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10 Pieces Of Worthwhile Advice On Saving From People Like You Who Made A Fortune

Find out what worked for these ten average-joes to become financially independent, and retire at an early age.

Nicole Crampton

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It’s time to save money for your future

wealth-creation-expensive-car

Look ahead to begin your saving

Many aspiring entrepreneurs dream of starting a business with a small sum, to turn into a million-rand juggernaut. After all, every business has to start somewhere. If you’re looking for advice or inspiration, there are plenty of entrepreneurs out there who have turned themselves into household names while achieving their financial dreams.

Is saving easy money? From a distance, it appears to be. But, when it comes down to it, it’s challenging especially when starting with a low amount.

The first question you need to ask is how to start, because most of the time starting is the hardest part about saving for any goal.

Here are ten pieces of worthwhile advice on saving from people like you who made a fortune:

Consider every purchase in terms of cost per hour

expensive-purchase

Luxury items got a hold on you?

Having the discipline to save 70% of your income, could seem impossible, especially considering that the prices of basic needs like bread and milk keep rising. But, that’s exactly what JP Livingston did to be able to quit her job at 28 – with USD2 million in the bank.

Her top piece of money-saving advice comes down to a shift in mind-set: Don’t take prices at face value, but consider them in the context of how many hours of work it would cost, a strategy she picked up from Vicki Robin and Joe Dominguez’s book, Your Money or Your Life.

“If you think about how much you earn and you divide it by the number of hours you work, you get the amount of money per life unit,” explains Livingston. For example, if your cost per hour is R100. That means it would take you 20 hours of worth of work to afford your R2000 worth of groceries, which certainly puts things into perspective, doesn’t it?

The advice

“If you think of things as not just what you save that day, but having that money work for you and compound, it will totally change the way you spend money,” she continues.

Related: How To Start Saving Money Today

Pay off your debt

pay-off-debt

Don’t let your debt collect…

“People who have a lot of debt and loans don’t have the cash flow to save in the first place,” says Scott Wellens, founder of FortressPlanningGroup and host of the “Best in Wealth” podcast.

He continues to advise that if you have debt, you’ll end up paying interest to the credit companies instead of earning interest on your savings.

The advice

“The best way to start saving money is to get out of debt as quickly as possible and have the discipline to stay out of debt. You will be surprised at how much money can be saved on a monthly basis if you kick debt out of your life,” he advises.

Invest in your future by paying off your debts; this is a guaranteed return on investment because you’ll have more flexibility with your financial decisions.You’ll know what to expect and, as you pay off each debt, you’ll have more money to achieve your financial goals with.

Track your expenses

track-your-expenses

Watch what you spend

You need to have a clear view of your accounts, how much you earn and how much you spend on expenses.

“Too many adults do not have an accurate view of their income and expenses,” says Bily Xiao engineer-turned-advisor and founder of WealthMobius.com.

He says that if you measure your income, you can improve it. “So start tracking, take stock of how much you’re saving, identify low-hanging fruit of expenses you can cut, and start setting some incremental goals to increase your saving. Make use of great tools like Mint.com (syncs with your financial accounts) or YouNeedABudget.com (more manual and private) for tracking,” he explains.

The advice

Do the math and figure out which deal is truly the best for your finances in the long run. Not only will this technique help you to save money, but you’ll be able to reduce the amount of interest you earn paying items off each month.

Related: What You Need To Start Saving Each Month In Your 20s To Retire With R5 million

Keep a careful eye on your savings

savings-pocket

Put something away every month

Kristy and Bryce Shen were able to save USD1 million by age 31. They quit their jobs as computer engineers to travel the work, thanks to a diligent habit of tracking their money. “I think tracking is absolutely paramount,” says Shen. “That’s one of the things that would help people a lot financially.”

The advice

“Even if you blow the budget once or twice, it’s not a big deal. Everybody makes mistakes. I made mistakes, too,” explains Shen. “Being able to track it allows you to see: ‘Hey, look! I’m going in the wrong direction. It’s not going towards my financial goal.’ So then you just move back toward the right path, and then you’re good to go.”

