To me, personal finance is all about goals. Setting goals, working towards goals and then achieving them. Goals range from the ultra short-term: I'm not going to spend more than $50 in this store, to the ultra long-term: I want to leave x-amount of money to my family when I die.
I find goals helpful as they are a reference point you can always return to if you feel you are straying from the straight and narrow. For instance when you're tempted to buy that 50 inch LCD using credit, or that $1500 suit that would surely find you a hot girl; a quick recheck of your short and long-term goals, and whether that purchase would take you towards or away from their realisation, can stop you making a decision you could regret for years.
My main long-term financial goal is geared towards financial independence - I want to be able to work, or not work, or volunteer, or study, without the pressure of having to earn to pay the bills. I've always said that I want to be financially independent by the time I'm 45. That gives me 20 years. Long enough? Who knows.
Up until now my strategy has been to pick a proportion of my income, currently 20%, and put this into long-term investments which will hopefully accrue enough to reach my goal. This is all based on nothing but conjecture, and somehow I think I need to be more specific and scientific about how much I need to put away.
Over the next few weeks I'll try and analyse my saving, spending and investments and come up with some specific short and long-term goals to put me on track to being financially independent. And maybe at the same time I'll try and work out what independence will mean for me, and when I finally get there will I even be happy...
Any advice or comments would be much appreciated.
I find goals helpful as they are a reference point you can always return to if you feel you are straying from the straight and narrow. For instance when you're tempted to buy that 50 inch LCD using credit, or that $1500 suit that would surely find you a hot girl; a quick recheck of your short and long-term goals, and whether that purchase would take you towards or away from their realisation, can stop you making a decision you could regret for years.
My main long-term financial goal is geared towards financial independence - I want to be able to work, or not work, or volunteer, or study, without the pressure of having to earn to pay the bills. I've always said that I want to be financially independent by the time I'm 45. That gives me 20 years. Long enough? Who knows.
Up until now my strategy has been to pick a proportion of my income, currently 20%, and put this into long-term investments which will hopefully accrue enough to reach my goal. This is all based on nothing but conjecture, and somehow I think I need to be more specific and scientific about how much I need to put away.
Over the next few weeks I'll try and analyse my saving, spending and investments and come up with some specific short and long-term goals to put me on track to being financially independent. And maybe at the same time I'll try and work out what independence will mean for me, and when I finally get there will I even be happy...
Any advice or comments would be much appreciated.
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