15 Top Principles of Money Most People Get Wrong

Are your finances where you want them to be?

If not, there’s a very good chance that one of these 15, or maybe several of them are the underlying root cause.

I’ve seen the finances of thousands of people and these are the principles that I find people most commonly get wrong, that have a major effect on their lives.

In my latest video and podcast episode you’ll learn about these 15 principles in much more detail.

And when you follow them, you’ll create a life where you are in the driver’s seat when it comes to your finances.

THE TOP 15 PRINCIPLES

1.   Everybody needs a Financial Plan. A Financial Plan is a life plan.

a.   Real freedom is financial freedom.

b.   You can’t separate your money from your life.

c.   FIRE – You can be financially independent or retire early with a Plan.

2.   Understand your values: What’s important about money to you?

3.   Risk tolerance is a learned skill. Ability to do nothing when your investments are down.

4.   Stocks are more reliable than bonds or fixed income long-term.

5.   Dividend investors usually pay more tax.

6.   Self-made dividends beat ordinary dividends in every way.

7.   Investing in your own country is not safer.

8.   Focus on the maximum reliable long-term total return, not reasonable returns with less risk.

9.   Nobody can retire comfortably with a balanced portfolio.

10.   You need investment growth after you retire to retire comfortably.

11.   Real estate needs a large mortgage to be a good investment.

a.   Ed’s Rule of Thumb: Sell rental properties when the mortgage is half the property value to invest in equities for higher return, less tax & no work.

12.   Borrowing to invest is the secret to building major wealth.

13.   The big risk to your retirement is inflation – not a stock market crash.

14.   Growth mindset is how to make smart decisions, not a fear-based mindset.

a.   Magic of compounding.

15.   Optimism is realism.