7 Tips About Your Overall Money
*This was originally posted on 10/31/18 and we thought the reader would enjoy seeing this again.
- When you know a hurricane or similar destructive weather is approaching, it makes sense to use sandbags to keep flood waters from entering your home and other property.
- Like physical sandbags, it also makes sense to have economic sandbags in place to protect your estate and money against the inevitable unexpected events in life.
- Economic sandbags provide a measure you can use to check how you’re managing your estate to ensure you’re in good shape.
A good friend — a fellow advisor — from North Carolina talked about what he calls the “seven economic sandbags” in a newsletter. This was his first newsletter since Hurricane Florence made landfall. I really like the concept and want to share tips with you about your overall financial situation, based on this concept.
7 Tips About Your Overall Money
- Have a well thought out plan. In other words, carefully consider the structure and operation of your cash flow, taxes, and balance sheet. This will give you a thorough understanding of all the things in the background that drive this process.
- Have a good savings foundation. This means ensuring that you have specific emergency funds available. These funds are for contingencies — things that go bump in the night — like hurricanes and other unforeseen things that take place in your life.
- No big bets. Don’t decide to throw a lot of money at one particular kind of investment in hopes that you’ll get a really big payday. Doesn’t make a lot of sense to do that. This strategy can only end up harming you, especially if you already have what you need to continue to live.
- Be smart, not paranoid. This refers to concerns about fees and taxes. I think sometimes the conversation gets driven around these two things. Focusing on fees and taxes diverts attention from the truly important discussion and can cause people to make decisions that don’t really make a lot of sense. So take care to avoid becoming overly anxious about them.
- Avoid excessive debt. You probably know that there’s good debt and bad debt. You really must stay away from incurring bad debt. Generally, debt that you accumulate for items that get consumed right away, or that depreciate, is bad debt. It’s important to keep that to a minimum.
- Rise above the noise. What do I mean by this? If you become too consumed with the everyday — what’s going on in the world — get caught up on streaming the media, it will create fear. Fear can lead to poor decision making, which won’t lead you to a good place.
- Work smart. If you’re still working, pay attention to the changes in your industry and your particular job. These things are always changing, evolving. Jobs are often eliminated in this process, meaning you might need to get retrained, go in a different direction, or consider changing jobs altogether.
Makes sense to have several sandbags ready when a hurricane is iminent and I like the concept of seven economic sandbags that protect your money and lifestyle. These provide a great way to check everything you’re doing in your estate to make sure you’re in good shape and on the right track. Until next time, enjoy.
Gary Klaben serves as a Financial Advisor, and visionary for Coyle Financial Counsel. He has over 30 years of experience and is the author of Changing the Conversation, Wealth of Everything and co-author of The Business Battlefield. Whether advising his clients, mentoring his team, or coaching entrepreneurs, he is always simplifying complexity and motivating others to take the next action that’s right for them.
Learn more about The Coyle Process, approach designed to get your arms around the big picture, so you can make informed financial decisions. Ask Gary about The Coyle Process and schedule a complimentary consultation and start living the Good Life Managed Well™.
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