Finance Tips from Tony Robbins

We’ve touched before on how believing you don’t have the income or assets to start saving or investing responsibly don’t really hold any weight. Because there isn’t a minimum for how much you need to save, you can start as low as you need to and just work your way up. And I’m not the only one who believes this. Just ask life coach and self-help author Tony Robbins, who sat down with USA Today and offered some pretty awesome advice, too. Check it out below.

  • Get out of a consumer mindset, and get into an investor’s mindset. Pick an amount or percent of your paycheck, and stick to it faithfully through times thick and thin.
  • Be knowledgeable and always educate yourself. Robbins warns that many investors fail to read the fine print in their contracts, and can wind up paying way more in fees. Robbins uses an example that shows how falling for the higher fees can wind up costing an investor hundreds of thousands of dollars.
  • Set a realistic goal. Don’t set a lofty one of “financial independence”. Find out how much you need, calculate it, and work towards it.
  • Diversify your assets. Know what you have and where to put it. Work out where to keep it safely, and where you can invest with risks.
  • Assets are nice, but should take a backseat to income. Learn how to liquidate some of them when necessary. After all, a great stock portfolio won’t buy your food or pay for gas.
  • Again, keep learning from the best. Read interviews, tips, and lectures from the top financiers.
  • Start now. Just do it. If you have some income, it’s not too late to begin thinking about your future wealth.

Avoiding Common Money Mistakes (Continued)

Continuing from Part I. Read it here!

  • Be Proactive: A lot of bad spending and finance habits are reactive. That means many of us wait until something bad happens in order to fix it. Think about the dentists bill, or the car in the repair garage. The reactive spender stretches their credit limits to cover it; the proactive spender is already prepared. How so? A proactive financial mindset means preparing for the inevitable snags in life by continually setting aside for these emergencies. That way, there is always a cushion there for you to deal with surprises. Not to mention, it makes holiday and other gift shopping that much easier. If you’re not in a position to open a new account for the rainy day, that’s no excuse. If you get a regular paycheck, set aside just a bit, $20, 5%, whatever– because in this respect something is truly better than nothing. Also, set it up for automatic transfer, so you don’t even need to think about budgeting out your savings on payday. And as you get used to reduced take-home pay, maybe up the contribution to your future self.
  • Check yourself: Sometimes, we’re in the mindset that we’re destined for a certain career or position, and that other jobs are “beneath us”. But that idea couldn’t be more wrong. You must remember that in life, nothing is owed you– it’s up to you to go out there and get what you want. If you need to support yourself or a family, you should never skimp out on a job if you can land it. Pick it up, and look for what you want. Also, check your spending. Just because you feel you deserve a big purchase or investment doesn’t automatically mean you can make it.
  • Saying No: While it takes guts to say “no” to your friends when they want to have a ritzy night out on the town or dine at a pos restaurant, it takes way more to say “no” to family. If someone in the family is undertaking a very risky decision that you know may not end well, you are not obliged to go down with them. Rose recalls his mother asking him to consign a real-estate investment in Las Vegas. When Rose said “no” when keeping in mind his mother’s credit history, he must have felt really bad. But sure enough, late 2000’s real estate wasn’t great in most places in the country– Vegas included. Had Jeff agreed to his mother’s wishes, there would be two family members in the hole, and not just one.

Part of growing up means constantly educating ourselves and questions not only what we’ve learned, but the (sometimes) perceived infallibility of people who taught us, like teachers or parents. While they are important, some lessons aren’t always the right ones, and its up to each of us to continuously hunt for the truth.

Breaking Bad Tradition

On the road to financial freedom, we are most prone to emulating the lives and habits of those we learn from. And, more often than not, those models are our parents. Some of us had parents who exhibited awesome financial habits, and managed to learn from them. Others of us were not so fortunate, and may have developed poor financial habits and practices. But that doesn’t mean all is lost or that it’s too late to change direction. Over at the Art of Manliness, guest contributor Jeff Rose shares a couple tips that will help us to not make the same money mistakes as some of our parents. Keep in mind, that these tips are things you will have to work on with diligence; a lot of lessons we learn self consciously, and can be hard to shake. Check them out after the jump!

 

  • It’s all in the mindset: Thoughts such as debt being inescapable or financial hardship just being part of life are usually just poppycock. While certain hardships do come, folding to defeat or using them as an excuse for poor habits are no way to improve your condition. Maybe the reason you believe these things are because of what you have been taught as a child. But the first step to correcting this mentality is coming into a sense of self awareness. This idea of change starting with the mind is far from self evident, and by all means, you should share this with others less fortunate than you. Anyway, how do we break free from the prison of our minds; how should we frame these situations? Again, it starts with awareness. If ever you find yourself jealous of the material gains of those around you, do not automatically blame it on circumstances or the idea that they have more than you. Take a step back and look at your own financial habits. What are you doing differently? What are you not-so-great at or what could you be doing better? Consider that you don’t have all the answers, and look around you, ready to emulate better role models.
  • Mentorship: Next, you’re going to have to find a model to stick with. This may seem to be unnecessary at first, but you will soon enough realize that there are a ton of nuances to the finance game, and have questions upon questions. It would certainly help if someone could answer them! A good first step is joining a personal finance site (like this one!) that is teeming with tips for the person trying to gain control of their wealth. Rose suggests The Debt Movement and Enemy of Debt. Or, you could take the old fashioned route, and pick up a book by a reputable finance guru like David Ramsey or Napoleon Hill. Next up, you should definitely try to forge a more personal relationship. Unless you know a financial powerhouse firsthand, it can be a bit awkward to start a relationship like that. So what can you do? For starters, why not reach out to financial institutions and directly ask questions for experts in that field? Want to learn about loans? Talk to a loan officer. Interested in small business? Talk to the owner of your favorite shop!