I got this idea from Danny Forest Blog post; 8 Timeless Skills to Learn Now in Under 8 Hours to Change your Life Forever!
It’s an amazing 17 minute read if your interested but he talked about life advice and skills. I got a rush of creativity and passion (for lack of a better word). I want to do the same, but instead of life skills, I want to do Financial skills because were a finance Blog. I’ll try and get my suggestions into some kind of order but I think there all really helpful.
So with all that being said let’s get started.
- Assets — how to invest into them.
Savings — 1
The average person have less that £1,000 saved up. Learning how to save gives you freedom. Even, in the beginning you don’t know what your saving for.
If your 11 (or a young person listening (or reading this), when you turn 17/18/19 (depending on when you do your driving test etc) You’ll use that money on a working car. Even, in the beginning it’s £10 a month. Even your 20 year old self will (or could) use that for a future holiday. (This isn’t advice on what you should do with the money you saved, look at my other blog posts for that, I’m just giving you a reason to save)
Your first house might take a chunk of it. The possibilities are endless. Why not allow that money to make you money?
Saving is skill which doesn’t need that long to do but needs to be consistent.
This allows me to run right on into 2nd place.
A Budget — 2
Ever feel you don’t have control of your money? I used to have money flow in and out of my account and, at the end of every month I had nothing (maybe a couple pounds but nothing like I’m saving/investing now).
Learning how to budget. Learning how to control your money. Doesn’t just bring freedom but an ease. You make £500 — £1000 a month and just seeing that disappear is crazy.
A budget helps you understand where your money is going and where it’s gone and helps you to get your priorities straight. There’s no point in you getting those £100 when you needed £50 of that for your water bill.
Assets — 3
The reason the rich get richer and the poor, poorer.
Think of your favorite rapper (or singer). There asset is their music. I remember hearing, this is from a family friend, so not the best source for this, Maria Cary was getting $1M a year for one of her christmas songs.
She put so much effort into making that song… For a couple months… Now? She no longer has to work for the money that, that song brings in. We will play devil’s advocate here and say she gets 500,000. That still 500,000.
I got a playlist I go back to a lot. I can’t tell you how many times I have played those songs. I might take a break every now and then but then I alway come back. I can’t tell you how much money I alone have probably brought those people with adsense and monetisation and books I bought from my favourite artist because I listen to their songs a lot. I am currently listen to a song I’ve heard about 10 times.
Same thing with Actors (who get royalties into their contract). I remember the FRIENDS cast still get something like £1M a year from the show. Again, I heard that on the radio so probably not the best source but there still getting paid for something they did… many years ago.
Well that’s great for actors and artist but how do I do it?
That’s why it’s on the skills list. Once you understand passive income and how assets work and you decide to start purchasing them… Your on your way to the rich list.
I would suggest to start looking into the stock market, ISA accounts and all the rest of the stuff on I share on my Blog and other Financial bloggers share. This is just about the skill and not about teaching it.
Learn what an asset is. Learn an asset from liability. The world (of financial bloggers/ the money world in general) Don’t like liabilities at all. I think they can be alright but make sure you invest into assets first. This alone is a huge and important skill.
Investing — 4
Saving is fine but if you want higher returns than a bank or emergency fund can give you you’ll need the skill of investing. There are many forms of it. Too many to master. But choosing one and becoming half decent with it.
This could be investing in a side business, writing, anything that will result in you making more money after spending it.
FIRE — 5
— Financial Independence Retire Early —
If you listen/read or know about Inv3st you know we talk about financial independence a lot. We have never specifically talked about F.I.R.E but it is a dope concept. Yes it has it’s downfalls and uphills but don’t fall into the trap money and buying the newest thing. You want to be able to live the life you want to start learning this skill. We have touched on it with Assets above but go a little deeper here.
If you wish to travel full-time. Start getting some of your income online.
If you wish to travel part time. Get a job that allows that.
If you want more time at home. start trying to earn passive income.
I could go on but learning that money is a tool and not a boss is the main message (or the main message I get) from FIRE.
You don’t have to go all out but learning what you need vs what you want is a skill. I’ll leave you with a couple questions before moving on.
Do you need to drive to work on sunny days? Are you close enough to work/cycle? Could you get a bus instead of an uber? Could you work out at home for a couple months rather than a gym? Keep asking these questions to yourself. Try giving honest answers.
I know with covid food prices are high but spending £300 might be a little excessive for just a week or 2 of food.
Expenses — 6
What are your expenses? This might not seem like a skill. I would consider it more ‘will power’ but a skill none the less (Okay I struggled with the list a little… leave me alone).
Saying no to things you don’t need. As I talked about in my July update. It is a difficult ‘skill’ to have.
Getting rid of things that don’t bring value and spending your money on things that do.
I would suggest everybody look at this skill, even if you don’t decide to take any of it on. It will allow you to take a second look at the things your buying.
‘Do I need or truly want this? Will it end up in the bin or in the attic? Is it worth x amount of money.
Diversification — 7
Great! You know how to save you know how to invest. These are great skills. Where is your money now?
Is it all in tesla? The stock market? A business? Your business?
Learn to invest in more things. I decided, this month, that I was going to start investing in start ups. Only ‘fun’ money and £10–£20. (I am not suggesting you do this. It takes a long time. You have to know that you might, and usually do, lose it all.)
My point with that story is I am learning to diversify and it’s important skill to have.
Having more than 1 income, or investing in more than 1 thing is a skill. You have to know how to allocate time etc to it.
Retire — 8
People, especially around my age, think retirement is just going to happen one day. I know I thought like that as a 16 year old.
‘Ahh, later me can deal with that.’
I can’t tell you how many times I used to say that when making a stupid decisions… The memories…😆
That’s okay but when is it you want to retire? Never, because your heading in the right direction.
The world pushes this retirement on you. Work till your 60 (I think its 65 now?) and retire and then enjoy life. It’s hard to get people out of that mindset. If you do have that mindset. Than this will be for you but if your like me and never plan on it than this step might bring you less value. Retirement alone is it’s own blog post. I’ll teach you about retiring another time but Retiring isn’t this thing that happens by itself. It’s a skill.
You need to know that you have enough money (and assets if you’ve learnt anything from 1–7). How long can you retire for (this means doing numbers and math…).
It’s not clear cut. It’s a skill and if you wish to retire, learning that skill as soon as you can only helps you and will tell/show you how much longer you have to work.