FINANCIAL ADVICE Archives | Page 2 of 2

When Shall You Ask Your Parents For Financial Help?

I cannot deny the fact that there is a wealth of financial information available in the Internet. However, the most underused financial support may be located at the comfort of your own home. Admitting you need the financial help of your beloved parents is not a simple task, but it is crucial in specific cases.

Know when to ask your parents for financial help and when not to.

DO’S: DO ASK FOR MONEY WHEN YOU ONLY NEED A RELATIVELY SMALL AMOUNT.

You are days away from receiving your coveted paycheck. The only problem is, you end up spending more than you meant. It happens! If you are lacking a few bucks to get through the days, you can call your parents to ask for a small loan. An extra S$50-S$100 can make all the difference at the end of the pay period.

This relatively small amount will be easy to return. Furthermore, it will not pose too much strain to the finances of your parents.

DON’TS: DO NOT ASK MONEY FOR A VACATION.

It is totally acceptable to ask your parents for pocket-money in order to fund your school excursions. However, it is not appropriate to ask your parents for travel fund if you are employed on a full-time basis. Reaching your dream vacation comes with a bag of determination and a realistic budget. Like a mature adult, plan to save the necessary amount and earn extra money if you have to.

DO’S: DO ASK FOR MONEY WHEN YOUR EMERGENCY FUND ISN’T ENOUGH.

Unforeseen events can spiral at any moment and you will not be able to handle every situation on your own. No one can predict that a vehicular accident may strike even if an individual safely cruises his or her car everyday. This may entail a significant medical procedure that the insurance company cannot cover. When your emergency fund and your back-up financial plan cannot cover all your expenses, it is acceptable to ask your parents for support.

DON’TS: DO NOT ASK THE IGNORANT FOR ADVICE.

My friend grew up with a silver spoon. His family had multiple properties and threw multiple parties. Basically, they purchased whatever they wanted. His parents’ mindset was that their money will last forever. Since his parents highlighted on the short-term wants rather than the importance of the long-term financial goals, my friend copied their spending patterns.

No money management skills were shaped during his younger years. He carried this out as a young adult. His parents appeared to have everything in order. But if you look closely, you will realize that his parents did not handle their financial responsibilities well. Decades went by and my friend’s family lost everything they once owned.

Image Credits: pixabay.com

If your parents are clearly not displaying financial discipline, do not mimic them. Educate yourself about the importance of savings, investments, and retirements plans. Sometimes, it is better to do things on your own.

Sources: 1 & 2

Brightest Financial Nuggets From Acclaimed Dads

A man who exercises parental care over other people and acts as a protector or a provider – that is the textbook definition of the word FATHER.

But the real nature of a father and his child is more complex than that. My father was the first person to tell me that my dreams are valid. He taught me how to deal with difficult people and to laugh at life’s problems. He worked hard to ensure that I finish my studies on exclusive institutions despite how hefty the costs were. Truly, my father is an amazing human being and I am proud to call him my DAD.

Like my dad, most of the fathers out there are great at giving advice about work, love, and money. Their advice may be clichés at times but the wisdom that they passed on often sticks with their children. So in the cheerful spirit of Father’s Day (June 19), I present you some of the brightest finance advice from experienced dads…

1. KNOW WHAT AN ASSET IS

Robert Kiyosaki, the author of Rich Dad, Poor Dad, believes that it is important to “know what an asset is, acquire them, and become rich.” Its premise is simple. To become financially independent, you must acquire income-generating assets which can pay for all your expenses. The only problem is that some people do not know how to differentiate between an asset and a liability. Instead of purchasing equities or bonds, these people purchase iPhone and MacBook.

Image Credits: pixabay.com

2. MAKE MONEY WORK FOR YOU

David Richmond is the founder of a financial planning firm called Richmond Brothers, while his father worked in the insurance industry throughout his life. David’s dad reminded him that there are two ways to make money: to earn it or to grow it. Merely working for it and witnessing it grow can be hard as you can only work so much. This is why you must incorporate the two ways. Your hard-earned money must be saved and be able to grow with an interest.

