neither a borrower nor lender be
The phrase above comes from Shakespeare’s Hamlet, and actually refers to never lend nor borrow from a friend, but I would expand that to include never lending to nor borrowing from a family member, partner, lover, or anyone else for that matter. Often you will never, ever see a single penny paid back to you. I would also expend that to say never, ever, ever stand as guarantor for anyone either. Because as guarantor you are jointly end severally liable for the whole debt, plus interest, plus charges ~ up to and including losing your home and everything else you own.
- Work out your monthly budget, with hard numbers. How much do you have coming in, and how much goes out, and on what? If you have more going out than you have coming in, then stop fucking wasting money on cigarettes, booze, gambling, drugs, vacations, sex, new clothes and shoes you don’t need…. Or get a higher paid honest job.
- Only ever borrow for two reason; #1 a mortgage to buy your home #2 to buy your car, if you must have a car. (actually student loans to pay for your education sometimes make a third reason) The only borrowing I have ever had, in my whole life, was a mortgage on my home.
- Pay off your debts just as soon as you possibly can, and only take out a loan if that is allowed in the documentation with no penalties. Don’t ever borrow from anyone other than highly respected, and properly regulated institutions. If you have never heard of them, don’t touch them with a barge pole.
- Never, ever, ever borrow on a credit card, for any reason whatsoever. Only buy something on your plastic if you can afford to pay for it in hard cash right there and then, and always pay off all your card debt in full every single month. The interest rates on credit cards are stupidly high. Anyone who says using a credit card / line of credit to consolidate your borrowing is a crook.
- On the other hand, I buy everything on plastic. I do that for 3 reasons #1 I get good points which I can use to get other things #2 because I pay off my card bills in full every month, I get 1 month’s free credit #3 if I have a dispute with the seller, then in the UK the card company will, at the end of the day, refund me in full in the seller will not, or cannot.
- Save for your retirement, however that works in your country and in your company. Save as much as you can afford for your retirement.
- Never ever trust anyone who tries to sell you any kind of financial product whatsoever. If it sounds too good to be true, then it is. If you don’t understand it, then it’s a scam. Never, ever believe anything you see on the internet ~ especially on YouTube. Everybody lies sometimes, sales people lie all the time. Often they believe their own lies, or they’re to badly educated to understand their own products. (That applies to all sales people.)
We had a mantra when I worked in Banking and Finance in The City of London; ‘My Word Is My Bond’. Sadly that no longer applies anywhere. The world of Savings, Loans, Credit Cards, Banking, Finance, The Stock Markets, Real Estate….. are today full of the ignorant, dishonest, liars, charlatans, confidence tricksters, and crooks.
We had another saying in the City of London caveat emptor; which is Latin for Let the Buyer Beware.
To achieve your goals and dreams you are going to need money.
Back in the day I worked in banking and finance, and I saw first-hand just how much of a mess most people could make of their finances ~ usually due to buying things they couldn’t really afford. The three main culprits when it came to unaffordable and expensive purchases were; cars, clothes / shoes, and vacations ~ none of which are essential. (There’s a caveat, in that you may actually need a car and you do need clothes and shoes, but you can buy the cheapest used stuff you can find, rather than flashy and expensive.)
You do not need to be a millionaire, or act like a millionaire, to be successful or feel successful. Financial wealth is only one indicator of success. However, you’re going to need money just to live day-to-day, and no successful person has ever ignored their finances. Conversely, all successful people know how to manage their money and plan their finances. And rule #1 is Borrowing is Bad, especially if you borrow money you can’t easily pay off.
Financial planning begins with these 4 questions;
- How much money do you take home each month?
- What are your regular bills; mortgage, utilities, taxes, loan repayments?
- How much do you spend each month in the various stores you use; clothes, groceries, gas, booze, cigarettes, etc?
- What assets and debts do you have?
If you are in the fortunate position of making more money than you regularly spend, then you should also be able to work out how much you are saving each month.
You need to write all this down, either just pen and paper, or on a spreadsheet.
If you are regularly spending more than you earn, then you are heading for deep shit.
If you are regularly spending more than you earn, then you need to totally cut out some of your expenditure. Stop buying booze, cigarettes, chocolate, and anything else you may be addicted to; gambling, porn, sex, drugs….. Always buy the cheapest gas, buy less expensive groceries, stop eating out, stop using the deli to buy your lunchtime sandwiches and make them at home instead…..
Borrowing is Bad. Some borrowing is worse. PAY OFF YOUR CREDIT CARDS. Credit card debt is ruinously expensive. In this day and age if your paying more than 10% as an annual interest rate on a loan, then stop eating until that debt is paid off.
Some say that they can make money playing online poker. And, that its good to go to the pub most nights a week. All I know is that some people end up on the street.
life on the street is no fun
I want to tell you about the alternative lifestyle I have today. Before I do that, I thought it may be a good idea to tell you something about who I used to be, what happened, where that changed me, and how all that made me into who I am now. My story may give you an idea why I live the way I do now. I will be brutally honest, except where to share some confidences may hurt or embarrass others.
Back in the day I was a Banker specialising in International Treasury Management. My salary and bonuses were much more than generous. When I travelled I flew at the front of the aircraft, where the champagne is given away free. When I was in New York I stayed at the Plaza on 5th. I never used public transport or ordinary taxicabs, (excepting in London where everyone uses the black cabs). I only ever ate at the best places, where they serve the best food and the finest wines. I only drank in the exclusive bars.
I worked at least a 60 hour week. If travel time is included I sometimes worked 3 or 4 days without a break. I once visited Paris, Frankfurt, Amsterdam, Brussels, Copenhagen, Olso, and San Francisco, in a single week.
My major vices were booze, carnal women, a long-term affair, and the over-use of power. I have never had a one night-stand with a woman, nor have I ever smoked or taken anything other than prescription medication. I did not abuse either over-the-counter or prescription medication. The dose of Prozac I was prescribed was bad enough on it’s own.
Regular exercise was a thing of the past. I had no hobbies left. Sometimes, if I could find the time, I would walk around the block near my hotel, and that was about the extent of my aerobic work. Consequently I was overweight and I was always out of breath. I had high blood pressure, an irregular heartbeat, and an uncertain temper. My marriage was on the rocks. I was sporadically attending meetings of Alcoholics Anonymous.
My career was killing me.
It came to a head on Madison in New York, when I was in the boardroom of an advertising conglomerate. I was attempting to tell the chief financial officer that what he wanted could not be done, not with the state of banking technology at the time. The guy would not listen to me, kept interrupting and contradicting me. Out of the blue I found myself thinking; ‘if you don’t shut up I will walk around this table and smack you in the mouth.’
It is never a good idea to hit a client. In any event this guy was built like a professonal football player, (American Football), and I’m a small chap. Afterwards, I realised I was in the middle of a breakdown ~ (nerveous breakdown, psychological breakdown, who knows?).
Right in that meeting I decided it was time for me to get out of the banking business. However, I must have impressed a little because we all signed a ‘heads of agreement’, and I collected a fat cheque as an upfront payment. Then I flew back to the City of London, walked into see my Director, and promptly resigned. Which went down like a bag of vomit. After all, I had the Midas touch.
It didn’t turn out so well for King Midas either.
I never once went back into the banking business. I have done a lot of other crazy stuff before I got here, but I will tell you some of that next week.