16 Money Principles to See You Through Thick and Thin

We all desire to live comfortably through our working life and to retire into sustained comfort when we become inactive due to old age. Even in the challenging circumstances of inactivity induced by illness or accidental incapacity, the expectation of reasonable comfort does not diminish. The reality, however, is that maintaining a comfortable lifestyle necessarily costs money, which unfortunately, is not freely available. Building sustainable financial capacity is hardly a chance occurrence - it is programmed and worked for.

So, if you are hoping to live a financially stable, fulfilled and comfortable life, you need to get programmed early for that success. This article provides a foundation of sixteen proven financial principles that you can leverage to achieve financial success.

1. Start Early
You want to get a grip on your finances? Starting early is a golden rule. Time, remember, is money and shouldn't be let slip. Time also nurtures your investments and the earlier you engage this process, the better for you. You not only boost the potential for investment growth through early action, you also position yourself to act more courageously in view of the ample opportunity available for remedial action, should anything go wrong. Timing is also critical to actions you take when opportunities emerge that can advance your financial standing. When you fail to act promptly, opportunities slip away and you miss the chance improve your financial position. Now is the time to begin to work for your financial success.

2. Articulate your Perspective on Money, Wealth and Success
You should be clear in your mind what money represents to you as you don't want to be buffeted by everybody's views on money. Is money an end to you, or just a tool for service to humanity and for sustaining yourself? If you want wealth for its sake, you'd probably do anything for it. Your quest for financial success should however be rooted in and aligned with your personal values and principles. It is also important to come to terms with the reality that your financial success depends principally on you and what you do. Buck-passing will never help. However, trust that the principles and systems that can empower and leverage you to financial success are learnable, if you apply yourself to that pursuit. You simply need the will and commitment.

3. Urgently Seek And Acquire Financial Literacy
Understanding financial success principles will empower and prime you for financial breakthrough. Your basic education and training are not enough if they don't condition you for confronting the financial success challenges life presents. The tools of financial management can accelerate your success, but you can't deploy them if you don't have the knowledge. Fortunately, sources of financial education are not hard to come by. This website is committed to teaching those principles and providing other tools that afford you the life-changing knowledge and information. So are many other websites, financial magazines, books, newspapers, TV programmes, seminars and numerous other channels. The opportunity for learning is practically limitless, except for the individual that chooses to remain in darkness.

4. You Need a Financial Plan
To get your personal finances into shape, you need to get organised about the process, and above all, you need a financial plan. Your financial plan will articulate your destination (long term goals) in specific terms and define your action plan for achieving the results you want. Having a powerful plan will inspire you and provide the impetus to achieve specific milestones. Don't try to coast through life, without clear, specific goals or a defined means to achieving them, because, that way, you will only be courting failure and financial trouble.

5. Build Your Earnings Capacity
When you set financial goals, you need a viable vehicle to ride to your targeted destination. Or, better still , a set of vehicles. Simply put, you need to keep growing your earnings capacity.Your choice of how to achieve this will depend on your interests, passion, skills and experience. Some options will include acquiring specialised skills (become an expert in some marketable field), boosting your contribution to and relevance in your organisation if employed (you will earn more when you become 'indispensable'), building a business or developing other channel(s) for passive income. Whatever options you prefer, your goal should be to earn your worth for the time and effort you invest. So, hone your skills to be a big earner. While what you earn will not automatically guarantee ultimate financial success (it could all be frittered away), earning meaningful income provides a strong platform for building financial independence, if you engage the resources wisely.

6. Develop and Operate a Budgeting System
A budgeting system ensures that the application of your earnings is based on a careful allocation which takes account of your financial goals and financial plan. A budget compels you to think through your spending profile and to deliberately justify the inclusion of any expenditure item. It also affords you an opportunity to evaluate your earnings to see if more spirited effort at increased income is imperative. A budget identifies your income sources and defines how much of this will be applied to purposes you have elected as your priorities. Build a habit of drawing up a budget because it is the basis of financial discipline which you need to succeed. An annual budget will provide an overall plan for the year but requires monthly breakdowns to allow you closely track the use of your monthly earnings. Good budgeting is complemented by a record of details of income and spending.

7. Nurture a Savings Mentality
A habit of saving is not so easy to cultivate, as important and fundamental as this is to financial success. The reason is simple: saving entails sacrifice, a decision to deny self or one's dependants, albeit for a superior purpose. Immediate gratification is a more natural choice for many and often people experience an impulsive and compulsive urge to satiate their immediate desires. When you seek financial growth, you can't afford to run riot with spending. In fact, you need a deliberate savings plan that ensures you save and save and save. You've got to clearly and firmly decide what proportion of your income to save on a regular, consistent basis. This has often been referred to as paying yourself, which should be the first claim on your income. If you develop a strong savings mentality, you are also likely to save every windfall that drops on you - bonuses, winnings, gifts, etc. Always weigh the benefit or pleasure of immediate spending with the potential value of an investment alternative.

8. You Must Invest
Learning to invest should be a logical follow up to your budgeting and savings habits. The earnings you set aside should be carefully channeled into sound investments. Seek professional advice, if you have to, but ensure that what you save is ploughed into investments that offer the potential for reasonable returns and, more importantly, significant growth over time. You must therefore learn to seek out quality investment outlets with growth potentials. Strive too to invest with regularity (no matter how little) and as much as possible, to re-invest the earnings on your investments. Any retirement benefits scheme, if you work, should be driven to full advantage. Diversification will help to cushion risk, so you need to include achieving a diversified portfolio into your investment plan. This includes retaining some investment (you determine the appropriate ratio) in relatively liquid instruments to meet emergency funding requirements. You may also take advantage of age and get a bit aggressive to target higher returns. Much later in life, this will likely become less attractive, so now may just be it.

