Advice is only valuable if it is followed and produces the desired outcome. These words of advice have served me well through the years;
I was raised in a modest family. My parents grew up poor but instilled strong values in their children, including cultivating an early habit of saving and understanding the true value of a dollar. Here are a few gems I’ve kept with me through the years;
- Save before you spend. Save a set amount of your earnings every month first, before you spend, instead of saving only whats left after all the spending.
- Plan your spending in terms of needs. Prioritise spending for essentials first.
- Invest (smartly) your savings and leverage on the power of compounding.
Beware the Generational Curse
Echoing words of advice from Warren Buffet should come as no surprise here, considering he is mentioned often on our website. I consider him a personal hero of mine.
He is one of the rare tycoons who has pledged almost all of his wealth to charity instead of to his own children.
Many families and business empires pass a huge inheritance down their bloodline without also passing down the moral values and intellectual capabilities required to manage it responsibly. Second and third generations end up squandering the family wealth. Some engage in vices instead of using the money for good, while others develop undesirable characters which plague their lives. The level of true happiness for these individuals, who inherit excessive money without knowing how to manage it and use it positively, is very low.
My advice? Only provide your heirs enough money for a comfortable living. Excessive giving of wealth can be destructive for your children. And engage a trusted professional to manage wealth. A competent outsider is better than a foolish insider.
It was a client who taught me the value of humility and giving back. His motto is: “The more you give, the more you are able to give.” To him, giving allows you to get returns in more ways than one, and might even create future wealth that you can further give away. Compassion is paramount to the longevity of money.
It’s easy to write down your financial goals. It’s the execution that is hard. It’s even harder to execute it consistently and correctly throughout one’s life. To do this requires financial expertise, mathematical acumen and market understanding. That’s where a wealth manager comes in.
The job of the wealthy investor is to select wisely a trusted and competent wealth manager rather than trying to manage his wealth himself. Any while almost any manager can gain your trust, it is the right advisor is one who can keep it.