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  • Tyrone Skipper

Financial rules that are totally worth breaking


Have you ever thought of the things that people continue to do not because they are correct but because ‘that’s just the way they’ve been doing it’?


Look up ways for managing personal finance and you'll find a mishmash of disorienting dos and don’ts that various experts will swear by. It can all be a little overwhelming and while many of these conventional words of wisdom can do wonders for your bank account, I suggest you consider thinking out of the box from time to time. After all, rules are meant to be broken! Or at least some of them are.


Plenty of financially savvy savers have managed to achieve early retirement through dedication, hard work and intensive research put into learning about investments and spending tactics. Popular advice like diversifying your income streams, maxing out retirement accounts or dollar cost averaging can work but what if there's more than one way to skin a cat?


What if maybe, just maybe you don't always have to follow the beaten path? You might want to re-evaluate your financial strategies going forward because sometimes the best course of action is to break some of these rules that initially seemed so necessary.


Hold a job for 20 years

You may have heard it from your parents, you may have heard it from friends, you may have even heard it from the experts. Landing a job in your twenties and sticking it out till your fifties is seen by many as an accomplishment. It indicates discipline and loyalty of character. While it isn't a bad idea in itself, it isn't a compulsory move especially, it seems, in the new economy.


You may have found that special job, that company you'd be willing to work at for the entirety of your career. Maybe you're in a volatile industry with high turnover rates and the longest you've held a job for is five years. Job-hopping can be to your advantage. If you play your cards right, you can even advance at a much quicker pace by taking roles at new companies or shifting spots for better salaries. You may be able to learn more, make more connections and experience a wider range of working environments.


If switching jobs boosts your portfolio and your income, then this is a rule that might just be worth breaking.


Work until you're 65

Sure, the economy might not be doing too great but when is it ever? The rule of thumb that you'll need to work till 65 is simply an average, an estimation. The fact of the matter is, opportunities can be abundant if you know where to look and if you're savvy with your finances (and you get the help you need to save the amount that you require), you may be able to retire before you turn 55 (people have done this before you know).


Be diligent with your saving and investing, build multiple sources of income and manage your debt. With consistency and a little bit of strategy, you have a great chance of retiring before 65.


Follow the 4% rule in retirement

The 4% rule states that you can safely prepare for retirement only after you've saved up at least 25x your yearly expenses. This concept also goes by the name "FI number" (Financial Independence) or "Multiply by 25" Rule.


There are numerous ways to apply the 4% rule. It's a frequently discussed topic and many hold fast to it in order to obtain financial independence and retire early. The truth of the matter is that you probably want to aim as high as you possibly can. The economy is a rapidly changing ocean of uncertainties and you can never be too cautious about the future. In light of this, the more of a cushion you have to fall back on, the safer you could be.


Don't use credit cards

When it comes to financial security, credit cards get a bad rep. Many experts will urge you to avoid any credit card debt as it can take a heavy toll on your stability and lead to insurmountable amounts of stress. The problem with that narrative is, credit card debt (much like money), is just a tool. It isn't an evil demon, it's just dangerous in the wrong hands. Taking on high-interest credit card debt to the point where you can barely keep track of the zeros is definitely not a good idea but keep in mind that disciplined and money savvy users won't have a problem managing their cards.


You can use your credit cards to pay for virtually everything just so long as you keep check on the balance that you owe. Paying with credit can lead to several advantages such as getting cash back on purchases (from 1.5% to 4% depending on the type of purchase) and protection from fraud.


Convenience, certain types of insurance privileges and buyer protection are all included in the package of credit card usage.


Ask me for options

I could help by looking into your lifestyle, financial responsibilities, previous investment plans and etc, in order to give you a thorough valuation and calculations of your finances and suggest options for your needs and wants. Get in touch with me to have a chat.

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