A Word to the Wise

Have you ever stopped to think about who taught you about finances?  I think like most people I learned quite a bit of horrible habits from my parents.  I also learned quite a bit from the school of hard knocks.  It wasn’t until only a few years ago that I got my masters degree in finance.  Sure that sounds fancy, but I don’t even have an undergrad college degree.  How did I get a masters degree you ask?  Well, I read my bible, specifically the book of Proverbs.    

One of my favorite verses is “The rich rule over the poor, and the borrower is servant to the lender.” Proverbs 22:7  Who do you owe money to?  Do you feel like a slave to them?  Are you a slave to Chase, Sallie Mae, Visa, Ford Motor Company or Kohl’s?  How much of your check is spent before you even get it home?  After spending more than 3 years coaching people on their finances, I have come to realize that most people just assume that debt;  student loans, credit cards and auto loans are unavoidable and just a way of life.  The biggest wealth building tool you have is your income.  When your income is spent before it comes in, then your retirement, savings and kid’s college suffers.

Another great verse is Proverbs 13:7 “One man pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.”  This is the central message in the book The Millionaire Next Door where 100’s of millionaires were interviewed.  Millionaires don’t drive new cars, they buy used ones and pay cash.  They purchase high quality clothes and wear them forever.  Their houses are unassuming but they are paid for.  So many people buy stuff to impress others with no regard to their personal savings and retirement.  I know many people with a $500 car payment so that they can impress someone at a stoplight that they will never meet.

The book of Proverbs certainly isn’t sexy.  Its fairly simple.  There are 31 chapters in Proverbs which makes it a good one-a-day read for a month.  If you are not one to read your bible or you consider this offensive, then let me simply tell you that Proverbs is simply a book of wisdom.  If you are offended by wisdom and common sense then don’t read it.

Proverbs 10:4 “Lazy hands make a man poor, but diligent hands bring wealth.”  When it comes to your money and making good financial decisions, your approach should always be simple.  Be the tortoise, not the hare.  Slow and steady will always win the race.