What do you do when you do not know a cooking recipe? If you are like me, you likely hop onto Google or Pinterest and within fractions of a second out pops all of these delicious recipes. You pick the one that is right for you and then you methodically follow their blueprint.
People often want to tackle their financial situation in the same manner. They look for a blueprint and hope to follow it step by step.
Sadly, I have to be the bearer of bad news. There is no such thing as a blueprint to financial success.
There is great advice online but here is something that people often overlook. Personal finance consist of two words. The first word is the most important, personal. Every person is in a unique situation. It is highly unlikely that two people have the exact same financial situation.
This is why looking up, “How to become a millionaire” or “How to save X amount of money by Age___” cannot be relied upon. I must admit though, I googled both of those questions many times!
The truth is, while those articles offer great advice, you need to figure out how to tailor it towards your situation.
Whenever you read financial advice online, including my own website, it should be taken with a grain of salt. We all express our own opinion on a topic. While there are many concepts that most financial experts agree upon there are ten times as many that we all disagree upon.
Here is an example. I am a big believer in living life at every stage. We get to live only once so we should enjoy every moment. However, we need to do so in moderation. This is why I recommend that people allocate 10% of their take home pay towards themselves. This can be put towards that trip you always dreamed of, purchasing an item you always wanted and so on.
Other people may disagree with me. The 10% that is being spent on yourself should be used to pay down debt, or invest for the future. To put it simply, they are all about money efficiency and using it towards the bigger picture.
This is why there is no one size fits all blueprint. Everybody has different priorities. Some value the freedom they get from retiring early while others are content spending a little bit more now and retiring at age 65. I personally cannot fathom working 9-5 for the next 40 years which is why I am pursuing early retirement. But that is a personal choice.
One Common Theme
There is one underlying concept that stands true. Sacrifice. Those people who become millionaires or save an incredible amount of money at a young age sacrifice a lot!
They may sacrifice their social life or other things that may be important to them to attain their goals.
I mentioned earlier that 10% of my take home salary goes towards my desires. What I did not mention was that I expect to save 55% of my salary once I begin work. I am sacrificing my dream of taking that Euro trip I always wanted to enjoy life even more in the future. I recognize that it is important to grind now so I can relax later.
Sacrifice is the one common theme all of these success stories have. Take strategies that you like from various people and tailor them towards your needs. That is the only way to create a unique blueprint. After all, personal finance is personal at the end of the day.
What sacrifices have you had to make for your financial dreams to come through?
What blueprint did you try to follow and realize that is was not tailored towards you?