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17 Wealth Forming Habits

Intelligence, talent and charm are great, but more often than not these aren’t what separate the wealthiest among us from the poorest.


Instead, the differences are in our daily habits. Do you realize that these subconscious, second-nature activities make up 40% of our waking hours? That means that two out of every five minutes, all day and every day, we operate on autopilot. It’s true: Habits are neural pathways stored in the basal ganglia, a golf ball-size mass of tissue right in the centre of our brains, in the limbic system. 


This neural fast lane saves the brain energy: When a habit is formed and stored in this region, the parts of the brain involved in deeper decision-making cease to participate in the activity. However, we all know there are good habits and bad habits.


I spent years studying the difference between the habits of our country’s rich and poor, questioning hundreds of individuals. On the rich side, these were people with an annual gross income north of $160,000 and net liquid assets of $3.2 million or more. I defined the lesser-off as those with gross income of $35,000 or less and no more than $5,000 in liquid assets. When I was done, I analysed the results of my research and boiled down the responses to create a picture of what allows the wealthy to prosper where others do not. My ensuing book became a sort of instruction manual for how to become wealthy.


The gulf between Rich Habits and Poverty Habits is staggering. If you’re well off already, chances are you already adhere to most of these Rich Habits. Integrating the ones you’ve neglected will push you further. But be assured: If you’re doing fine now without minding these money principles, it’ll catch up to you.


Some of the differences between rich and poor are obvious, while others are a little more surprising. Here are the most important Rich Habits you can take up to reach and maintain your wealth potential.


  1. Live within your means.

Wealthy people avoid overspending by paying their future selves first. They save 20 percent of their net income and live on the remaining 80 percent.

Among those who are struggling financially, almost all are living above their means. They spend more than they earn, and their debt is overwhelming them. If you want to end your financial struggles, you need to make a habit of saving and budgeting what you spend. Here are some sensible ways to budget your monthly net pay:

  • Spend no more than 25 percent on housing, no matter if you own or rent.
  • Spend no more than 15 percent on food.
  • Limit entertainment—bars, movies, miniature golf, whatever—to no more than 10 percent of your spending. Vacations should account for no more than 5 percent of your annual net pay.
  • Spend no more than 5 percent on auto loans, and never lease. Ninety-four percent of the wealthy buy instead of leasing. These folks keep their cars until the wheels fall off, taking great care along the way so that they save money in the long run.
  • Stay away from accumulating credit card debt. If you are doing this, it’s a clear sign that you need to cut back somewhere.
  • Think of savings and investments as two completely different things. You should never lose money on your savings. Try to stash six months of living expenses in an emergency fund in case you lose your job, or your business goes belly-up.
  • Contribute as much as you can afford to a retirement plan. If you work for a company that matches your contributions up to a certain percentage, great. Always take that free money when you can get it.
  1. Don’t gamble.

Every week, 77 percent of those who struggle financially play the lottery. Hardly anyone who is wealthy plays the numbers. Wealthy people do not rely on random good luck for their wealth. They create their own good luck. If you still want to bet after knowing the risk, use money from your entertainment budget.

  1. Read every day.

Reading information that will increase your knowledge about your business or career will make you more valuable to colleagues, customers or clients. Among wealthy people, 88 percent read for 30 minutes or more every day. Just as important, they make good use of their reading time:

  • 63% listen to audiobooks during their commute.
  • 79% read educational career-related material.
  • 55% read for personal development.
  • 58% read biographies of successful people.
  • 94% read current events.
  • 51% read about history.
  • Only 11% read purely for entertainment purposes.

The reason successful people read is to improve themselves. This separates them from the competition. By increasing their knowledge, they are able to see more opportunities, which translate into more money. Comparatively speaking, only one in 50 of those struggling financially engages in this daily self-improvement reading, and as a result, the poor don’t grow professionally and are among the first to be fired or downsized.

  1. Forget the TV and spend less time surfing the internet.

How much of your valuable time do you lose parked in front of a screen? Two-thirds of wealthy people watch less than an hour of TV a day and almost that many—63 percent—spend less than an hour a day on the internet unless it is job-related.

