It has been a while since I have sat through a too long meeting and was inspired just to write about personal finances…but it happened the other day. Someone brought up a show that will likely fall into oblivion at some point called, “The Bear.” In it the main character is running (or trying to run) a restaurant and comes up with a list of non-negotiables, and that got me to thinking about what are some of my personal finance non-negotiables. I don’t think post will ever be “complete” but rather I will add as more ideas come up:
- Shit Happens and Cash is often the Solution. Life happens, and most of the time the only solution is cash. Figure out your number that you want liquid, and keep it liquid for emergencies.
- Create Multiple Streams of Income. Multiple Streams of Income is the best security one can have. Whether you are retired or working towards retirement not depending on one stream of income leaves you with optionality. Of course, this comes with a less focused approach. The tradeoff may not work for all.
- Be careful when using Leverage. Leverage leaves you vunerable. For most individuals leverage is needed. Whether it is to buy a house or build a business debt is often used, but no matter the amount it forces you to be beholden to a creditor. Even if you have enough assets to cover the debt (and most people do not) you would likely still need to sell something to pay it off.
- Consumer Debt Needs to be taken Seriously. You can’t get too far ahead in the game of life if you are saddled with shitty debt…this is especially true if you are using a high interest credit card.
- Automatic Savings will Lower your Consumption. Automatic transfers/contributions would help almost every American. If you don’t see it in your account, it isn’t yours. Your lifestyle adapts to the net amount that lands in your account, not the gross amount paid.
Despite coming up with these on the fly, I am not practicing what I preach perfectly, and that is pretty depressing/angering. In the next few months I am going to make some major changes to get in line with my non-negotiables.