How many more corners?
Personal finance, done well, is incredibly boring. Learn some simple concepts, establish good financial habits, and wait for twenty years.
Nothing seems to happen for ages, then you look around and everything has changed.
It's kind of like watching a child grow up. You don't notice as they gradually change each day, not until you see an old photo or someone comes to visit.
Or like improving your diet and upping your exercise levels (something I am trying to do at the moment). No changes for weeks or months, but one day you are slimmer or more toned.
So what are the simple concepts?
- Anyone can do it
No matter how precarious or fantastic your financial situation seems to be, you can improve it. There is always something to try.
- It isn't difficult
Personal finance is not difficult. It is actually very simple. Many companies and professionals would like you to think otherwise, because then they can take advantage of you.
- You don't need big wins
Chasing after big profits is probably less useful than doing the right thing over time. It's a lot like the tortoise and the hare.
And the habits?
- Spend less
Be really conscious of what you are spending money on, and why. Is your spending making you happy?
- Earn more
Get a better-paying job or do some freelance or part-time work.
- Save more
Try to save at least 20% of your income. If you haven't started saving yet, save 1%. Then next month try to save 2%.
Once you have an emergency fund (enough money to protect you from unexpected expenses) invest. Low fees, diversification, and time are your friends.
If you would like to learn more, read through the archive here, ask a question in the forum, or come to one of the upcoming RetireJapan events around Japan.
No one has all the answers but together we can figure it out.