Eric Tyson is a best-selling personal finance book author and has penned five national best-sellers. He is also the only author to have four of his books simultaneously on Business Week’s business book bestseller list.
His Personal Finance for Dummies, a Wall Street Journal best-seller, won the Benjamin Franklin Award for Best Business Book of the Year. Eric’s syndicated newspaper column is read by millions of readers weekly. He is a former columnist and award-winning journalist for the Sunday San Francisco Chronicle.
“Make your personal and financial plan and stick to it.” – Eric Tyson
1. Improve Your Means and Reduce Your Spending
The first step to achieving financial success over the long term is to improve your means (a.k.a. your take home income) while simultaneously reducing your spending.
But here’s the thing.
You don’t need to cut out every pleasurable vice from your life for the next 50 years in order to effectively manage your money.
But you must choose what things you want to spend money on and what you don’t.
For example, maybe you are a caffeine addict and love your $4 lattes every morning.
Great! Keep them.
But where you can you cut back $120 a month from other expenses?
Maybe you need to move into a smaller apartment, go out less, or just cut the Netflix subscription that you don’t use anymore.
Whatever the case maybe, figure out what you are unwilling to compromise on and then cut costs everywhere else.
This will allow you to properly balance living life today while maximizing your options for the future.
2 . Understand the Three Best Investments
If you want to get wealthy, then you must develop a voracious appetite for learning about the three, time-tested investments on the modern market.
Real estate, stocks, and small businesses.
It’s that simple.
If you can learn how to master these three assets, you will be able to grow your wealth at a phenomenal rate and keep yourself protected from any economic downturn.
These three things are the foundation upon which your financial future lies.
Learn them now and reap the rewards later.
Stocks, real estate, small businesses
3. Be Realistic About Returns
One of the biggest mistakes that many novice investors make is believing their own hype and thinking that all of their investments are going to have explosive returns.
Realistically, if you learn how to invest properly and play the long game, you can expect about 9% per year, on average, across your investments.
While this might not seem like much, when it is given time to accumulate over the years and decades and the power of compound interest is added into the equation, even the smallest investments can result in multi-million dollar sums.
4. Think Long Term
If you are reading this right now and are under the age of 30, then odds are good that you are going to live well into your 100’s.
That’s just the direction that science is taking us.
So why are you living your financial life like you are going to die tomorrow?
You need to think long term.
The smarter you can be with your money and your investing habits now, the less work you will have to do and the more free time you will have as you age.
Take advantage of your youth and energy to build a long-term financial future for yourself.
When you are 50 years old and have the freedom and the leisure to live life at your pace instead of slaving away at a job that you hate, you will thank me.
5. Diversify Properly
One of the keys to sustained success in the investing game is proper diversification.
If all of your eggs are in one basket and the economy takes a turn for the worse, then your entire portfolio is doomed.
However, if you properly diversify, even the work recession will not level your accounts.
You will be able to prosper during any economic time adn continue to grow your wealth regardless of the economic climate.
Good to Great by Jim Collins
Built to Last by Jim Collins
A Random Walk Down Wall Street by Burton Malkiel