Late last month I happened to stumble upon an article which I felt was worthy of emphasizing. The article "Grads can learn to save now" by Adrian Mastracci disscusses 5 steps to improving your financial wealth. These are very important and are also reflected in Robert T. kiyosaki, "Rich Dad Poor Dad", which are the basis for a financial plan that strives for success.
1) Your Human Capital Human Capital is essential as it is our very knowledge and continuous learning that can be as Mastracci says to convert it to "financial capital " on your balance sheet. However, the challenge is using our human capital efficiently so that as people don't waste their most precious asset through bad financial habits. 2) Pay Yourself First I am in total agreement as budgeting is crucial to preparing for financial success. Through paying yourself before you expenses you are insuring a basic growth of your capital. 3) Avoid Debt Traps As I learned from Kiyosaki, is that we all fall into a perpetuating rate race, which negatively impacts our well being. Understanding your balance sheet is essential in recognizing spending habits that are destructive, which comes down to gaining financial knowledge. 4) Learn to invest Wayne Gretzky my all time favorite hockey player said it best "You'll always miss 100% of the shots you don't take. " If you do not try you do not learn and if you do not learn you do not grow. I really liked Mastracci's idea of being involved in Financial investment clubs as they are a great way to learn from one another about investment topics and investments available. I feel strongly that knowledge comes from text books but true applicable knowledge comes from experience. 5) Stick with the basics As Mastracci said which echos Kiyosaki's Rich Dad Poor Dad,"put the excitement in other parts of your life" not into your financial independence. Simplistic structured investing may be boring but boring is what will get you success in the long run.
I really enjoyed reading this article as it emphasizes the basic principles that people tend not know or ignore. These steps are the building blocks for success and everyone should practice these principles.