Discipline Is Still Needed For Financial Success

Discipline and Money Management 

Many things have changed, but the basics of making money remain the same. Discipline is a skill you will need to create wealth and become successful financially. Winning the lottery or being born as a billionaire Saudi princess will not happen to most of the general population. And it even does not come to a percentage - when you look at people who are rich that way. So hoping for an unrealistic way to become wealthy will not do any good and that sort of thought should be avoided in the first place.

It is not hard to achieve your financial dreams. You only need to know a few simple, basic rules. And following those rules with discipline will make you accomplish your goals. Many personal finance websites are packed with these basics to explore for free. You only need the willingness to learn and apply towards reaching your financial goals - and you need discipline to accomplish that along the way.

If you are reading this article right now, it is highly likely that you already have a decent paying job or entrepreneurship. If you don’t, you will soon have it because you are a smart and educated person, and that’s what lead you to this website in the first place. Discipline can make the difference between two identical same level money earning individuals reaching financial goals and never reaching financial goals.

Let’s look at two imaginary individuals A and B. Both have good paying jobs. Both live in the same city. A spends all his money eating out at restaurants, taking expensive vacations on credit cards, buying the latest electronic gadgets, and living in expensive houses he can’t afford. He has lots of credit card balances and never disciplines himself to set aside money for the future. His logic is that life is too short not to enjoy - and he wont be able to enjoy these once he is old. So let’s enjoy as much possible right now and forget about the future.

Author/Copyright: Ahmed Dawn www.adawnjournal.com

B takes a different approach to life. He thinks life is too short to work for someone else - and he does not want to spend all his life working for a corporation only to pay off his credit card bills and things he would not have enjoyed in the first place. He aims to end working for someone else and wants to live on his own terms as early as possible - while he is still young. He disciplines himself saving and investing every penny he can get and so far he is doing pretty good. He was inspired after reading a few articles and books by financial author A. Dawn and reading more financial books and articles to enhance his personal finance knowledge since then. His favourite one is this: Ten Timeless Personal Finance Tip.

The obvious difference between A and B is that A will still have to work to pay of his credit cards bill when he will be required to get hip replacement surgery. A failed to realise that to enjoy his life now, he chose to work all his life to pay off his bills. He will never be free from his debts and will die one day working and worrying paying off his bills. B will accumulate enough savings early enough to retire and enjoy his life without working for someone else and without worrying about paying off his debts. He only needed the willingness to learn and the discipline to apply what he learned.

It is still not too late or early, regardless how old you are, to decide whether you would like to be A or B. I have chosen to be B and I have many tools to offer to help you reach your goals for free. Feel free to browse all my websites listed on the right panel of this page. And don’t forget - discipline cannot be replaced by anything else and has no substitute.

5 Money Tips for Financial Success

Five Personal Finance Tips You Need to Know Right Now 

In order to become financially successful, you don’t need to spend year after year pursuing an MBA. Doing simple things consistently and religiously year after year can lead to the path of financial success. Today, I will describe 5 such things. 

Spend Less Than You Earn
 – Stick to spending less than your income, and financial success will come to you. This is the most important financial tip ever. If you can’t do this, doing everything else will be meaningless. 

Pay Yourself First
 – Depending on your ability, save 5 – 15 percent of your gross income into an investment account, mutual funds, registered account, etc. Stick to this plan as long as you can afford to.

Build An Emergency Fund – Set aside six months’ (or more) worth of living expenses in a savings account or in an investment that is comparatively safe and can be withdrawn in a short notice without paying any penalty. 
Set Goals - Know exactly when you would like to accomplish various goals throughout your life such as buying a house, paying off mortgage, retiring in the future, and so on. Take necessary steps to realise these goals. 

Review Progress
 – Review your progress at least once a year. If you are not on the right track towards achieving your goals, change and readjust your financial roadmap. Consult a fee-based financial professional if necessary. If you don’t have the knowledge to invest by yourself, seek professional help. I recommend fee-only financial professionals.

Personal Finance and Kids

Kids Need to be Taught About Money

First Published: June 23, 2009 ADawnJournal.com

The Alberta Finance Minister has said that both parents and the government need to take a firm hand in teaching kids how to be financially responsible now and in the future. With the current global financial situation having some bad news for everyone, even among the growing number of positive signs, it is now viewed as absolutely essential that sound financial planning is given the emphasis it requires at all levels, rather than leaving children to find out about the intricacies of the subject first-hand when they leave college and start looking for work. The minister, Iris Evans, said that her own children – all of whom are now grown up – have succeeded in life because she made sure to teach them about money.

Although not everyone would agree with the entirety of the Minister’s speech – which made great play of the importance of each family having at least one stay-at-home parent – the message of teaching children about money and how to handle it is one that will surely recur as we work to get out of the troubled financial climate of the present. At least some of the problems that the world is currently dealing with have something to do with irresponsible consumer borrowing and spending, and if good habits are locked in at an early stage then there is all the more chance that financial crises like the present one will be rarer and shallower in future. What the government may do remains to be seen, but there are plenty of things that a parent can do to instill the right habits in their offspring.