Instead, these successful people use their free time engaged in personal development, networking, volunteering, working side jobs or side businesses, or pursuing some goal that will lead to rewards down the road. But 77 percent of those struggling financially spend an hour or more a day watching TV, and 74 percent spend an hour or more a day using the internet recreationally.

  1. Control your emotions.

Not every thought needs to come out of your mouth. Not every emotion needs to be expressed. When you say whatever is on your mind, you risk hurting others. Loose lips are a habit for 69 percent of those who struggle financially. Conversely, 94 percent of wealthy people filter their emotions. They understand that letting emotions control them can destroy relationships at work and at home. Wait to say what’s on your mind until you’re calm and have had time to look at the situation objectively.

Fear is perhaps the most important negative emotion to control. Any change, even positive changes such as marriage or a promotion, can prompt feelings of fear. Wealthy people have conditioned their minds to overcome these thoughts, while those who struggle financially give in to fear and allow it to hold them back.

Whether you fear change, making mistakes, taking risks or simply failure, conquering these emotions is about leaning in just a little until you build up confidence. It’s amazing how much confidence helps.

  1. Network and volunteer regularly.

You’ll build valuable relationships that can result in more customers or clients, or help you land a better job if you spend time pressing the flesh and giving back in your community. Almost three-quarters of wealthy people network and volunteer a minimum of five hours a month. Among those struggling financially, only one in 10 does this.

One perk of volunteering is the company you’ll keep. Very often the boards and committees of non-profits are made up of wealthy, successful people. Developing personal relationships with these folks will often result in future business relationships.

  1. Go above and beyond in work and business.

Unsuccessful people have “it’s not in my job description” syndrome. Consequently, they are never given more responsibility, and their wages grow very little from year to year—if they keep their jobs at all. Wealthy individuals, on the other hand, make themselves invaluable to their employers or customers, writing articles related to their industry, speaking at industry events and networking. Successful people work hard to achieve the mutual goals of their employers or their businesses.

  1. Set goals, not wishes.

You cannot control the outcome of a wish, but you can control the outcome of a goal.

Every year, 70 percent of the wealthy pursue at least one major goal. Only 3 percent of those struggling to make ends meet do this.

  1. Avoid procrastination.

Successful people understand that procrastination impairs quality; creates dissatisfied employers, customers or clients; and damages other non-business relationships. Here are five strategies that will help you avoid procrastination:

  •  Create daily “to-do” lists. These are your daily goals. You want to complete 70 percent or more of your “to-do” items every day.
  •  Have a “daily five.” These activities represent the crucial things that will help you get closer to realizing some major purpose or goal.
  •  Set and communicate artificial deadlines. There’s nothing wrong with finishing early.
  •  Have accountability partners. These are people you team with to pursue a big goal. Communicate with them at least every week, and make sure they hold your feet to the fire.
  • Say a “do it now” affirmation. This is a self-nagging technique. Repeat the words “do it now” over and over again until you begin a task or project.
  1. Talk less and listen more.

A 5-to-1 ratio is about right: You should listen to others five minutes for every one minute that you speak. Wealthy people are good communicators because they are good listeners. They understand that you can learn and educate yourself only by listening to what other people have to say. The more you learn about your relationships, the more you can help them.

  1. Avoid toxic people.

We are only as successful as the people we spend the most time with. Of wealthy, successful people, 86 percent associate with other successful people. But 96 percent of those struggling financially stick with others struggling financially.

If you want to end your financial struggles, you need to evaluate each of your relationships and determine if they are a Rich Relationship (with someone who can help you up) or a Poverty Relationship (with someone holding you back). Start spending more and more time on your Rich Relationships and less on your Poverty Relationships. Rich Relationships can help you find a better job, refer new business to you or open doors of opportunity.

  1. Don’t give up.

Those who are successful in life have three things in common: focus, persistence, and patience. They simply do not quit chasing their big goals. Those who struggle financially stop short.

  1. Set aside the self-limiting beliefs holding you back.

If you’re hurting financially, you’ve probably told yourself some of these untruths before: “Poor people can’t become rich. Rich people have good luck and poor people have bad luck. I’m not smart. I can’t do anything right. I fail at everything I try.”

