Thursday, December 6, 2007
Avoiding Paris-Hiltonitis When Managing Your Money
There’s nothing wrong with a little shine in your life, especially since you have worked hard to get that degree. But shining too hard can have you rolling on 24s to bankruptcy court. Whether you earn 10 dollars per year or 10 Million, you are a financial slave if you are not saving, investing and letting your money grow. As I like to say, “To ‘floss’ at 23 is human, but to floss till you’re 90 is divine”.
As a Finance Professor and your personal Financial Physician, let me give you a list of rules to live by, so that your grandkids will be riding high on the hog after you have cooked up the pork chops. A mind is a terrible thing to waste, and you are wasting your mind if you have not used it to build, invest and teach in your community:
Rule #1: The easiest way to stay poor is to never own anything. Renting an apartment will help your landlord get a house, not you. Buying cars helps the auto dealer get a new limo, not you. The candy apple paint on their new Mercedes is being peeled right off your black butt. Get on the other side of that deal! Buy a house as quick as you can, buy stocks, buy bonds, own ASSETS. Don’t believe the hype about having a high paycheck; It means nothing if you don’t own anything.
Rule #2: The quickest path to getting pimped is to always work for someone else. Don’t just try to find a job, put yourself in position to CREATE a job. Start your own business as soon as you can. Remember: when you are working for someone else, they are usually earning 10 dollars for every dollar they pay you. Now THAT’S pimpin. Get with the GRAND hustle, not the BLAND hustle by using the PLANNED hustle to start your own business.
Rule #3: Save at least 10% of your money every time you get paid, NO EXCUSES. You should pay yourself first by having the money come right out of your check. A person who saves $200 per week starting at the age of 22 and invests that money in the stock market for a 10% return every year will have roughly $43,000 by the time they are 32, $434,000 by the time they are 52, and $1.6 million when they are 65. That’s enough money to help Flava Flav get a new girlfriend.
Rule #4: Create multiple streams of income. Your salary should only be one. I don’t care if you sell comic books, Avon or rotten fish. Remember the words of the rapper TI: “If the grapes don’t sell, I dry em up and sell raisins.” Side hustles provide job security, in case your boss hands you the pink slip. If you are smart, you can hand the pink slip to your boss.
Rule #5: Love is creepy sometimes, so watch who you hook up with. Merging your money with someone is like having sex with them: it can be an amazing experience, or it can leave you burned and bitter. Whether it is marriage or starting a business together, only merge your money with someone who cares about your best interest. In other words, don’t waste your life with losers.
Read my lips and follow these tips, and your future will have so much shine that Stevie Wonder will need to put on his sunglasses. Now that’s pimpin.