Nuggets of Wisdom? What did I do to well to set me up financially

In one of my previous articles (Do you wish you met me 10 years ago?), I shared some of my key learnings (from a financial planning perspective) over the course of my life from mistakes I made along the way. I know I have not done everything perfectly and I would be lying if I said I have a near perfect set up at the moment. To me, it is always a work in progress and a constantly evolving animal as life and goals change. 

There are, however, some things I feel I did well early on and continue to do which has put me in an above average position, which I want to share with you.

Managed my debts well - Like most, I also came out of university with several thousands of pounds worth of student debt. I also had no money to my name - I remember asking my dad for ￡100 as I had maxed out my overdraft facility but I needed summer survival money before I started my first job. 

I have never liked the concept of debt, so as my student loan loomed over me, I paid it off regularly and made overpayments every few months when I could afford it. My loan was cleared within 2 years. 

During this time I didn’t take out any credit cards to ensure I spent within my means. Once I finally got my first credit card, I set it up with a direct debit to clear the balance every month; No way I was going to pay 20% annual interest rates on unpaid credit card debt!

I’ve maintained this position ever since so I am debt free (aside from mortgages which are being serviced by rent and the property I live in). This control of debt and spending allowed me to avoid negative association with that word and instead, I make it work for me.

Started saving early - Once I became debt free, I saved but at the same time spent on some luxuries (it was my first taste of real money, after all!). Whilst there was room for improvement on how much I actually saved, the key thing was that had consistency. My discipline formed early and would prove to hold me in good stead later on in life, no matter how much I earned. 

I have continued this saving trend even in my 30s and made commitments to myself that no matter what I earn, I have to put away a certain amount of cash away for my future - this allows me to live within my means and also know that I am well equipped for my latter years.

Invested early - I’ve always been interested in growing money so with the money I saved, I started ploughing it into different types of investments. Sure, it was scary at first and I didn’t really have much of an idea of where to start - but I picked up some investing magazines, read stock picking books, carried out research on the Internet, spoke to my colleagues (in banking at the time) to get some inspiration. I knew that if I didn’t, my money would just be sat in my bank account losing out to inflation.

The earlier you start, the sooner you realise that it’s not as complicated or as taxing as you think.

I learnt the importance of getting your money invested early on. Sure, in theory if I earn enough money in my lifetime, I could get away with parking the money at bank and then withdrawing it when I need it in the future. But why make my life more difficult than it needs to be? If I can triple it by the time I need it, why not?

Was adventurous with investments - I wasn’t scared to invest in risky assets. I went aggressive at first and started buying stocks, as this was post 2008 and the markets were extremely volatile. I had a mixed bag of results where I would make some quick money but also lose a lot the week after. 

You never really understand risk until you’ve tasted the bitter reality of losing your hard earned cash. 

I personally found short term investing with high volatility was more like gambling, too labour intensive and the results were too varied - I needed stability in my portfolio so I looked at alternatives. Losing money also left a lasting impression on me so I was keen not to repeat past mistakes - at least, not to the same levels as my carefree past.

As a result, I now have a fairly well diversified collection of investments including shares, private bonds, insurance, crowdfunding, peer to peer lending, property, crypto currencies and funds. All of these generate different returns for me but overall provide me with consistent, stable growth in my assets (instead of losses!) which will ultimately provide for my future.  

Not wanting to rely on anyone - Except for when I finished uni and my dad lent me ￡100, I have been financially independent; something I plan to continue throughout my life. I haven’t always been the most independent type but over time, I have understood the importance of not relying on people to bail me out. I want to be in a position where no matter what life throws at me, I will be equipped to deal with it, financially, at least. The basics of this is simple: save regularly, invest regularly and protect yourself against the unknown.

I sought advice from friends and professionals along the way though; starting off knowing next to nothing, there’s no shame in asking for guidance from people who are experienced. The core feeling of not wanting to rely on anyone gave me the drive to learn, confidence in my decisions and respective investments - it also provided me with an appreciation of the importance of planning ahead. I want to maintain my current lifestyle and continue it into old age - this requires preparation.