Each one of these self-limiting beliefs alters your behaviour in a negative way. Almost four out of five wealthy people attribute their success in life to their beliefs. Change your negative beliefs into positive affirmations by reading lessons from the greats of personal development, like Napoleon Hill, Dale Carnegie and Jim Rohn.

  1. Get a mentor.

Among the wealthy, 93 percent who had a mentor attributed their success to that person. Mentors regularly and actively participate in your growth by teaching you what to do and what not to do. Finding such a teacher is one of the best and least painful ways to become rich.

If you know your goals, find someone who has already achieved them. You’ll be amazed by how many people want to lend a helping hand.

  1. Eliminate “bad luck” from your vocabulary.

Those struggling financially in life have a way of creating bad luck for themselves. It’s a by-product of their habits. Poverty Habits, repeated over and over are like snowflakes on a mountainside. In time, these snowflakes build up until the inevitable avalanche—a preventable medical problem, a lost job, a failed marriage, a broken business relationship or bankruptcy.

Conversely, successful people create their own unique type of good luck. Their positive habits lead to opportunities such as promotions, bonuses, new business and good health.

16. Don’t be a yes-man

Success is about picking out the good investments from the bad – investments of time, effort, attention, and occasionally, money.

17. Know your main purpose.

It’s the last Rich Habit, but it might be the most important. Those people who pursue a dream or a main purpose in life are by far the wealthiest and happiest among us. Because they love what they do for a living, they are happy to devote more hours each day driving toward their purpose.

Odds are, if you are not making sufficient income at your job, it is because you are doing something you do not particularly like. When you can earn a sufficient income doing something you enjoy, you have found your main purpose.


Believe it or not, finding this purpose is easy. Here’s the process:

  1. Make a list of everything you can remember that made you happy.
  2. Highlight those items on your list that involve a skill and identify that skill.
  3. Rank the top 10 highlighted items in the order of joy they bring to you. Whatever makes you happiest of all gets 10 big points.
  4. Now rank the top 10 highlighted items in terms of their income potential. The most lucrative skill of all is worth 10 points.
  5. Total the two ranked columns. The highest score represents a potential main purpose in your life. Presto!

As you can see, the differences between rich and poor are simple—sometimes intuitive—but not insignificant. Aim to take up all 17 of these habits, and you’re almost guaranteed to become better off.

This post was originally published in October 2014 by Tom Corley and has been updated for freshness and accuracy.

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Tax, Life Cover and non-married/co-habiting couples – what you need to know…

Co-habiting couples need to be careful when putting a life protection policy in place; they need guidance from their Financial Broker as they could face unintended tax implications.

According to the last Census in 2016, there were 152,302 Co-habiting couples in Ireland, and rising. In this blog, we take a closer look at a number of factors and risks to be aware of if you are a non-married/co-habiting couple.

Civil Partnership & Certain Rights and Obligations of Cohabitants Act 2010

The Civil Partnership Act defined a qualified Co-Habitant as being “An adult who is in a relationship of cohabitation of 2 years or more (if dependent children are involved) or for 5 years or more in other instances” meaning that either can now legally claim from their deceased cohabitant’s estate.

Let’s take the example of Ann and Tom

A co-habiting couple, Ann and Tom, decide to take out life cover of €300,000 on a joint life basis to cover any losses each may experience if one of them were to die. Tom is currently unemployed, so Ann will be paying the total premium on the policy until such time as he is employed.

What would the inheritance tax situation be if Ann were to die prematurely?

Unfortunately for Tom, as Ann has paid all the premiums, he is deemed to inherit the whole €300,000 from Ann and has to pay inheritance tax on it. Assuming he has not received any other assets under Group Threshold C previously, his tax liability is: €300,000 – €16,250 x 33% = €93,637.50

If Tom was in a position to say he’d paid for half of the premiums out of their joint account, this would help reduce the tax liability by half, as it’d be assumed he’s inherited half of the sum insured. €150,000 – €16,250 x 33% = €44,137.50

Either way, Tom pays Revenue within a certain time frame either the sum of €93,637.50 or €44,137.50

What’s the solution?

