I came across this article, and it really spoke to me. The concept of getting rich can seem selfish and a taboo subject. I define getting rich as being financially independent: not worrying about money all the time, being self-sufficient, and being able to financially help out others who may not have the money to deal with financial surprises. Don’t we all want that?
The article is by Melissa Houston, and it’s titled “How to Get Rich from absolutely nothing…” While the article is written from an entrepreneur’s perspective, the points she raises make sense for anybody. The one she highlights as most important is a great one….
“Don’t check out
This is my most important tip. Hiring financial help such as accountants and financial advisors does not leave you with the right to check out of the financial activity in your business. Nobody will care about your money as much as you do, so never give your financial power away. Take the time to invest in educating yourself about money management so that you can oversee what is going and understand when an investment is not doing your portfolio justice.”
All too often, I see many people outsource this to “professionals” because “they know better”, “I don’t have the time”, or “it makes me too anxious to deal with it.” The problem is that their perspective won’t be the same as yours. There’s a big difference between managing someone else’s money and your own. So how to start?
- Start asking questions. There is nothing worse than having your intuition nudge you and ignoring it…only to find out later you should have paid attention. You don’t need to understand every detail, but you should understand enough so that you can explain what’s going on…e.g. “my portfolio is up x% this year, I’m 50% in equities, my dividend income is x.” If your answer is “I have no idea”, you need to understand it better.
- Set up time every month to go over what’s going on with your financials with the people you’ve outsourced to. It can be 15 minutes. The objective is to force yourself and others to be accountable from a scheduling point of view…if they know they have to meet with you, they’ll pay more attention to what’s going on with your accounts. If you do it yourself, hold the meeting with yourself.
- Keep historical track: it can be as simple as a monthly count of key metrics: how did your portfolio end for the month? How much income was generated? How much did you pay in fees? I find that when the news is good, people want to talk about the trend…when the news is bad, not so much. This will help inform your questions…”why did my portfolio go down? Are there stocks I should be selling? “
Finally, I love her statement : “The bottom line is that knowing how to get rich is something that is learned.” Learning takes time, repetition for mastery. The sooner you start, the sooner you’ll be on the path.