Don’t lose your happiness to saving

how-to-keep-happy-while-saving

Don’t make unnecessary sacrifices

When embarking on this goal don’t forget to live your life. Yes you want to achieve your goals, but you don’t want to make yourself miserable while doing it. “I went so hard-core that I made myself really unhappy during the process,” says Mad Fientist during an episode of his “Financial Independence Podcast.”

He kept a meticulous spreadsheet, which helped him to organise and monitor his spending, investments, and net worth, while saving 70% of his after-tax income.

The advice

Yes, you have to be patient, determined and persistent, but avoid becoming consumed with saving that it isolates you.

“I just didn’t want to do anything that involved spending money,” he says. “I just wanted to get there as soon as possible.”

He advises that you need to focus on the power that you’re receiving along the way with the money you’re saving up. Use that power to make your life better along the way. “Don’t sacrifice happiness for that final number in the bank,” he advises.

Related: 8 Rules To Build Wealth When You Weren’t Born Into Money

Optimise your earnings

Optimise your earnings

Earn as much as possible

The key to building wealth is optimising your earnings says Chad Carson, who lives off passive income from 90 rental properties. “Particularly in your first 10 years, if you make mistakes of buying emotionally on your residence as opposed to buying in a very calculated manner by making your residence a house-hack or a live-and-flip, or just renting and investing that somewhere else, the magnitude of that mistake is huge 20 to 30 years from now,” explains Carson.

The advice

Carson lived in one room while renting the other rooms of a property to cover the bond repayments. With his costs covered he used his salary to build a nest egg and buy more rental properties in his hometown of South Carolina.

Now, he spends just three to five hours a week managing his rentals from Ecuador, where he lives with his family.

Automate your savings

automatic-savings

It’s gone before you can spend it

When trying to save seeing that money in your account can be tempting, but if you create a debit order from your account to an investment account you can save every month without being tempted.

“Determine how much you can afford to save each week or month based on your personal income and spending,” says Jamie Pomeroy, Financial Advisor at Merchants Bank.

The advice

“Once you have established a budget and have clear short- and long-term goals, one easy way to get in the habit of saving money toward those goals, is to simply automate it. Set up regular and automatic deposits into your investment and savings accounts,” Pomeroy explains.

Related: 10 Money Habits That Will Help You Get Serious About Prosperity

Re-acquaint yourself with being frugal and develop a side business

develop a side business

Be the frugal one

Joe and Ali Olson now spend their days traveling around the world with their 1 year-old daughter. They were both public school teachers, and they were able to quit their jobs with USD1 million in the bank, retiring after just eight years in the workforce.

They started out by buying properties for a steep discount. They initially lost money, but when the market turned they began turning a profit. By the time they quit their jobs they owned 15 properties.

The advice

They managed to live on USD20 000 a year without any major sacrifices. But even as they saved, their lifestyle didn’t succumb to inflation. They continued to save 75% of their income and resided in their 37- square-meter home. “We cultivated a concept of gratitude about everything,” Ali said. “And once you’re grateful for everything you have, to try to get more seems silly.”

Embrace the challenge

challenge

Be financially independent

Peter and Simi Adeney were both software engineers. They stashed two-thirds of their combined USD134 000 take-home pay in savings. After 10 years they had USD600 000 in investments and paid for a house worth USD200 000.

But the road to financial independence isn’t easy. In fact, it’s loaded with challenges.

The advice

“What it boils down to is enjoying hardship and practicing voluntary hardship every day,” reveals Adeney.

“We’re trained in this country to avoid difficult stuff. And so that’s the first thing I think you need to get rid of if you want to get anywhere that’s different from the other people.”

He continues to say that even if you’re just starting out, cutting down on the extravagant purchases makes the whole process efficient. “Suddenly, you can earn more money and you can spend less money because you engage in this quest to make your life better, which happens to involve doing difficult stuff.”

Related: 12 Mega Money-Savvy Tips To Make You a Millionaire Before 30

What are you waiting for?

starting-to-save

Start today

Between, Justin McCurry and his wife they managed to save up over USD1 million in nine years. Their net worth continues to grow thanks to their investments and currently sits at USD1.7 million.