The ‘Life of Another’ Arrangement

Under a simple ‘Life of Another’ arrangement, both Tom and Ann take out separate Life Insurance policies on each other, Tom insures Ann and vice versa. This means that each of the policies is owned separately, clearly identifiable and there should be no liability to inheritance tax as they each pay for their own policies.

Tom is unable to pay premiums, he is unemployed? This can be solved by Ann using the Small Gift Tax Exemption by ‘gifting’ the premiums to Tom which Tom will use to pay for the policy he owns. The Small Gift Tax exemption is €3,000 a year from any one person to another, so if the premiums are below €3,000 a year, Tom can claim the premiums were gifts.

Therefore, in the scenario where Ann was to die, Tom receives the proceeds of the policy he owns without any liability to inheritance tax.

The ‘Section 72’ solution

Alternatively, each could take out a separate Section 72 life insurance policy to pay off any inheritance tax liability. Section 72 policies are set up under Section 72 trust, meaning that the proceeds of such policies are exempt from inheritance tax insofar as the proceeds are used to pay inheritance tax. This arrangement may be more important to cover any tax liability for the dwelling house in which the couple are living.

For Tom and Ann, if they buy a house in joint names and one of them dies, the survivor may have a liability to inheritance tax on the value of the house (assuming the house is held as joint tenants).

However, in this case they may be able to avail of the Dwelling House Exemption.

The Dwelling House Exemption provides a complete exemption from inheritance tax on the value of their home, provided certain conditions are met, basically, that it was and continues to be their home but with having no other interest in any other property. So, if either Tom or Ann had previously owned a property before they met and continued to own it when they began co-habiting, they would not be able to avail of the relief and would have a liability to inheritance tax on the property – not an unusual situation for couples.

Tom and Ann’s house is valued at €500,000 and they contribute equally to deposit, mortgage repayment and joint mortgage protection policy. Again, if Ann were to die, Tom inherits the house but because he still owns a property purchased a few years back, he is unable to avail of the Dwelling House Exemption.

The mortgage is cleared by the mortgage protection policy and he inherits Ann’s 50% of the property, so his inheritance tax liability is 50% of property = €250,000 Threshold for Tom = €16,250 Residual taxed = €233,750 x 33% = €77,137.50

Both Tom and Ann could take out a policy on their own life and hold it under Section 72 Trust, with the other being the beneficiary. In the event of either dying, the sum insured is payable to the survivor as beneficiary, who uses the money to pay off any inheritance tax liability.

Tax, Life Cover and non-married/co-habiting couples – what you need to know… Read More »

50 cognitive biases to be aware of so you can be the very best version of you.

Every day, systematic errors in our thought process impact the way we live and work. But in a world where everything we do is changing rapidly—from the way we store information to the way we watch TV—what really classifies as rational thinking? It’s a question with no right or wrong answer, but to help us decide for ourselves, the below infographic from TitleMax lists 50 cognitive biases that we may want to become privy to.

50 cognitive biases to be aware of so you can be the very best version of you. Read More »

The Common Mistakes That Investors Make…

We see some of the same mistakes repeated over and over again by ordinary investors…

Mistake No. 1:

Looking for a ‘magic bullet’
Many investors look for the “best” fund thinking that there must be a handful of funds that can bring the desired return. In fact, each fund focuses on very specific types of investments, such as large company stocks, small company stocks, government bonds, etc. In any given year, any one of these market sectors could do well or poorly. Investors may want to use a mix of different types of funds. This is called asset allocation. Many mistakenly believe that asset allocation is designed to provide greater returns. That’s simply not true. Its goal is to reduce volatility risk. Smoothing things out can make it easier for investors to ride out market turbulence and avoid major portfolio losses.

Mistake No. 2:

Getting out when markets drop
Market declines are inevitable. However, despite all the advice about “staying the course,” many investors sell out of their stock position during market declines, often after the decline has bottomed out. Somehow they believe that they can sit on the sidelines until the markets go back up again and then jump in. The problem is that we become aware of market declines and market surges only after they have happened – when it’s too late to do anything. Following the market decline of 2008, investors sitting on the sidelines from March through December of 2009 missed one of the largest market rallies in history. It’s tough to know when to get out and it’s often tougher to know when to get back in!

