15 Golden Rules of Personal Finance Security

15 Golden Rules of Personal Finance Security

 1. Your employment provides your wealth

Your personal finance security starts with getting the best job possible, and keeping that job is your primary path to wealth. Consistent paychecks over time will fund your savings, retirement, emergency and college accounts. Taking courses and jobs that train you to move upward are the best ways to consistently increase your salary over time.

2. Don’t assume you can replace your wealth

If you understand that every single dollar you accumulate, whether it is from employment, inheritance or any other windfall is precious and you manage it as though it were your last. People who don’t understand this, acquire money, sometimes large sums and spend it foolishly because they feel there is always more where that came from. This is not necessarily true, many don’t find this out until they want to retire and realize spending retirement money before they retire or simply not saving enough, is a major source of elderly poverty.

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3. Create a bulletproof portfolio for security

Learn the basics of investing. Here you can choose low cost, low risk investments for your retirement and other investments. There are many investments that are easy to understand and easy to monitor. Monitoring your own investments gives you peace of mind.

4. Recognize the difference between investing and speculating

Investing is placing money in a vehicle that will grow over time — provided you choose wisely. Speculating is more like gambling, or placing money in investments you don’t have a clear understanding of, and hoping they make money over time.

5. Speculate with money you can afford to lose

When you go to a gambling casino, you would not gamble with money you need, like your house note. The same is true with speculating, since it has a tendency to be high risk investing, make sure it is small enough so a loss will not impact your finances.

6. Don’t depend on any one investment, institution, or person for your financial advice

The more you research, the more you learn, the least likely you are to be cheated by an adviser or institution. Remember Bernie Madoff, when questioned, all of his clients said they used him because they trusted him. They did not do their homework on his company and hence, he stole their personal finance security. A check at finra.org, would have shown he was not a registered investment adviser.

7. No one can predict the future

If anyone tells you that an investment will go up with 100% certainty be very suspicious of this person. If anyone gives you a definite percentage the investment will go up, be suspicious. Many investments have past histories, but even those cannot tell you with certainty what the future will be.

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8. Whenever you are in doubt about a course of action, error on the side of caution

After doing a lot of research and you still have doubts about a person or institution to invest with, you may want to consider other options.

9. Don’t ever do anything you do not understand

Some brokers will tell you, I know you don’t understand this investment, but just take my word, it will work out. If you don’t clearly understand what they are clearly selling you, wait until you can. You cannot buy personal finance security, but you can use your common sense to keep yourself safe.

10. No one can move you in out of investments consistently with precise and profitable timing

Moving in and out of investments is expensive. Every time you buy and sell an investment, there are cost. Anywhere from home sales to buying stocks or mutual funds. Some cost are far greater than the gains on the product. Investment growth happens over time, the longer you wait the more you make, and the less cost you will pay, due to long term capital gains.

11. Use leverage with caution

When someone goes completely broke, sometimes it is because they used borrowed money. The more money you have to borrow to invest, the more likely you are to get higher interest rates or low quality investment products. The lower your debt, the better chance you have to save money for investing.

12. Beware of tax-avoidance schemes

Every so many years companies come up with financial products that help you to avoid taxes. If it seems too good to be true, it probably is, so be cautious. Sometimes these products are disallowed years after they are put in place, and you will lose your deductions.

13. Enjoy yourself with a budget for pleasure

While it is important to save and invest for general purposes and retirement, it is also important to budget in fun. Fun as in vacation fun or weekend fun, of course within the confines of your budget.

14. Live within your means

My motto is, “Live Within Your Means, and Your Life Will Mean Something“. This will save you money, pain and heartache in the future. The more you place limits on spending within your budget, the better you will feel all around; financial, emotional and mental stability.  This is the summation of personal finance security.

15. Protecting your assets with insurance and estate planning is essential

After saving, investing, and having a fun vacation, it is absolutely necessary to protect all you work for or it can evaporate with one bad event. A car accident or home disaster can loose everything if you are not properly insured. Your estate plan will protect your loved ones.

Lois Center-Shabazz | Course Delta Agency
Personal Finance: Author, Blogger, Course Creator, Money Strategist

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15 Golden Rules of Personal Finance Security

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20 Responses

  1. Marysa

    These are all great points to consider. It is important to make sure that we are always on top of our finances and not to let ourselves become careless.

  2. Jennifer Van Haitsma

    These are great tips. I am so glad my husband is good with this sort of thing because for whatever reason it all goes over my head, and stresses me out LOL

    1. Gervin Khan

      Thanks for sharing this, I learned a lot of things about finance because I definitely have no idea how to handle this kind of thing.

  3. Pam Wattenbarger

    While I agree with all your points, I think living within your means while budgeting some for pleasure is especially important. I’ve seen friends buy things they couldn’t afford to impress others.

  4. melissa chapman

    These tips are so valuable. I do not know a lot about investing but understanding what everything is is a smart idea.

  5. Serena Hale

    Enjoying myself but utilizing a budget is one of the best ideas. I truly mean that. We sometimes think we have to cut off everything instead of going utilizing discounted ways and utilizing a budget and don’t go over it.

  6. heather

    All of these are important to consider for financial security. These are especially important during these uncertain times.

  7. Brandy Ellen Writes

    I’ve always been big on handling my income as something that won’t last. I have received some big client payouts in the past, and I used them smartly. Either to pay off bills or to try to put into savings. Granted, I had to use them up at some point for necessities, but I was glad I had chosen to save them. These are some excellent golden rules about personal finance to share with everyone.

  8. Sarah Bailey

    I most definitely need to try and remember and put into action some of these rules – especially right now with everything so uncertain.

  9. Rosemary

    These are great tips and especially relevant now as we head into an economic depression. Getting the right advice and support is critical! Thanks for sharing.

  10. Los Tweens & Teens

    A great list to share with teens as they start learning to think about money more strategically. Thanks for sharing

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