9. Avoid Debt
For now, our economy lacks the luxury of easy credit cards and, in a sense, this is positive as it helps keep people off easy debts. Of course this has its cost in terms of the lost impact on the velocity of economic activity, but of what use is economic tempo at your personal expense? Well, you are not exactly free because banks are today offering lots of consumer facilities and salary-advance products that are relatively easy to access. Just beware! Driving yourself into debt for consumer products and recurrent expenses will not advance your financial status and can only detract from your quest for financial independence. Just sit back to calculate the interest exposure. Often you pay back close to twice what you borrowed. Besides, the indiscipline of spending your earnings in advance has the potential to drag you into financial crises. If you're already entangled, begin to work out an exit strategy and learn to live within your means, except when you borrow for investment. It's important, too, that when you borrow, you ensure a clean repayment record. Your credit history should be impeccable - just in case there is justification to borrow again.

10. Make Good Lifestyle Choices
Individuals live differently, with diverse interests and pre-occupations. What is clear is that what you do or fail to do and in particular, your lifestyle, will have direct consequences for your expenditure pattern and your financial growth. Strive to align your lifestyle with the financial plan you develop for your life. It will be unproductive to live in a manner that erodes your capacity to pursue the financial objectives you've set for yourself. You must therefore deliberately make choices and develop a pattern of living that is congruous with the attainment of your set objectives. You may enjoy partying, for instance, but you don't need a diviner to tell that 'throwing' parties all the time will sap your pocket and make nonsense of any financial plan you develop. With such lifestyle, chances are high that you won't even have a financial plan.

11. Learn About Investment Risk And How To Manage It
When you work so hard to create a future of your dream, the last thing you want is for the value of your investment to be wiped out overnight. Many factors can erode the value of your investments - the future is laden with risks. You'd possibly wonder why then you should take the trouble at all to provide for such uncertain future. The answer is that you are worse off facing those challenges without a solid resource base. It's in the nature of the future and our markets (stock, property, deposits, retail goods, etc) to experience volatility. These swings provide both challenges and opportunities. To be a successful investor, you need to understand market risk, learn hedging techniques and develop a psychology for riding its opportunities.

12. Insurance Is An Important Risk Hedge To Embrace
Insurance remains an unpopular proposition in our society, not withstanding the higher risk exposure and lack of state institutional safety-nets. When you fall ill, you are on your own, as we say. You get accidentally incapacitated, there is no state provision to support you. If you are out of work, you'd probably eat sand unless you have some savings. One could go on, but the bottom line is that the individual is largely unprotected and unsupported by the State. That makes insurance a powerful risk cushion which, unfortunately, our people are yet to appreciate. In the context of a financial plan to take you through thick and thin, insurance should have an important role to play. There are many policy options, but life (protect dependants), disability and assets protection should also interest you.

13. Understand That Success Is Incremental And Cumulative
"Rome was not built in a day" remains a powerful reassurance that what you require is incremental positive action and results. You won't hit your destination overnight and will in fact possibly raise the bar if you were to. You just have to keep advancing, in line with your plan. What is important is to hold yourself to a commitment to continually raise the tally. If you continue to record bits of successes on a consistent basis, you will be surprised at the cumulative effect over a period. If on the other hand you fret and agonise over how to reach your ultimate destination, you will end up with disorientation, inertia and failure. Just stay focused and keep making steady progress.

14. Know And Apply The Power Of Leverage
Leverage refers to the ability to use far more than the resources that are directly available to you. Leverage can be achieved in many ways: you leverage money when, on the strength of what you have, you are able to raise and use much more money, empowering you to accomplish more results. Or when money you invested begins to work for you. You can leverage time which, for instance, happens if you build an online business where purchases could be taking place while you are asleep at night (it's daytime for people in other time zones). You leverage people when your results are delivered by the efforts of other people, best illustrated by a multi-level marketing system, where one's downlines generate free incomes for him while doing their own businesses. Leverage simply accelerates your results and expands your scope, enabling you to meet your goals more quickly and less strenuously.

15. Use Experts When You Have To
Expertise presumes specialisation and excellence, which is why experts are often expensive. Good experts however justify their fees by the results they deliver. If you are scared of paying those fees, remember that you pay them times over by the cost in lost opportunities, damage or remedial action when things get bungled or delivered at mediocre levels by the unskilled. It's not everything you need to engage the most expensive professional for, but whenever faced with a decision, it's better to err on the side of using good quality advice or service. It pays back, one way or another.

16. Your Greatest Asset Is You
Ultimately, you are the most important factor in whatever financial status you can achieve and this must ring clearly in your subconscious. There is the tendency to blame every other person for our unsatisfactory station in life, but that is the mind-set of failure. The man who wants financial success must be prepared to pull himself by his bootstraps. The starting point is to take responsibility for one's life and results. It is important too to choose to act responsibly and live with integrity and dignity. In the long term, these virtues will stand you in good stead. Being your greatest asset and tool, you definitely need to keep sharpening and honing yourself. Self-development will imbue you with internal strength and give you the crushing power to take on each day and its challenges. Your mind is a powerful energy source that will spark or smolder, depending on the ideas you feed it. If you get your mind to dream, believe and focus, the goals you set will get crushed by forces you can't fathom. Ultimately, it starts and ends with you!

If you assimilate, internalise and apply the principles of financial success outlined here, you will be blazing hot and shouldn't be far from your financial dreams. So, take charge of your future and learn the principles that will make you unstoppable on your way to financial independence.

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