I’ve been outlining a large and exciting writing project recently (more on this in future posts).
For this project, I’ve spent weeks on the outline. Making decisions as to what to include and what to omit.
The exciting part of the process has been narrowing down the essential principles of Gen Y Wealth. The principles that guide my thinking to financial planning, and hence, everything I write here.
Since Gen Y Wealth, wouldn’t exist if it wasn’t for you. I thought there was no better person to share this principles with than you.
# 1 – Personal Finance is Personal
I don’t write to create an army of followers. The goal of Gen Y Wealth is to build leaders. Individuals who don’t blindly follow. Rather, they grasp the principles of what I write about and apply them to their own situation.
# 2 – Fixed, Freedom, and Fulfillment
Finding the balance between your fixed, freedom, and fulfillment expenses is the key to your current and future financial success.
I consider your fixed expenses your living expenses, your freedom expenses as investing and saving, and fulfillment expenses as anything that fulfills you, such as giving, education, traveling, etc…
Most personal finance “experts” will tell you that your fixed expenses should be around 60%, your freedom 30%, and fulfillment 10% of your income I think most financial rules of thumb are worthless. The only person who should decide what you should be spending your money on to get the most out of life is you.
# 3 – Success is More than just Information
After reading a few blogs and a few good books on personal finance, you can probably guess what action you need to take next. Planning your finances in your 20′s isn’t difficult. There’s not much you need to know to start paying off debt, for example.
The problem comes implementing what you know. I’ve seen it take friends months or years just to develop a plan to pay off credit card debt. They know the entire time what they need to do, but yet that can’t do it.
Gen Y Wealth’s goal is to help eliminate that gap between information and action by identifying the beliefs that are holding you back. I offered a solution last Friday but expect more on this to come.
# 4 – It Comes Down to Priorities
You can have just about anything you want in life, as long as you prioritize it.
The following is easy to say but hard to come to terms with – your past financial behavior doesn’t lie. If over the past 12 months you spent $2,000 on clothes and $0 on something that you say is more important to you, like traveling, you’ve placed a higher priority on clothes. It’s not necessarily a bad thing but it’s important to get the facts straight.
The good news is that you’re priorities can easily be changed.
{ 2 comments… read them below or add one }
On your last point, very accurate. Once I started using Mint to budget my expenses, I realized where I was placing my priorities, and they weren’t in the places I thought. Follow the money, and make some changes to reflect the behavior you wish to endorse.
Pat
http://compoundingreturns.blogspot.com
Great to hear Pat.
You’re not alone. I fall into this trap often to. It’s easy spending money on other’s priorities instead of your own.