in their savings accounts.

What's more, 34% have no savings at all:

While the numbers seem staggering, it shouldn't come as a huge surprise, consideringabout half of US families have zero retirement account savings .

GOBankingRates also broke down savings by age, so you can see how you stack up against your peers:

How much should you have in the bank?

Most financial advisors recommend having three to six months of living expenses in an emergency fund to pay for unexpected costs.

In addition to establishing a rainy day fund, it's smart to set savings goals for major purchases that you hope will be in your future, like a home, car or vacation. It may be helpful to set up multiple savings accounts in order to save for specific expenses."  



Does this all hit close to home? 

There's a darn good chance the answer is yes...but that doesn't mean you can't make a change.

You just need to find a roadmap that works for you...



Don't forget that we are always here to provide feedback and solutions to reach whatever goal you have. 

Get Out Of Debt

We’ve all been there. Things get crazy in life, and you think, “Well, I’ll just put this on my credit card for now. It won’t take me too long to pay off.” Then expenses just seem to keep popping up, and it gets harder and harder to pay off your initial debt, and you may even keep adding to the pile.Well it’s time to stop this downward spiral, and get out of the debt trap. Below are several steps you can take to become debt free.

1)      Assess the situation

It’s time to sit down, and take a good hard look at all your expenses (not just your debt). Pull up your bank account(s), any debt that you have, and any reoccurring monthly expenses. Get all this information in front of you and your significant other. Now look and see exactly where your money is going. Create a T-chart with one side for income (what you’re actually taking home) and the other for required monthly payments. This should include expenses that you can’t adjust, like mortgage or rent, the electric bill, etc.

Subtract the expenses from the income and circle this number.  This is how much free cash flow (FCF) you have on a monthly basis.  We are going to use this to pay down debt along with enjoying life!

Reduce your circled number above (FCF) by your minimum debt payments.  Then start listing your “Nice To Have” expenses such as entertainment.  After reducing your FCF by minimum debt payments and entertainment.  Hopefully you end with a positive number, and your expenses don’t outweigh your income.


2)      Set realistic goals with a time frame

If there is money left after reducing FCF for “Nice To Have”s, we can put those funds to work paying off your debt.  If not, or if you would like to put more towards debt, cut excess:

For example, maybe you can cut your entertainment budget, and put some of that money towards paying off your credit card. It can be hard to cut back on things like going out to eat with friends, but you can always get creative when finding a way more budget friendly way to hang out, like hosting a potluck at home where everyone brings a dish.

Now that you know exactly how much you want to put towards your debt, figure out exactly how long it should take you to pay off your smallest debt amount outstanding. Once you’ve figured out these numbers, write it down. Congrats! You’ve set your first goal.


3)      Take action

Now, each month, you’ll know where to cut your expenses so you can put the money you’re able to save towards paying off your debt! Watch your progress as your debt shrinks. This can really help motivate you to continue paying it off, and keep your debt from feeling overwhelming.

Remember that if you miss one month, that it doesn’t mean you should miss the next month. Don’t beat yourself up if you didn’t reach your goal for one month. If you couldn’t make the full payment of your goal, try and make a partial, and if you can’t do that, just remind yourself that this is a marathon and not a sprint. Building debt takes time, and so does paying it off.


4)      Remember you are not alone

Most people are more motivated when they have a partner. Whether it’s at the gym or a group project at work, it can help to motivate you when you’re being held accountable to your goals. Wela wants to be your personal finance partner. Our debt tool will help you write out your goals, and help hold you accountable to paying off your debt. Don’t worry, Wela’s personal financial advisors have seen it all when it comes to debt, and we never judge.

You can sign up for your Wela account here to get started taking the above steps to start paying off your debt today.