Mistake No. 3:

Stopping contributions when markets are dropping
For the long-term investor, there really is no better time to be adding money to investment accounts than when they are down in value. Although we know that past performance can’t guarantee future results, long-term investors have the potential to benefit by continuing to purchase during market declines, reaping rewards later if the values return. This works best when the investor is using mutual funds or other broad collections of securities.

Mistake No. 4:

Confusing the stock market with the economy
The economy is the sum total of all the economic activity in the country: jobs, business profits, debt, consumer spending, and lots of other factors. The stock market represents the perceived value of stocks of individual companies. Companies can make money during recessions. Profits affect the perceived value of a company, and so stocks can rise during recessions. Just because the economy is slow to recover, that doesn’t mean the stock market will be. Investors have to realize that the stock market and the economy are two entirely different things.

Mistake No. 5:

Paying too much attention to the media
The almost constant onslaught of news about the markets and the economy can cause investors to focus on short-term data that really doesn’t have anything to do with their long-term performance. There is always a crisis somewhere that affects the markets, but in the long run, the markets will for the most part reflect business profits of companies. Just make a list of all the worries and predictions made by the talking heads over the course of a week, and then see how many of those issues are talked about six months later – or six days later. Investors need to stay focused on their long-term plan and not be scared out of the market by short-term events.Remember: media exists to sell advertising – sensationalism sells.

Mistake No. 6:

Choosing an investment simply by historical returns
Investors often select mutual funds in a retirement plan or investment account based on how they performed over the past year or several years. There are many reasons why this mistake keeps happening. First, that superior performance may have been due to certain stock selections that just happened to be really profitable, or a particular market condition that no longer exists. That’s now in the past, and is no help for the future. Additionally, the manager who did all that great stock-picking may have left the fund for a better deal somewhere else based on their great performance. So a fund’s track record alone isn’t enough. Investors need to consider what type of stocks the fund invests in, who the managers of the fund are, what the expenses of the fund are, the style of the fund, and what the stipulations of the fund are in the prospectus.

Mistake No. 7:

Not having a goal
Ask any number of investors what rate of return they expect on their investments, and their answers generally sound something like… “I want them to grow as much as possible.” This mistake creates a situation where an investor never knows if they have achieved their goal. Investors can avoid this mistake by knowing what they expect their returns to be over a certain period of time. For example, let’s say that you have decided that you need your money to double in value 12 years from now. To achieve that goal, your account would need to average 6-percent growth per year. This target helps you to decide what to invest in, how to mix up your investments, and lets you know if you are on track. If you know that you are on pace for that rate of return, market declines will be much less worrisome and the urge to “get out” will be easier to avoid.

Mistake No. 8:

Following the herd
When markets have been rising over several years, the urge to “get in” or to put more money into investment accounts can be strong. Conversely, when markets are declining, the urge to pull out or move to cash can be even stronger. These impulses can be made even more intense when it seems that everyone else is doing them and that you might be left out of a market rally or be stuck in a market decline. Long term-investors who want to achieve their goals may want to avoid both.

Mistake No. 9:

Comparing your overall portfolio returns to the stock market
Although it is customary to use the MSCI AC World Index or possible the FTSE All Share Index as a proxy for market returns, it is not a good way to compare portfolio returns. Why? Because most investors should not be entirely invested in the stock market. Just as one would not wish their portfolio to drop as considerably as the stock market when there is a major correction, they should also not expect it to rise as much in times of prosperity. This is the thesis behind asset allocation.

At Chartered Capital Financial Planning Ltd, we believe the best way to achieve your long-term investment goals is to focus on a consistent and objective investment process. It is a process that should seek to avoid large losses, recognise and react to changing market conditions, and seek to provide positive returns through a complete market cycle.

This article contains general information which is not suitable for everyone. The information contained herein should not be construed as personal financial advice. There is no guarantee that the views expressed in this article will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any investment. Copyright© 2021 Chartered Capital Financial Planning Ltd. All Rights Reserved.

