May 8th Is The Big Day
May 8th is a big day for our family as our son graduates from college with a Bachelors degree in Business. He has been an excellent student and he will be an excellent employee working for a Fortune 500 company in their business planning division, starting in June.
As I thought about preparing him for his step into the “real world” I realized that he has been taught proper budgeting and money management. He knows the value of compound interest and investment over time when it comes to investing and retirement. So he is prepared for the “blocking and tackling” of managing his finances. But I felt there was a couple missing pieces of good personal finance management that I have yet to share with him. So, after some thought, I came up with three pieces of advice that will help him become a valuable employee and as a result, help him meet his personal finance goals.
Become A Man Of Value
Teddy Roosevelt once said: “It is not the critic who counts…The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood…who actually strives to do the deeds…” This is just a portion of his famous quote that so accurately focuses on getting into the arena and becoming a man of value. To this end, the first encouragement I want to give my son is to strive to be a man of value. Focus on creating value for your company and your customers. If you are working for a good company with good management, and he is, they will identify that value that you are providing and value you all the more. That value will provide you options, like promotions, and opportunities, like salary raises, which feed into meeting or exceeding his personal finance goals.
The focus on value will also apply to your investing. Find great investment vehicles of value, that can provide a decent return. You’ve got time and compound interest on your side, so you don’t have to take huge risks or gamble with your money. If you focus on value, success will soon follow.
Up until this point, my son has led a fairly charmed and successful life. Good grades, good choices, good experiences with very little trouble or distraction. Now that he is going out into the working world, I want to prepare him for trouble, disappointments and change. Trouble happens, sometimes when you least expect it. Many times due to circumstances completely out of your control. Same is true with disappointments. Probably the most impactful thing he will experience, though, is change, because up until now, everything has been fairly regimented and predictable: Elementary school to middle school to high school to college. Next he gets his degree and he starts his job. But in the working world he will experience substantially more change: work changes, bosses change, business changes, etc. In all these cases: trouble, disappointment and change, I want him to understand that it is normal and encourage him to grow from it. Learn how to adapt and prosper in the new circumstances. Embrace change and expect trouble and it won’t detract you from your personal or professional goals.
This applies to his finances as well. There will be bad investment years. There will be scandals, new politics and new laws that will cause financial trouble, disappointment and change. Learn from it, adapt and move on toward your goals. Do not let this trouble, distraction or change keep you from taking the right financial actions.
The Secret: Enthusiasm
Last, there is a key to being successful in your career and your personal finance, and that is to be wildly enthusiastic at what you do. Get after it with energy, focus, passion and effort. Not only will it open doors for you, it will motivate others in the process, making you that much more value. Set huge goals. Give it maximum effort. What’s that Norman Vincent Peale quote: “Shoot for the moon. Even if you miss, you’ll land among the stars.” It will be obvious to him how this applies to his career. But it also applies to his personal finances: Set big financial goals. Want to retire by age 45? Want to afford international travel? How about give away one million dollars to charity? Whatever it is, go after it with all you got, and watch how it effects both the results as well as the people around you. It is contagious.
How else does enthusiasm apply to personal finance? I would say this: Be involved in your finances as much as you enjoy and partner with trained professionals and technology to help in those areas you do not enjoy. Because no one wants you to be successful with your money more than you! Go after it with vigor and enjoy it. Let your friends and family see your enthusiasm for proper money management and watch it rub off on them too!
The Big Finish
Sheryl Sandberg once said: “Don’t let your fears overwhelm your desire. Let the barriers you face—and there will be barriers—be external, not internal. Fortune does favor the bold, and I promise that you will never know what you’re capable of unless you try.” To paraphrase in other words: Be a man of value, for your company and your customers, facing and expecting trouble from which you can learn from and adapt, and work with all your might and enthusiasm to achieve even more than you imagined possible.
Financially this applies just as well: Do the basics really well: Make a budget, save an emergency fund, save for large purchases and retirement, invest your money early and often in valuable investments that use compound interest and time to build it into a fortune. Expect hiccups and setbacks. Work with enthusiasm and enjoy the process. But most of all, stay the course to build your legacy and your wealth. All of which leads to the ultimate goal of financial freedom!