Financial Strategies For a Whole New World

When it comes to determining the right level of financial success or wealth for you, you have to decide what's really important to you and then view money as a tool to help you obtain your objectives in life. It's not an end reward unto itself. We all have to find the right amount of balance in our lives. It starts with saying "What do I want out of life in terms of material things? What do I want out of life in terms of time with my family?" Then you use money to help figure out how much you'll need to get there, so you can achieve that balance.

Borrowing money and managing debt are two concerns most people have when dealing with their personal finances. It might sound simple, but only borrow money as long as what you invest the money in earns a higher interest than the cost of borrowing. Borrow money at 5%, 10%, 20%, as long as you're earning 10%, 15%, or 25% on the money that you borrowed.

Don't borrow for lifestyle, for travel, for things that have no business value. That kind of borrowing is ridiculous. You end up spending your entire life living in the past, trying to pay off past experiences, and it prevents you from moving forward. When it comes to managing your debt, you can't just say fanatically, "I am going to pay off all my debt." You have to go through each item and say, " Credit cards, 21%, pay them off?" Absolutely. "Mortgage, 5%?" Maybe not. After taxes it might be costing you 3%, and you can buy municipal bonds at 5% today. You have to go item by item through your financial situation. Figure out what the cost of money is, figure out what you could do alternatively with that money, and then make intelligent decisions.

There is a way, if your outside of Wall Street, to make money in the stock market. The only real way to make money in the stock market is to have an edge over other people. The only way you're going to have an edge is to have more knowledge. This is not knowledge that you read about on Yahoo or follow in the New York Times. Everybody has that information. This is knowledge that you have gained by working in a particular field and knowing the product and services in that specialized field like the back of your hand. You have specific knowledge of certain industries, so that's where you should be investing your money.

You should keep a list of the companies in your industry that make the products that you use. How well are they doing? Who is doing better? This is where you have your natural edge, and you should take advantage of it. There is no reason to give your money blindly to someone who says, "I can invest and make you more money." You should be doing it yourself.