A recent report by consumer-finance champion, This is Money, has compiled the ‘Ten Money Rules for a Richer Life’ – looking at important money factors such as budgeting, saving, investment and paying off debts.
Whilst everyone might have a different definition of what consists of a richer life, if we are looking at financial freedom and having disposable income, these rules below offer some sound advice for financial fulfilment. Below are the ‘Ten Rules for a Richer Life’ and we speak to some financial experts to hear their thoughts and opinions on this…
Ten Rules for a Richer Life
Understanding the Risk of Investments
“With reference to points 2,3 and 10, it is important to invest and let your money work for you – but also understand the levels of risk,” explains Justine Gray, the founder of consumer money site, Dollar Hand.
“A good diversified portfolio might look at low, medium and high risk investments, with low risk being the ISAs and premium bonds, with medium being a property since it could go up, down or have low growth.”
“At the higher end of the risk spectrum are things like trading in stocks, shares or cryptocurrencies which are high-risk, high return and very subject to volatility. To acquire wealth, you should be open to such risks in a controlled environment, such as knowing who you are investing with (point 5) and to be able to continue living healthily if it doesn’t go to plan (point 10).”
Owning Over Renting
“Drawing on number 3, which is to invest over the long-term, you surely have to look at owning a property over renting one,” explains Dan Kettle, founder of finance startup, Pheabs.
“If you look at the property market over the last 10, 20 or 30 years, investing in this asset should only increase in price over the years, especially if you can get in early with an up and coming area.”
“Having a property comes with monthly fees and maintenance, but it can also give you more financial options, including the option to borrow money through remortgaging and second mortgages.”
What’s cooler than throwing money away at a nightclub? Credit.
“This is in fact a lyric from a JayZ song,” explains Elizabeth Cook, founder of funding platform, Funding Zest.
“But he’s not wrong. Looking at number 9, which is your power to earn, makes you richer.”
“When you get older, you quickly realise that everything around you is borrowed, including your home, your car or even your holidays paid for on credit card.”
“So whilst it is always great to have savings, investments and money in the bank account, if you are looking at living a rich life which allows you to afford a nice car, house or regular holidays, having a good credit score and good credit limit will allow you to do those things.”
“Always monitor and keep your credit score strong, have a low debt to loan ratio – so if you have lots of loans open, try to pay them off rather than getting new loans. Maintain a stable income and keep your job for several years and whether you need to access funds through loans, mortgages or credit cards, you could be able to borrow 5, 10 or 20 times your salary.”