We all have reached a new level of success, but with money being so taboo in this country; nobody ever talks about what to do next. The next steps you take after a new level of success will really impact your life in unbelievable ways. Do you know that I can count in my hand how many times my parents spoke to me about money while growing up? I got the most influence from watching their behaviors and not from their communicating abilities. New level of success, what’s next?
We all need to talk more about how to go about doing the next personal finance steps, but people need to be open to hearing a different financial viewpoint. NO you don’t have to settle with having debt forever. No you don’t have to have a brand new car right out of college. It will be up to you to live in your truth or fall victim to the banks game. The fico bosses will lure you to continue playing that debt game, but will you listen. I will not play their games anymore. I don’t need a credit score to buy a home, and that is the only thing that I will ever borrow for again.
New level of success, What’s Next?
– You graduated high school now, what’s next? – In the summer weekends dedicate some fun time for yourself, during the weekdays allocate some time to work, which will help you avoid going into debt during college.
– Four years later the 2nd cap and gown is achieved, with a diploma in hand, now what’s next? – Lock down that internship for the summer and or fall. If you already have a job, great stay the course and continue to keep expenses low living like a college student, do not buy anything worth more than 40-50% based off annual income (aka a brand new CAR). DO not lose the power of cash flow by getting into CC or Car debt. If you still live at home with parents, pay them $200 dollars a month in rent, and save 50% of income. Stay for 1-2 years max; if job is stable, and you are debt free buy a manageable property with the savings you accumulated.
– After 3 years you have dug yourself out of debt and you got to finally yell, “I am Debt Free”. – Continue to send the last debt payment amount to your savings or brokerage account, build that nest egg up by not changing your spending patterns too drastically. Now you will be on the other side and feel just like the banks feel building a boat load of dollars and compounding it for years.
– Business is slowing down after a good 4 year run, now what’s next. – Well it depends on how you see the market, is it expanding or not? Do you still want to compete in the same space? If the answer is yes and yes, then you have to either provide something different and new while being innovative. Get new ideas from customers how to deliver it and expand your network to attempt to attract new customers. Being an entrepreneur might seem hard, show great desire to achieve and you will see results.
– You have successfully paid off a car in 5 years, now what’s next? – DO NOT GO TO the DEALERSHIP to window shop because the vortex and allure of a new set of wheels will sink you into another car payment. Avoid them for at least 4 years after paying off the current car. Stop being so patriotic by supporting these car brands, save your wallet and hold off buying a car for a long time. It will separate you from being average, and will allow you the cash flow to fund kids’ colleges or a retirement account in the millions. (You decide)
– You received a big bonus or an inheritance / settlement, what’s next: Well if you do not want to blow the money like Bernie Madoff, you have to set it aside away from your checking account. Place an equal amount of 3-6 months living expenses in your online savings account. (If you don’t have one open one immediately) Second if you have money left over, buy a few index funds based off the S&P 500 index. This will help you begin to grow that money. Next if you have some dollars left over set it aside in a different savings account at a credit union for any other financial goals, like a vacation, to replace an old car, or to buy a home. ( Do not get a debit card for this account- it will help you avoid taking it out on impulse) Last if you still have money left over spend some. To recap you can do a split of the money like so – 30% emergency funds, 30% index funds, 30% short term goals and 10% blow money.
Comment if you if you have reached a new level of success and you want to discuss the next steps?
Rich Uncle EL
Very sound advice here. My niece is actually thinking of buying a small condo but she hasn't saved much while living with her parents. I'm concerned she's rushing into buying but then again it might be ok. She has no student loan debt or car loan debt.
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I hope she can use the advice you give her, the most important aspect to being a homeowner is that your housing costs should never be more than 30% based off income.
Great advice. In other words, when you reach a financial milestone, don't ruin it! =)
Exactly the message I want others to get from the post Holly. Thanks for the comment.
Interesting read. I agree that one should use the momentum from one accomplishment to move into the next. It’s important not to fall back into the cycle of accumulation and new loans. AFFJ
A Frugal Family’s Journey recently posted..2-YEAR Collection of Stock Analyses!
Yes I agree, it’s a tough battle, so why go back into debt or bad financial behavior when you have great success.