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3 Budgeting Resolutions That You Should Implement Right Now

It’s time for the new year, a new budget and a brighter future for you and your family. 2020 has been full of unprecedented events that may have left you feeling financially unstable, but you can make 2021 the year you finally take control of your financial life. Use these resolutions to create a realistic budget that will let you pay down your debts and give you the opportunity to put something away, while not forcing you to be too disciplined in order to make it happen.


Resolution #1: Gather The Facts

Before you do anything else, you need to know how much money is coming in and how much is going out each month. If your income has changed due to COVID, you should take a step back to gather information.

For people who receive a regular income, estimating the amount of money coming in is as simple as calculating your post-tax income. But for anyone whose income varies throughout the year, things can get much more complicated, especially during a pandemic. A relatively safe way to budget with an irregular income is to use the lowest-earning month from the previous year as a baseline for creating a budget. A less secure, but probably more realistic way to budget, would be dividing the last year’s income by 12 and using that number as your monthly budgeting baseline.

Once you determine the amount of money you’ll likely have coming in, you need to know what you are spending on a monthly basis. Track your spending for as many months as possible to create your average monthly expenses. Separate this average monthly expenses into two categories: needs and wants. Needs are bills you have to pay, like housing, food, insurance, basic utilities, minimum loan repayments and transportation. Everything else is a want, like entertainment, eating out and shopping.


Resolution #2: Have a Budget Plan

‘In preparing for battle I have always found that plans are useless, but planning is indispensable.’

Dwight D. Eisenhower

Without a good plan, you won’t meet your financial goals.

There are lots of different ways to set up a budget, but the most important thing is that it works for your situation, and you can stick to it. Try using a spreadsheet, downloading an app or creating a handwritten budget to get started. Based on your tracked spending, you can determine how much you should spend on needs and wants each month. Don’t forget to budget for savings too. For example, you could put 10 percent of your monthly income into your savings account.

During a time of economic uncertainty, you will also want to keep an emergency fund, or a financial cushion, in your budget so that you can be prepared for unexpected events or loss of income.


Resolution 3: Adjust Your Spending Habits

A budget only works if you are willing to change your spending habits.
Our needs and wants can vary each month, so you have to be flexible with your budget. For many people, cutting down on spending is a painful experience. But there are ways to make it a little less uncomfortable.

Control Impulse Purchasing
While you are still at home, make a list of items you will purchase and don’t give in to temptations at the store. If you see something which you really want in the store, write it down to buy on your next visit. It is amazing how many ‘must-buy’ items lose their attractiveness after a few days.

Use a Credit Card, But Pretend It’s Cash
The advice used to be that you should always use cash when you shop, but cashback and other incentives from credit cards makes using them a great deal – if you can avoid interest charges. When possible, avoid spending more money than you have in your “want” budget for the month.

Avoid the “Little Luxuries”
Small expenses can really add up. Limit your visits to the coffee shop and start bringing your lunch to work. It won’t be long before you notice substantially more money in your pocket – without a whole lot of sacrifice.

Remember that budgeting is an ongoing process. You will need to revisit your budget plan from time to time to make sure that you are staying on track. Try out these budgeting resolutions today to get back on track towards your financial goals, especially if you are feeling overwhelmed by the uncertainty of the coronavirus pandemic.

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6 Step Guidebook To Setting Achievable Financial Goals

We won’t sugar coat it — achieving your financial goals isn’t always easy. But if you don’t create a written plan based on your goals, you’re only making it harder on yourself. In fact, one study shows that people who regularly write down their goals earn 9 times as much over their lifetimes as people who don’t, and 80% of people say they don’t have goals. Sixteen percent say they do have goals, but don’t write them down. Less than 4% write down their goals, and fewer than one percent actually review their goals on an ongoing basis. Guess which one percent…?

Step 1: Give Your Goals A “Why”

When it comes to numbers, it can be hard to evoke an emotional response. That’s why it’s important to give your goals a “why” when you can. Placing a reason behind the numbers can be a big motivator in achieving your financial goals. Think about the difference between “I want to pay my student loans off faster” and “I want to pay off my student loans faster so my wife and I can buy a house and start our family.” Remembering why you’re passing up on those concert tickets this month can help make your sacrifices a little easier to make.

