Nine Guiding Financial Principles

The book Financial Jiu-Jitsu: A Fighter's Guide to Conquering Your Finances lists nine core principles to financial success as follows:

• Give back -- Help others and you will always receive more than you give.
• Pay yourself first -- Build for tomorrow by taking action today.
• Automate -- Don't think, don't decide -- automate!
• Maintain a cash safety net -- Even if a rainy day never comes, you'll be ready.
• Manage credit wisely -- Make credit a useful too instead of a necessary (and expensive) evil.
• Get time on your side -- Time is the greatest tool at your disposal: it works for you even when you're sleeping.
• Never procrastinate -- The pain of discipline weighs ounces; the pain of regret weighs a ton.
• Make reality your perception -- You don't have to know everything; you just need to know -- and trust -- the right people.
• Follow a simple and comprehensive strategy -- Building wealth isn't hard, but it will mean sticking to a smart plan.

It's hard to argue with these. When compared to my lists of financial principles, this list is strikingly similar. Guess it's because the steps to becoming wealthy are pretty basic and well-known.

Here's my take on the nine points above:

• Give back -- I think you know what I think about this topic. :-)
• Pay yourself first -- I actually pay myself second, but I agree with their overall point.
• Automate -- I've done this for years. Paycheck is automatically deposited in my checking account. Most of it then goes to Vanguard and is automatically invested. Another portion is automatically sent to my 401k and invested automatically.
• Maintain a cash safety net -- Gotta have an emergency fund.  
• Manage credit wisely -- Being too deep in debt is #3 on my list of worst money moves you can make. If you're in debt, here's how to get out.
• Get time on your side -- Using the power of time is the best way to maximize the value of your investments.  
• Never procrastinate -- Discipline leads to wealth. Unfortunately, it's missing in many financial plans.  
• Make reality your perception -- I have a few people I trust in managing my finances -- namely my CPA (taxes), my lawyer (will), and my insurance agent (disability insurance.) I manage all other aspects of my finances myself.
• Follow a simple and comprehensive strategy -- A simple plan and time is all you need to become wealthy.

Anything to add?

Comments

[David]

Assuming debts have been dealt with, automating and paying yourself first have to be a couple of the most powerful tools on the average person's side. Socking money away at regular automatic intervals just seems to add up so quickly.

[Old Limey]

I thoroughly agree with Principles 2 through 9 and have followed them my whole life and they have worked well for me..

As for Principle #1, we have helped each of our three children and two grandchildren (i.e. ourselves) at various times but our outside giving is very sparse and limited to only a few non profit organizations that, in our estimation, provide a valuable service that we either use or believe in. Here's a little controversy for you.

There is a well known quotation that goes "God helps those that help themselves" but it is nowhere to be found in the Bible, it appeared in Poor Richard's Almanac in 1757 and is sometimes attributed to Benjamin Franklin.

[FMF]

Old Limey --

Are you poking me with a stick? ;-)

You are correct in noting that that saying is not found in the Bible (though many think it is.) The Bible's philosophy is more closely related to "God helps those who help others", though that direct quote is not used. However, many verses, including Proverbs 19:17, advocate this sentiment.

[Squirrelers]

I agree with all these principles, and find it tough to argue with these.

As for principle #1....yes, I agree with that one too. Old Limey, I'm nobody to argue with what's worked for you, so I won't:) For me, I think #1 is a great part of the plan, though I do admit that I'll definitely focus on my family first in time of need. There are priorities. That said, giving is good....kind of the counterbalance to the line from the original Wall Street movie that proclaimed "Greed is Good".

For the rest of the principles, the idea of procrastination is a tough one for many, but so important. Ties well with #6.

[Georgia]

My husband always said that if you are able to donate or give to others, you are not poor. By that sentiment, we never were. Most years we gave the full 10% and now I'm trying for 20%. God loves a cheerful giver and I'm a positive thinker in that regard.