Whether they’re personal or financial, life always comes with regrets. How many times in life have you uttered the words, “If I could do that over…” Probably many! Just like you I’ve wished for my fair share of do-overs. So as we head into 2018, I’m going to share the five financial do-overs I wish I had, in hopes that you won’t make those same mistakes.
If I’d put back $300-$500 a month back when I first began working at 16 years old, the compound interest alone would be unbelievable. However, like most young folks, I wasn’t looking toward the future. Obviously, I hadn’t grasped the concept of compound interest. Albert Einstein is attributed as saying, “Compound interest is the eighth wonder of the world. He who understands it earns it. He who doesn’t, pays it.” Whether he said it or not, the truth behind that quote is undeniable. The power of compound interest is truly mind-blowing.
I hate debt! Hate it! I hate it! Hate it! I hate it! To see the crippling effect of debt in people’s lives will leave you in disbelief. One of my friends recently took out a large loan to buy another business. Now, he’s stuck and not able to make some strategic moves that could ultimately help him, all because of a debt he owes. Am I saying all debt is evil? Not at all. However, all too often, we aren’t disciplined enough to stop ourselves from buying those “toys” or wants now. Instead, we go into debt to live the lifestyle we want versus what we actually need. I can remember a time when my wife and I were broke. Completely broke! We had to drive to Georgia for a family gathering. It cost us $500 on a credit card to get down there and back. That $500 turned into $600-$700 once we paid it off. If I’d learned that sooner, I’d made better decisions in some areas of my life. These moments taught me to hate debt.
I’m a business owner. Not only do I own my business today, but I started a business at 16 and sold it, along with two other businesses in my lifetime. In business, many owners rarely show the concern they need to in order to make the most out of our endeavors. I could’ve made more money with less stress if I’d implemented a business plan. I’d still made mistakes, however, I’d ran a much more efficient business than I did had I known how to do proper business planning.
What I mean when I say this is that I’d surrounded myself with key people to help propel me forward financially. Some of those in my life now are peers that I value and trust their opinion. Others are seasoned professionals I’ve hired to help keep me on task, like a CFP®, a CPA, and a lawyer, among others. I’m able to listen to the advice they offer when I am about to make a strategic decision. It doesn’t mean I always choose what they advise me of. However, I weigh the counsel heavily. I listen to their thoughts. I challenge what they say and allow them to challenge me on what I say. Ultimately I make the final decision, but the insight they give me is invaluable.
I honestly cannot reiterate this one point enough. I even touched on it in the previous do-over. There was a dark period in my life that involved a lawsuit. I was a defendant at first and then a plaintiff in the suit. In that time, I spent $300k in legal fees, not to mention the emotional, physical toil I endured. All could have been prevented had I just hired a good attorney, CPA, and CFP® from the get-go. Even though I’m a CERTIFIED FINANCIAL PLANNER™, I need someone else to help guide my finances. They can ask me the tough questions I may not want to ask myself because I can’t see my own plan clearly. I’ve learned that lesson and practice what I preach, hiring my own CFP® to challenge me to stick to my goals. I pay these professionals to help guide me and keep me from making mistakes that are avoidable. If I’d know this 15-20 years ago I’d be a lot better off financially. Professionals are expensive, but I’d spent $25-$30k on their fees versus $300k on a lawsuit that possibly never would’ve happened. So hire a professional. They offer a layer of protection you can’t create on your own, no matter how much you think you know.
Life will never be without mistakes. A life lived is a life full of blunders. However, you can create what we call in the stock market a stop-loss or a limit to how much your willing to lose. Learn from me, as well as others who’ve been where you are and take the necessary steps to secure a future of greater successes than losses.