3. WORK HARD DOING WHAT YOU LOVE

How does one begin to describe the powerhouse that is Donald Trump? For starters, he is running for United States’ 2016 Presidential election. But he is best known as a businessman and a television personality. His father, Fred Trump, was the original real estate tycoon in the family. He owned the company Trump Management Co. where Donald first worked for. Despite the “scandals” that Fred have been through in 1954, he bounced back and built affordable rental housing system in New York City.

Donald Trump was once quoted saying: “My father didn’t give me much money, but what he did give me was a good education and the simple formula for getting wealthy: Work hard doing what you love.”

4. DO NOT SWING AT EVERY PITCH

The iconic Warren Buffett once gave an advice to his son Peter Buffett about investing: “You don’t have to swing at every pitch.” It is direct yet full of substance. When investing your wealth, it is important to wait for opportunities that fit your criteria (e.g., your needs and personality). And if nothing of that sort comes along, you must wait patiently and practice perseverance.

Image Credits: pixabay.com

Sources: 1, 2, & 3

Must Read: Best Financial Advice From The Experts

If a financial expert is out of your reach, the next best thing is to read about their nuggets of wisdom.

1. GEORGE KINDER

George Kinder’s professional background is impressive. He is a financial author, a certified financial planner, and a founder of The Kinder Institute. He surely know what he is talking about when he said:

“It’s about the meaning, not the money. If my investing is not really deeply tied to what I think is most important in my life…the asset allocation, the estate plan, [and] the retirement plan might as well be thrown out [of] the window.”

Putting meaning to the currency motivates and directs you to your goals. If good health is vital to you then spending money on organic food is not a problem. And if family is your top priority, allocating assets to your children should be a part of your Last Will.

2. CULLEN ROCHE

Cullen Roche, the founder of Orcam Financial Group and Pragmatic Capitalism (website), shares that the primary way to financial success is more than just saving. It is by investing more…in YOU! Since your primary source of income is the person you see in the mirror, a good way to maximize your wealth is to make yourself valuable to other people or other companies.

To have an edge from the rest, you must never stop learning. Education that improves your skills so you can adapt to the ever-changing economy. I personally recommend you to start with free Internet education from YouTube’s Khan Academy, YaleCourses or Crash Course.

3. FRED SCHWED

A timeless advice resides in the classic book by Fred Schwed entitled Where Are the Customers’ Yachts?. As published in 1940, Schwed wrote:

“Like all of life’s rich emotional experiences, the full flavor of losing important money cannot be conveyed by literature. Art cannot convey to an inexperienced girl what it is truly like to be a wife and mother.”

Paradoxical as this may sound, the book expressed that life is more than just something you read from a piece of literature. Same goes for finance. You cannot simply learn and understand everything about money by merely reading two books written by experts. Instead, you must experience wins and failures firsthand. An investor can never detach himself from his portfolio gains or his portfolio losses.

4. MIRANDA MARQUIT

Miranda Marquit, the founder of Planting Money Seeds, highlights that by knowing that you have enough purchasing power may turn into comfortable spending without keeping the best options for your finances. Just because you can afford something, does not mean that you should buy it. Purchase within your means by balancing what you need and what you want.

5. WARREN BUFFETT

Warren Buffett needs no introductions. As he is extremely frugal, he shared this sentiment: “Price is what you pay; value is what you get.” Frugal people know how to distinguish between the price and the value in order to get the best deals and achieve long-term goals. For instance, a frugal person will use accumulated coupons and purchase items that are only on his or her shopping list. While a cheap person will highly decline to spend more than S$90 on a week’s groceries even though it is not sufficient for the whole family.

Be frugal and not cheap!

Sources: 1,2 & 3

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