“When you’re still young, how you save doesn’t matter as long as you’re actively putting away money one way or another,” explains McCurry.

The advice

“Figure out how to invest it as you go along. The planning aspects of it, how much you need to save, your budget, your withdrawal rates, and all that — that’s a lot easier to figure out later in the game,” he advises.

Time is one advantage you’ll never get back so if you’re planning to retire early, don’t worry about knowing everything there is to know about taxes and investments. “Start saving today, and then get smarter at tax planning as you learn more, as you go along,” says McCurry.

Nicole Crampton is an online writer for Entrepreneur Magazine. She has studied a BA Journalism at Monash South Africa. Nicole has also completed several courses in writing and online marketing.

Personal Finance

(Infographic) The Financial Advice Millennials And Gen Zers Want To Know

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful. And that starts with getting the right advice.

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Whether it’s saving for retirement or paying off credit card debt, money management can be a challenge. Of course, different people have different concerns – and that often comes with age. While a 60-something baby boomer might be organising their savings for retirement, your 20-something millennial might be focused on paying off student loans.

In a recent study, financial intelligence company Comet surveyed more than 1 000 people to uncover the top financial concerns of various age groups, as well as the financial advice millennials and Gen Zers want to know and what they hear instead.

Overall, saving for retirement was the top concern across all age groups, with saving for an emergency and affording monthly bills following in second and third. However, it’s no wonder these are some of the most pressing worries – according to the research, 23 percent of people admit they don’t have a savings account, and 43 percent reported not being on track towards their retirement goals. Perhaps that’s because they didn’t hear the right advice growing up. At least that might be the case for Gen Zers and millennials.

According to the research, these young people want to learn things such as how the stock market works, how to manage an investment portfolio, how to invest in real estate and how to build credit. Instead, they’re simply told how to create a budget, save for retirement and pay credit card bills in full every month.

Related: 7 Critical Things Your Financial Advisor Must Meet

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful and comfortable. To learn more, check out Comet’s infographic below.

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Related: Financial Wellness Coach Nelisiwe Masango Shares Retirement Wealth Advice

This article was originally posted here on Entrepreneur.com.

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Personal Finance

14 Ways To Make Quick Cash On The Side

If you need money quickly, here are some solid ideas.

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Need to make some fast money on the side, whether it’s to pay off a credit card or to make your rent?

Keep in mind, making quick side cash isn’t about making a lot of money or getting rich. It’s about getting a shot of capital to help tide you over and put something extra in your pocket. However, some of these side-income ideas can build up your wealth over time. There’s many ways to accomplish this: By participating in the gig economy, the sharing economy, online sales networks, passive income techniques and more.

If you’re looking to make extra money in a relatively short period of time, check out these 14 slides.

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Personal Finance

Take Advantage Of Financial Democracy Made Possible By The New Stock Exchanges

Why should financial democracy matter to entrepreneurs?

Etienne Nel

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Because it creates a society able to afford products and services. Without it, even the innovative products and services that are entrepreneurs’ bread and butter will fail.

What is financial democracy, exactly?

It’s both the right and the ability of the (wo)man in the street and business people to make the decisions that affect their financial circumstances.

Financial democracy does not automatically follow political democracy. For almost 25 years after South Africa’s political transformation, the exclusiveness of our financial markets continued to deprive the vast majority of South Africans of the means to invest, save, and build wealth. South Africa has, therefore, never developed a retail stock exchange environment. So, it has deprived the majority of small and medium sized business of access to capital.

For entrepreneurs to truly flourish, they need a mechanism that easily and seamlessly connects the investor pool with every size of business. And, they need affordable ways to enter both the retail and institutional market.

In short, they need stock exchanges. Ones on which listing takes weeks rather than years, doesn’t break the bank for listing fees, and provides the shortest route to the largest possible potential investor base.

That’s not been possible in the stock exchange monopoly that existed for six decades. Now, it is.

What’s changed?

We now have four new stock exchanges. The resulting competitive environment will significantly reduce the cost of listing – and the cost for investors of buying and selling shares.

