What I have learned about money over the last 30 years - Limerick financial planner

ONE of my favourite podcasts comes from BBC radio 4’s Desert Island Discs where celebrities reveal what eight songs and one book and one luxury item they would take with them if they were marooned on a deserted island.
And recently the podcast is releasing snippets or what they call postcards from people who were on the show, where they play three or four minutes of an interview with someone who will speak about a particular aspect of their life.
For example, you can listen to Tom Hanks talk about loneliness for three minutes and 43 seconds or Davina McCall talk for three minutes 53 seconds about addiction or Adele talking for two minutes 19 second about her first record deal.
And it’s all very interesting and the premise behind it is that these people are sending a postcard from their deserted island giving advice about a particular topic they encountered during their life.

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So, I thought this week I’d send you some postcards about money.
And some of what I’m going to tell you is coming from me and others from people I’ve encountered over the past 30 years and what they’ve said have stayed with me.
And they or I may never be famous enough to be asked on Desert Island Discs but boy do I think we should take notice of what some people have said because I think it’s sage advice.
So, here goes and some postcards or you could equally call them messages in a bottle, have more text than others and the area they refer to will vary but some will overlap as well.
- It’s not how much money you make, it’s how much you keep. Having a big salary doesn’t make you rich and having a low one doesn’t make you poor either. All that matters is how much you can save from it.
-Look at what you’re spending your money on each month to get a clearer picture of your priorities. Because the goal is to spend money on things that are important to you and cut back on everything else.
-Start saving as early as possible. If you do, you’ll be able to retire earlier and it will give you more options to choose what you do and how often you do it. And you get to work on your terms and at your pace.
-It’s okay to drive an older car.
-Avoid credit card debt like the plague. And don't use your credit card to buy anything that you don’t have cash in your account to pay for.
-Take advantage of employer pension contributions. It’s only when they aren’t there anymore do you realise how great they were.
-Success doesn't come easy to people, it's hard work. We only hear about success stories but behind most is bloody hard work. And if you want a flat stomach no one is going to do the tummy crunches for you. The same applies to your finances, no one can save money on your behalf, you have to do it, and is it hard work? Yes, but can you do it, Yes, and is it worth it absolutely Yes.
-Time is more valuable than money so don’t waste it. You can get back money but you can’t get back time.
-Have a rainy day fund – it’s going to rain.
-Never take a job just because of the money. Consider it for sure but don’t let it be your determining factor.
-One extra mortgage payment every year can shorten the term by years and will save you thousands in interest payments but start making that extra payment soon into your mortgage.
-Relax the purse strings and make sure you leave room for guilt free spending.
-Reach out for help when you need it.
-A little bit of inflation can do serious damage to the value of your savings so one of the important things about investing money before or after retiring is that you are earning more than inflation is consuming, and your worst-case scenario is that they are least the same.
-There is no point in having a plan or goals if you do nothing about them – you’ve got to take action.
-Your health is your wealth. So, protect it and make sure if anything did happen you have adequate insurance in place.
-There is an old investment saying which is, buy in the gloom and sell in the boom.
-Write a will because if you don’t it can be disastrous for those you leave behind.
-Live on less than you make and invest the difference and invest as much money as you can as early as you can.
-Your financial situation may be uncertain but not knowing whether it is or not is actually worse than knowing there isn’t enough savings in place. Because having that knowledge of what the future could behold could be the motivation to spur you into action to correct the future.
-The more expensive your lifestyle is, the longer you’re going to have to work for.
-Don’t be financially dependent on anyone, ever.
-Never rely on inheritances or bonuses or tax refunds when figuring out what future monies you’ll have available. It may never materialise, or it might be a lot smaller than you had thought. They are the icing on the cake, not the batter mix, your saving rate is the batter mix.
-Don’t increase your spending just because you got a raise.
-It’s much more important to start than to be smart.
-Set small goals along the way towards reaching the bigger ones and push as quickly as you can to reach them.
-Don’t just have one source of income, have multiple sources.
-Nothing comes from nothing and you cannot have financial freedom unless you make the effort yourself.
-Even though you might believe you are in a very stable job, don’t take it for granted either because a business failure, or a product comes off patent, or a company decides to re-locate could throw you into unemployment so keep your network up to date, keep your skills current and add to them, and always have a Plan B in place just in case.
-I’m pretty sure that all the money left in your account will not be accepted as legal tender in your next life.
-Every €1 you invest today is worth hours if not days in the future. Because the more you save today the more time it buys you in the future.
-Investing works for you and debt works against you.
-Don’t take financial advice from amateurs. And I know a lot of so-called financial experts who haven’t two bob to rub together.
And if you think dealing with a good professional is expensive, just wait until you see what happens when you take advice from an amateur.
-It’s when markets are down in value that you’ll most likely need the services of a cardiologist.
-Holding cash is advisable because during downtimes in the market, you won’t have to sell shares or property that are impacted, you can use your cash which isn’t.
Being forced to sell or taking an income from your fund in a bad market is one of the biggest causes of investment loss. Having cash means you can use them to live off while you ride out the negative times of a volatile market.
-How much does it cost to keep the lights on and the dog and cat and you fed? In other words, how much does it cost to run your household every month? If you don’t know, find out.

Liam Croke is MD of Harmonics Financial Ltd, based in Plassey. He can be contacted at liam@harmonics.ie or www.harmonics.ie