One of the best ways to achieve success is to imitate people with a demonstrable history of success. This is just as true when it comes to personal finances.
Fortunately, there are plenty of experts who’ve mastered the art of financial management and are more than happy to share their tips with everybody else. You can benefit from their counsel.
Here are some personal finance gurus who lead by example:
Dave Ramsey is well known to his followers as the “get out of debt” guy. He routinely counsels against incurring any debt and even advises people to destroy their credit cards. Some Ramseyites have not only followed his advice, but have also demonstrated no small amount of creativity by eliminating their credit cards with a variety of imaginative methods, such as baking them in an oven at 400 degrees for an hour or tossing them into a wood chipper.
Ramsey also tells people that long-term disability insurance is mandatory.
“If you’re 30 years old, you’re 12 times more likely to become disabled than die by age 65,” he says. “Everybody knows you need life insurance. There are lots of people walking around without disability insurance. It’s a really bad idea.”
Manisha Thakor is the CEO of MoneyZen Wealth Management. She advises her clients to plan ahead for the type of market volatility that we’re seeing right now. She also says that stock market dips shouldn’t matter because nobody should be investing in stocks for the short-term.
“I explain how the money that they have in stocks is, by definition, money they don’t need to spend in the near term,” she says. “If they needed to spend it near-term, we would never have put it in stocks to begin with; it would have been allocated to high- quality fixed income.”
Pamela Yellen is the author of the book The Bank on Yourself Revolution. Her advice to parents of college students is to maximize financial aid as a means of cutting costs for college.
“Paying for college without spending your life’s savings is one of the biggest challenges faced by families today,” Yellen says. “Families today must look outside conventional methods of paying for college, most of which come with hidden drawbacks and many strings attached.”
Michael Kitces, publisher of The Kitces Report, says that young people should focus more on their careers and less on trying to cash in on big stock market returns. He advises millennials to save money early and buy low-cost index funds once they’ve built a nest egg.
“The amount of return you get then actually starts to matter a lot, but the risk you’re taking matters a whole lot more, too,” he says.
Bob Lotich is the founder of ChristianPF.com (recently rebranded as SeedTime), a guide to financial management from a Biblical perspective. He challenges people to live below their means as way of getting out of and avoiding debt.
“In fact, it’s essential that you recognize that the inverse of living beneath your means is the very cause of being in debt in the first place,” he says. “Debt is the result of living above your means. If you earn $50,000 per year, but you spend $55,000, you will add $5,000 to your debt each and every year.”
He also says that people who live beneath their means will become automatic savers, experience less stress in their life and avoid becoming trapped in a job.
Carl Richards is a personal finance columnist for The New York Times. His advice for people who read his column is to not become so overwhelmed by huge financial responsibilities that they give up on reaching certain goals.
“I find it fascinating how we get distracted by things that might happen, often to the point that we overlook what’s right in front of us,” he says. “We do this a lot with money. We focus on big financial goals, like buying a home, paying for college or retiring — and they seem so big we convince ourselves they’re impossible to reach. Then, because we feel overwhelmed, we stop trying to reach them.”
He tells people to simply stay on track by putting one financial foot in front of the other and, over the long term, those audacious goals will be met.
Continue to pay attention to the advice listed here and you’ll stay on a time-honored path to financial success.