Riding as a passenger recently in a rainstorm, I watched as the raindrops beaded up and rolled across the hood of the car. The car I was in is my own, and I have owned it now for 9 years. I love having no payments!!
I reminisced about my first car, a 1976 Buick Century. Two Door with large seats that once held the entire boys Under-12 soccer team I was coaching. It was the only way to get 14 of them and me to the game on time.
My car also required waxing. In case you were born after about 1985, go watch The Karate Kid and see what wax on and wax off is all about. If you didn’t wax your car, then you ran the high probability that the car’s paint would begin to fade, peel and chip.
My 9-year old car has never had wax applied through the human effort of wax on wax off approach. The technology eliminates the need to wax a car.
That is good news for the consumer. No need to buy the wax and rags. No need to spend four hours on a Saturday morning waxing the car. It freed your time and your pocketbook for other opportunities.
While riding in my car, I also took notice of the disrepair of the towns and cities we were passing through and the roads we were driving on. Giving them a school grade of C- was generous.
Many towns and cities will call this deferred maintenance. Actually, it is the impact of poor planning for the future and utilizing tax dollars on “other priorities”.
When an asset is not properly maintained, then it falls into disrepair and eventually fails.
This applies to business and personal finances. We encounter many people that are making $100,000 and over per year and are living paycheck to paycheck. Just like the towns and cities we encountered, they are deferring their future while spending their wages on “other priorities”.
The only formula for success is to have the priorities reordered.
How is your Infrastructure? Primed for success or falling into disrepair.
We recommend the following:
Save 10% of your gross pay annually. Do it with each paycheck.
Start with 5% of your gross pay going into a retirement account and increase that 1% per year until you max out.
Next pay your fixed expenses. Rent/mortgage, utilities, cable, cell phone ……
Accumulate NO CREDIT CARD DEBT – it is a cancer to your financial health.
Then you can spend what is left, or save for a special purchase, trip or occasion.
“Putting your priorities first” will make you face the choice of focusing on your future or your current pleasure.
Which is more important?
Michael Tannery CPA CDFA® AIF® ● CEO
Be A Financial Olympian