If money could talk, it would certainly have a lot to say. Living beyond your means is not just a problem for low income families. Families everywhere, regardless of income, can find themselves struggling to pay the bills and keep up with various expenses. You might think that you know everything there is about managing your money, but there is always more for you to learn. Here is some great financial advice from Tony Robbins.
Learn from an Expert
A financial advisor is someone who specializes in helping people make the soundest financial decisions. If you hire one, they’ll be able to offer advice to get you started on the right track. A financial advisor will look at things like your income and expenses to determine your best course of action. Listen to their advice as much as possible. They might bring up things you hadn’t considered but are very important. If you have any questions, be sure to ask them for clarification.
Seek “Asymmetric Returns”
Everyone has heard the old saying that “With big risk comes big rewards” but Tony says the key to success is to look for bigger than average returns with lower than average risk.
Prepare for the Future
You need to be thinking long-term about every single paycheck you receive. It’s not pleasant to think about a sudden emergency popping up, but it is a possibility. Analyzing your finances helps you to realize how important your money is. What might just seem like a few dollars in one instance could make a big difference if you don’t have it. Financial planning forces you to think long-term. Imagine yourself in the future: would the future you be happy about the financial decisions you’re making now?
Start Small
Don’t wait until you have a lot of money to start investing. The key is to get started and make investing a habit. Better yet, consider it like a tax you don’t have any choice if you make it mandatory you will build the nest egg over time. Start small and your mistakes will also be small. Which brings us to…
Learn from Past Mistakes
Even if you’re not on the verge of bankruptcy, you can still learn from your previous financial experiences. You might be spending too much in one area, such as going out to eat. While you can’t undo the past, your future starts today and you can make your future better. A financially irresponsible self can be something of the past.
Know the Rules
Before you get in the investing game learn the rules. “When a person with money meets a person with experience we all know what happens… the person with the experience ends up with the money. ” ~ Tony Robbins. Watch the fees, a simple 1% per year reduces your nest egg by 20% over your lifetime.
Asset Allocation Matters
Where you put your money matters. Using index funds is one way to diversify your risks. The simplest solution is an “All Weather Fund” this allocation is based on balanced risk rather than balanced investments. According to Tony Robbins’ research, the “Secret Sauce” is Stocks 30%, Long Term Treasury Bonds 40%, Intermediate Treasury Bonds 15%, Gold 75% and Commodities 7.5%.
The full recipe for financial success can be found in Money: Master the Game – 7 Simple Steps to Financial Freedom by Tony Robbins.
Set a Good Example
When you think of setting a good example for your children, you might not immediately think of financial decisions. However, you can really help them out in the future by showing how much care you put towards your finances. Let them know how and why you’re saving. As they grow up, they’ll understand how to manage their money better than their peers.
Visit Tony Robbins Official Website.
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