Savings accounts are something that will often be encouraged for the very youngest kids, but when they get to around the early teens the interest seems to drop off quite considerably. Finding a way to encourage your teenage child to save and pay close attention to the value of money is not difficult. All that one needs to do in the present climate to make one’s children pay heed to the importance of sensible financial practices is watch the news with them. As banks, businesses and other organizations battle the ill-effects of financial laxity, there has never been a better opportunity to pass on a message of caution.

It may be increasingly difficult in this day and age to avoid debt in one’s everyday life – particularly if one intends to make a go of a business career at any point – but a bit of financial wisdom can give the children of today the thought processes to deal with the future in a mature and secure way. Don’t teach them to be afraid of debt, but to understand good and bad debt. Don’t let your children see loans as free money, nor see savings as being boring or cheap. Good financial sense starts at an early age, and with a bit of forward thinking can lead to a very satisfactory future. Instilling these messages will mean less likelihood of a repeat of what we are currently dealing with.

Why We Spend Unnecessarily and What to Do About It

Why People Spend More Than They Earn

First Published: ADawnJournal.com July 21, 2010

Remember “the number one personal finance tip of all time” I mentioned in Ten Timeless Personal Finance Tips By Financial Author A. Dawn article? That is, you need to spend less than you earn. To spend less, you need to know why we spend more than we earn. If you can grasp the basics of the “spending more than earn” scenario, it will be a lot easier for you to save money by spending less. Let’s look at the most important factors that cause us to spend more.

Lack of Information – The majority of the population have no idea where their money is going exactly. We often ignore small spending here and there; but at the end of the month all these tiny expenses add up and turn into something big and beyond our control. To handle this, you need to keep track of your spending. I don’t believe that dollar-for-dollar budgeting works. However, you need to keep track of your spending to see the patterns in your spending behaviour and take steps to cut down on unnecessary expenses. Here is an article to help you find personal finance software to track your spending: Personal Finance Software Review by Financial Author A. Dawn

Lifestyle Habit – Keeping up with the Jones, competing with colleagues, a tendency for showing off riches to the world, acting rich and successful but not able to survive without steady paycheques, feeling a sense of power while spending money, being jealous at other people’s stuff and trying to match their possessions, an inability to say NO to others when they ask for something (although you’re not in a position to afford it), not treating credit card spending like real money, not being true to yourself, and much much more – all these are variations of lifestyle habits. Let’s be honest here – If you aren’t able to save money because of one of these reasons or a similar one, it can be a serious problem and has to be dealt with seriously. I doubt that reading articles online will be any good resolving this. If you think you have this problem, I would suggest you read a few books, and based on the severity of your problem you may need to consult a qualified financial professional. Books I recommend:

The Simple Living Guide
Your Money or Your Life by Dominguez and Robin
The Millionaire Next Door by Thomas Stanley & William Danko

Instant Gratification – Here is an excerpt from my book Invest Now which is very suitable: “Every day, we face tempting opportunities to spend money. A sea of indulgences can distract you from investing for your future. “Buy now!” “Pay after one year!” “Don’t pay interest for six months!” Everyone everywhere is urging you to spend, spend, spend. I’ve even seen a “Vacation now, pay later!” advertisement on the subway. But every dollar you spend now is a dollar in lost investment opportunities that could have grown a lot more in the long run”. We are bombarded every second to buy into some “now and pay later” scheme. We want what we don’t need when we want it, and are willing to drag on paying interest to fulfill our instant gratification mentality year after year. What we don’t realise is that a $100 item is costing us $150 at the end of the interest paying term and it is prohibiting us from investing for our future – because we are paying interest on many other similar things and becoming money constrained. How should you handle instant gratification syndrome? Here are a few simple tips: try to pay for everything in cash; learn to delay major money sucking purchases, your urge will likely wither away if you can delay a few days; if you are at a store and can’t stop yourself from purchasing something you don’t need and/or is out of your budget, try counting 1 to 10, or take a few deep breaths, or try walking around the store. Once you try one of these; most likely your strong desire will go away.

Not Having Any Goals in Life – We tend to spend recklessly if there is nothing to look for in the future. Setting up goals for different stages in life is a smart way to save money and accomplish goals. These goals can be broken down into smaller parts. For example, instead of saving for a $20,000 down payment for a condo, it’s a lot easier to save $5000 each year for 4 years. Also, have set plans about your life such as buying a house by 30, paying half of the mortgage by 40, retiring at around 50, and so on. Each time you purchase something, think before paying for that item. Take a moment to think whether this purchase will help you achieve your goals or will take you away from your goals.

Whether your spending habit is causing you debt problems or keeping you from achieving your future goals, take a deep look at the causes and eliminate them to start saving for your life. No one else will care for your future and money like you do, and only you can take the necessary steps to secure your financial future.

My Favourite Money Quotes

Money Quote Tips

I would like to share two of my favourite money quotes with you. The first quote is going to be in my first book Invest Now. The second quote will be in my second book Save Now, although I am not 100% decided yet about the second quote.

First Quote 

Money is like a sixth sense—and you can’t make use of the other five without it.

—William Somerset Maugham

Second Quote

The art is not in making money, but in keeping it.

—Proverb

First Published: ADawnJournal.com Dec 10, 2007