Professional Financial Advice: The Top 10 Money Goals Everyone Should Have (II)

Hi there, if you are reading this, you probably enjoyed the first part and decided to read the rest of it. If you haven't seen the first part, you need to, it's good stuff! Just look here. Jeff Rose continues with sound financial advice just after the cut.

6. Be able to live on less than you earn – no matter what.

By learning to live on less than you earn – no matter what – you will always have plenty of income. That means that you'll have plenty of income for savings, investments, and for paying off debt. It's important to always be on the hunt to increase your income. But that strategy will only be effective to the degree that you are able to live on less than you earn, so that you can put the difference to better use to improve your life.

7. End any addiction to stuff that you may have.

This may not be a financial goal in and of itself, but it is an obstacle that will stand in the way of all good financial goals, no matter what they are.

An addiction to stuff (stuff could be jewelry, cars clothes, etc) can be like a financial parasite. A disproportionate amount of your income and financial reserves will go to pay for your need for stuff.

This will present several problems:

Stuff needs to be stored, and as your pile of stuff grows, you will need an ever larger space to store it. That will likely see you looking to buy a bigger house every few years, with all of the expenses that come with it. Stuff is a capital trap – it ties up your money, but generally provides no financial benefit.

Any money that goes into stuff, is money that is not going into productive investments. While stuff can make you more comfortable, only income producing or growth oriented investments can improve your station in life.

During times of financial turmoil, you may become obsessed with protecting and maintaining your stuff, which is not at all what you need to focus on. Stuff has a way of eating up time, so that you have less of it to spend on more productive activities.

I love this quote from Joshua Becker, author of Simplify: 7 Guiding Principles to Help Anyone Declutter Their Home and Life,

"Removing possessions begins to turn back our desire for more as we find freedom, happiness, and abundance in owning less. And removing ourselves from the all-consuming desire to own more creates opportunity for significant life change to take place."

If you even suspect that you may have an addiction to stuff, then make it a financial goal to end that addiction once and for all. Your life will go better if you do.

8. A plan to do work that you love.

Ultimately, the purpose of improving your finances should be to provide you with independence in your life. That means that it should afford you the ability to do what you want, when you want. If that isn't one of the good financial goals, then I don't know what is.

Getting out of debt, preparing for early retirement, developing multiple income streams, and ending your addiction to stuff, should clear the way for you to be able to do the kind of work that you really love. That should be true even if that work doesn't pay nearly as much as you're being paid now.

But that will be possible only if you have no debts to pay, if you can live on less than you earn, and if you have a large investment portfolio to back you up.

Why is doing work that you love a worthy financial goal? Very few people will actually be retiring to the beach for a life of blissful nothing, no  matter what you see on TV. If nothing else, it's likely that you will work just as a matter of personal satisfaction – or an attempt to avoid boredom.

Since you will be working all of your life – one way or another – the work that you do shouldn't just be about earning money. It should be something that makes you feel good about your life, and good about the person you are.

9. Get comfortable sharing your good fortune.

If you can't get comfortable sharing your good fortune with people who are less fortunate – perhaps out of fear that you will end up broke as a result – then money has complete control over your life. It doesn't matter how much money you amass in your life, it should never control you.

There are numerous reasons why giving to others will be good for you:

• Letting go of money affirms your power over it – because you know that it will come back.
• Giving to those in need makes you part of the solution in the world, and not the problem.
• Hoarding money is all about security – letting go of it is celebrating its value.
• Giving to others just feels good – particularly the knowledge that you have the ability to do it.
• Call it Karma, a higher power, what-goes-around-comes-around, or whatever you want, when you give you get – maybe not always in the form of money, but often in the form of friendship, personal satisfaction, or even help from others when you're in need.

Is giving one of those good financial goals? I think that if you look at many of the most famous wealthy people the world, you will see a distinct pattern of giving to others along the way.

10. A plan to leave your financial house in order upon your death.

However you live your life, it should be a goal to make sure that your loved ones are left at least a little bit better off as a result of your life. That means not only making adequate provisions for those who are dependent upon your financial resources, but also making sure that you don't leave them with a financial mess to clean up.

Here are some steps you can take to leave your financial house in order upon your death:

• As discussed in #5, make sure that you have adequate insurance, particularly life insurance.
• Make sure all of your debts are paid, and if there are any large or unusual ones, by a term life insurance policy to payoff that debt upon your death.
• Consider the impact of estate taxes, if your estate is large enough to be subject to them (insurance can cover that too).
• Discuss the financial implications of your death with your loved ones, to make sure that everyone understands what you want to do, and also so that you will consider any concerns or insecurities that they may have.
• Make sure that you have set an example of good financial management for your loved ones – what they learn from you will benefit them for the rest of their lives, and probably more than any amount of money you could leave them.

Reaching a point of financial independence in life has nothing to do with luck or magic. It's simply a matter of setting good financial goals, and having a concrete plan as to how you will achieve them. Once that plan is established, and working toward those goals becomes part of the habits that make your life what it is, achieving financial independence can almost seem as if it's happening on automatic pilot.

But only if you make it happen.


Originally published by goodfinancialcents