Instead of restricting share trading to people or organisations who already have tens of thousands of rands to invest or millions to spend on listing, by licensing four new stock exchanges, the Financial Services Conduct Authority (FSCA, formerly the FSB) has recognised that most financial decisions do not call for high levels of education.

Related: The Role Of Foreign Exchange In The Economy

Most people know how to spend their own grocery money. Most know that it’s better to keep their R1 000 monthly income in a coffee jar than spend R50 of it on bank account fees. People who can barely read and write are immensely skillful at manipulating air time deals to their advantage.

There is significant financial savvy in all social strata.

In the same way, although the mechanics of bookkeeping and accounting may be unfamiliar territory to many entrepreneurs, most have a clear understanding of the difference between profit and loss.

The FSCA has therefore enabled democratisation of the financial markets by enabling the broadest possible spectrum of entrepreneurs and investors to use stock exchanges to participate in and contribute to the economy – on their own rather than prescriptive terms.

How do you take strategic advantage of this democratisation?

  1. Base your business strategy on people’s instinct for making decisions in their own best interests. Trust financial decentralisation, such as one sees in crowd funding and in digital environments such as block chain, where people would far rather trust one another than institutions and governments. This is democracy innately at work in the financial environment and it’s accelerating organically as digital technologies give people more means and the confidence to help themselves – to information and opportunities. Ride the wave.
  2. Tap into people’s desire to innovate. Consumer organisations have proved that letting people interactively help them develop products is a powerful growth engine. Apply the principle by letting people grow your business by buying shares in it, giving you capital and themselves a platform on which to build wealth.
  3. Remember, the ultimate loyalty reward is equity.

Your financial democracy business plan

Look to list on an entrepreneurial stock exchange; one that was founded by entrepreneurs on entrepreneurial principles.

That means: A stock exchange that is already built on financial democracy and decentralisation. One that has, at its core, a single operational concept that keeps things simple for you, automatically gives you an immediate competitive advantage, and, ensures that no matter what your business needs in terms of attracting capital, the exchange can provide all the options in the same, consistent way.

What does such an exchange look like?

It has fintech capabilities. So:

It slashes your listing costs. It achieves this, among other things, by enabling you to populate an electronic prospectus, demonstrating your financial viability, and self publish.

It gives you control by having the granularity and agility to impose relevant governance right down to the individual investor. You get to decide the types and quantities of investors you want to attract. This also enables you to achieve black economic empowerment in perpetuity.

It leads the world by clearing and settling trades in T+0. No-one in the value chain has to hold large sums of money for days following a transaction. Small transactions become profitable. Investors don’t have to risk their life savings on a single large trade. A retail market is opened. An investment and savings culture is entrenched. The economy expands. Your business grows steadily.

It enables anywhere, any time trading via a mobile app that allows investors to see share value in real time. See economy expansion point above.

It integrates processes and procedures, simplifying them and ensuring rapid onboarding of issuers and, therefore, speed to market with new concepts and alignment with the digital economy.

It operates a principles-based regime. So:

It treats you, as an executive, with respect. It’s not prescriptive. It does not insist on excessive oversight, allowing the Companies Act to guide you to sustainability.

It does not attempt to squeeze your company into a pre-defined business or listings format. It recognises and works with your uniqueness.

It obviates the need for expensive specialist listings advisors.

It focuses on financial inclusion and access. So:

Shares can be bought and sold for no more than R1 000. See economy building point above.

Related: 27 Of The Richest People In South Africa

The new world of stock exchanges is integrated, synergistic, holistic, organic, self-fulfilling

Decentralisation of financial control, democratisation of opportunity leads to a whole new economy. One in which, for instance, a taxi operator can finance a minibus through a company in which his purchase gives him shares. A single purchase gives him two benefits: a vehicle on which to found his business and a longer-term investment in shares that he can trade. The funding company gains liquidity through access to a wider base of investors while being able to control who buys and sells and the conditions on which trading takes place. Increasing black equity in business becomes an organic, natural, self-perpetuating process.

Everyone wins in a decentralised, democratised financial market. And it’s the stock exchanges that drive the process.

As an entrepreneur, can you afford to ignore the acceleration that listing could give your business growth?

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