A lot of people say they’re good with money.
They say they have a gift for making it.
That they love money and that money loves them.
This may be true.
But just because you like money and enjoy making it (that’s most of us) doesn’t mean you’re good with money.
Those are two very different things.
What does it take to be good with money?
Restraint for one.
Self-knowledge is important, too.
Understanding how money works also goes hand in hand with being an expert at it.
So do you want to know if you’re really good with money?
Well, see how many of the following boxes you tick:
1. You don’t listen to barbecue advice
If I had a dollar every time someone recommended that I check this new business idea or investment scheme when I was at a barbecue , I would be a very rich man indeed.
If you’re good with money — truly good with money — then you’re not easily swayed by the advice of people, who may be very nice and well-meaning, but are not experts at investments.
People who know money only listen to experts.
The barbecue, after all, is for footy and fishing talk.
2. You know the difference between good debt and bad debt
Some people think they’re good with money because they look expensive.
They wear the right clothes and drive an expensive car.
But getting a loan or a credit card to do these things doesn’t make you rich.
It makes you foolish.
Bad debt is a credit card debt or a loan against a depreciating asset.
Better to owe $150,000 on a house (presuming you have the means to pay it off) that is appreciating than to have a $5,000 credit card debt with an 18 per cent interest rate.
3. You know how much super you have
And not only that, you know how your super fund performs each year.
You know the name of the fund, where that money is invested, and how other super funds are performing.
If you have a self-managed super fund you take an even more active role in tracking the performance of your investments.
You know how much you pay in fees and how various stocks are performing.
You may not work in finance, but you take an active interest in your retirement and money because you understand how important it is.
4. You know your credit score
There are no excuses these days for not knowing your credit score.
It’s very easy, too, to find out what yours is.
Anytime you apply for credit, the lender will look at your score to decide your credit rating.
It’s a vital piece of information so apply to find out now if you haven’t done so already.
5. You understand your expenses… in detail
I am assuming that most people know whether or not they have car insurance, but can you tell me who it is with and how much it costs a month?
A surprising number of people can’t.
Can you also tell me your mortgage interest rate off the top of your head?
Do you know how much your home and contents insurance costs and who is the insurer?
What about other forms of insurance?
Do you have death and permanent disability insurance through your super fund?
If not, why not?
6. You don’t worry about not having enough
This final point is the real clincher because being good with money is about not worrying about being good with money.
The ultimate sign that you are good with finances is the fact you don’t stress about them.
You don’t stress because you don’t need to.
You know exactly what you’re doing and you understand your finances fully.
Hopefully, I’ve given you some food for thought.
The truth is all of us could be better with money.
No matter how accomplished we become, we always have room for improvement.
There’s no time like the present to start is there?
GET THE RIGHT ADVICE…
If you’d like to know more – why not have a strategic discussion with me about your individual needs and let Ken Raiss formulate a Strategic Wealth Plan for you, your family or your business.
Just click here and find out more about Metropole Wealth Advisory’s range of services and book a time for your strategic consultation.
Just click here and leave your details and we’ll be in contact to explain more.
We offer you guidance and support that contribute to seamlessly combining the essential financial areas of your life.
Whether you are a business owner, a professional or a high-income earner we provide you with an individually tailored solution integrating the core disciplines of taxation, superannuation and property investment interwoven with finance, asset protection, succession and estate planning, personal risk insurances and philanthropy.
Please click here to organise a time for a chat. Or call us on 1300 20 30 30.
This article is general information only and is intended as educational material. Metropole Wealth Advisory nor its associated or related entitles, directors, officers or employees intend this material to be advice either actual or implied. You should not act on any of the above without first seeking specific advice taking into account your circumstances and objectives.
Subscribe & don’t miss a single episode of Michael Yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to Michael Yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.