Step 2: Make Your Goals Measurable

Ambiguity won’t be your friend as you work to set financial goals. Focus on being as specific as possible instead, your goals should have a measurable and definitive finish line. This will help you track your progress and feel a sense of accomplishment once you achieve your goals. For example, if you have a goal to save money for a down payment on a new car, choose a number. While you may not know exactly what car you want or how much it’ll cost yet, put an estimate to your goal. Instead of saying “I want to save some money and buy a new car next year,” try “I will put €250 in a separate savings account for the next 12 months that will be used as a down payment for a new car.” This provides a clear, definitive goal that you can track month after month.

Step 3: Be Reasonable

You can follow every step in this guide, but if your goal simply isn’t reasonable — you likely won’t attain it. As you look to set a goal, you must evaluate your current financial standings in comparison with your desired financial picture. If you’d like to accumulate a certain amount of wealth by the end of your 40’s, you need to figure out how it can be done. If your current saving and spending habits support this goal, then you’re likely on the right track. But if you’re often spending more than you’re saving, then you may need to either adjust your goal or adjust your current spending habits.

Step 4: Set A Budget

While we mentioned it in step three, evaluating your spending habits is a tip worth repeating. If your spending habits don’t support your goals, you’re likely fighting a losing battle. Create a monthly budget that supports your future financial goals and current needs. A popular budget breakdown is 50/30/20:

  • 50 percent on needs (groceries, rent/mortgage, utilities)
  • 30 percent on wants (shopping, eating out)
  • 20 percent on savings and debt repayment

For example, if your income after tax each month is €4,000, you’d spend €2,000 on necessities like your car payment, electric bill and rent or mortgage, €1,200 on date nights, clothes shopping and weekend trips and €800 would go toward your student loans and savings account. While everyone’s financial circumstances and current needs differ, this ratio can be a great place to start as you look to draft a budget.

Step 5: Balance Short-Term Needs And Long-Term Goals

Money is nothing more than a tool. The reason you set financial goals in the first place isn’t to simply accumulate more money, it’s to accomplish something that’s pertinent to you and your happiness. And while your future happiness is important, it’s crucial to strike a balance between your long-term goals and your needs or wants for today. You shouldn’t be passing on all trips, holidays, home renovations, car buys or celebrations now because you’re saving for retirement 30 years down the line. Yes, your retirement savings is important. But you need to remember to enjoy what you have today as well. And, of course, the same goes for the other way around. Spending all your wealth today could leave you in a tough spot later down the line.

Step 6: Higher Income Doesn’t Equal Success

Are you ever surprised when you hear of celebrities declaring bankruptcy or pro-athletes having to sell their house? It makes sense to think that a higher income level means more wealth and financial success. But whether you make €40,000 or €400,000 a year, it often doesn’t matter how much your income is. Your wealth and the success of your financial goals is dependent, rather, on what you do with it instead. If you make €400,000 a year but spend €500,000 on frivolous expenses, you’re not building wealth or finding financial success. But if you’re making €40,000 and putting a sizeable portion away in savings each year, your wealth is building over time. As you look to set financial goals, remember that it’s not always about how much you have, it’s about what you do it with it that determines your success.

If you have a financial milestone you’d like to start preparing for, it’s important to begin with a plan. Evaluate your current needs and spending habits to develop a realistic goal and plan of action based on your unique financial picture.

6 Step Guidebook To Setting Achievable Financial Goals Read More »

50 Years Of Excuses “Why Not To Invest”

The MSCI World index increased by over 8486% between 1970 and 2020, despite the constant flow of ‘bad news’. While past performance isn’t a guide to future returns, the best companies in the world have historically delivered positive returns for investors, particularly over the longer term.

2001 – 9/11 (WORLD TRADE CENTRE)

1995 – S&P500 ALL-TIME HIGH
1990 – GULF WAR


The content of this article is for information purposes only and does not constitute a personal recommendation. You should always speak to a financial adviser that is regulated by the Central Bank of Ireland when considering financial advice. Any recommendation made will be based on a full suitability assessment that will include a comprehensive review of your circumstances, needs and objectives.Past Performance Is Not A Guide To Future Returns.

50 Years Of Excuses “Why Not To Invest” Read More »

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