10 money com­mand­ments

Auckland City Harbour News - - OPINION -

What is the great­est money ad­vice ‘‘one-liner’’ ever?

I am con­tin­u­ally run­ning across gold nuggets of ad­vice which I ad­mire, and I de­cided to go in search of the sin­gle one that trumps the rest.

In my ad­mit­tedly arm-chairish search, con­ducted hap­pily on­line while sip­ping tea, I came across 10 which I de­cided cap­tured so much wis­dom that I now think of as ‘‘The Ten Com­mand­ments’’ of money. Th­ese are they. The gloss in brack­ets how­ever, is mine, as is the un­con­vinc­ing ‘‘faux’’ King James Bi­ble-speak: 1. Al­ways, al­ways spend less than thou earnest. 2. Never taketh on debt for things that de­pre­ci­ate in value. (Oth­er­wise known as ‘‘If you need to use the plas­tic, you can’t af­ford it’’.) 3. A dol­lar saved is a dol­lar earned. (And a dol­lar set aside is avail­able to spend if your in­come tem­po­rar­ily dries up.) 4. Never invest in some­thing thou dost not un­der­stand. 5. Re­mem­ber, a man does not de­serve things he can’t af­ford, just be­cause he works hard. 6. Change thy ways grad­u­ally. The wise per­son changeth one habit at a time. 7. Lock up thy purse. Few can earn as fast as they can spend. (And a year of pru­dence lost can take another year to make up for.) 8. Never re­pay any debt at the min­i­mum rate. (Min­i­mum re­pay­ments are for mugs and the des­per­ate. Be it credit card, mort­gage or per­sonal loan debt, the min­i­mum re­pay­ment lev­els are de­signed by the lender to ex­tract the max­i­mum ben­e­fit for them.) 9. Don’t drive, if you can bike. Don’t bike, if you can walk. (Trans­port chews through the money. Ditch­ing a car can be the equiv­a­lent of a very big pay-rise. No price can be put on stay­ing slim and fit.) 10. Do not covet thy neigh­bour’s car/house/ass. (Do not wor­ship the sta­tus sym­bol – the car, the house, the glasses, the fash­ion. Much of it is trash and isn’t worth the money spent on it. While you are wor­ship­ing, your fu­ture is be­ing im­pov­er­ished.)

Each pithy lit­tle nugget of wis­dom is a chal­lenge to each one of us, a call to reign in that ex­ces­sive sushi habit, or that ‘‘fash­ion’’ ad­dic­tion that has once again reared its dirty lit­tle head.

But for me, after nearly two decades of money writ­ing, the ad­vice I would give to peo­ple is this: It’s what you don’t know that in­evitably turns out to be the thing that costs you.

Un­for­tu­nately, that’s a very broad state­ment. The thing you don’t know about could be the power of com­pound in­ter­est that helps you build a nest-egg able to give you a de­cent re­tire­ment. Or that the slick sales­man who just en­cour­aged you to invest your money in some over­seas ven­ture is ac­tu­ally just a con­man.

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