Be smarter with your money. Learn about the basics of personal finance and what it can lead to.
Every personal financial consultant loves to talk about fancy tax-friendly investment products, yet they are only helpful if a solid financial base has been established. If there is no base, all the investment vehicles in the world will not help; in fact they will just mask a bigger, underlying problem. This problem can become especially severe (and it is for many here in Southern California and all across the US), and any financial adviser who selfishly promotes an investment product to a client without first establishing a solid base is doing a huge disservice at best. At worst, it’s like putting a band-aid over cancer. Fortunately, there is a cure!
Personal Finance Basics
What financial base are we talking about? Well, let’s talk about personal finance basics. Question: Is the money you’re bringing home after-tax (net earnings) greater than the money you’re expending? If you answered “yes”, congratulations! You have a solid base to begin building your future financial security and should consider Mangus investment vehicles. If you answered “no”, this is where we start. If you answered “dunno”, you’re actually like the many Americans who rarely glance at their bank account and thus financially blindfolded.
The Bottom Line
Your net earnings, regardless of how much, MUST exceed your total expenses. To illustrate this point, consider a billionaire who spends one cent over that amount; he or she is still financially underwater!
Take comfort in the fact that you are not alone in the struggle for a secure financial position – 76% of Americans are one paycheck away from declaring personal bankruptcy. This is an incredibly distressing statistic for at least two reasons:
- America is the world’s wealthiest nation.
- It need not be this way! If everyone had a little help from an accredited financial planner, this statistic would substantially decline.
Behavioral Rewiring
What this also shows is that changing behavior is often more important than changing mutual funds. Think about the behavioral rewiring that is desperately needed regarding common status symbols when you look at these questions:
- Is an expensive condo really making you more true friends, or is it just being used and abused by people who don’t care about you?
- Is that fancy car you’re making huge payments on every month (not to mention overpaying registration and insurance costs because you don’t own it outright) really making the impression you want it to?
- Are the two items above worth being an over-worked and stressed out person tied to a job you hate, but desperately need to maintain them?
The solution is simple – be smarter with your money
But as I said, this is easier said than done for so many people and very often requires a completely new paradigm shift. Where do you start? Right here.
Contact Mangus Today For A Free Consultation: (818) 577-5576
Marc Ang (Mangus) is a financial planner based in Claremont, CA, focused on spreading the gospel about responsible, educated and smart financial planning.