My father has been the most influential person in my financial life by teaching me how to let go of fear, focus on what's most important, and make money. Saving and budgeting is extremely important, but if you put all your hard-earned money under the mattress or in a savings account making 0% interest, you're holding yourself back from building wealth.
I'm far more cautious than my dad. My natural tendency is to minimize risk, so I don't always do what he suggests. I've also never lost money by taking his advice, so here are his top five lessons:
1. Don't go into debt over a car. I've never had a car note and that's solely because my dad forbade it while in college. Cars depreciate in value and he felt I needed to put my time and effort into things that earned money. I worked the entire summer before my junior year to buy my used car, which lasted as long as some of my friends' newer cars.
2. Buy a home. If you can afford to buy and are pretty sure you'll be in the area for a while, buying a home can be an excellent investment. The key is to get something affordable, in a neighborhood that's expected to increase in value.
Cities create development plans up to 10 years out, all of which is public information. Check out your locality's website to see what commercial developments are on the way, and consider buying near there before the neighborhood blows up. I did, and my house is now worth 7 times what I paid for it.
3. Have cash on hand. As much of a risk taker as my dad is, he firmly believes in having a liquid savings account with at least three months living expenses.
4. Pay attention to what you eat. Dad is extremely health conscious and exercises regularly. His food choices cost more on the front end, but the payoff is immense, including looking great, being able to fit in the same suits for the last 25 years, having more energy than people half his age, and no other health issue besides slight knee pain. His doctors are in awe of his excellent health.
5. Do you, just be able to afford it. Dad is neither cheap nor a big spender. He decided long ago that for all it took to earn money, he'd only spend it on things that really meant something. He's still working because he loves it, and he and my mom take regular vacations. He's not a slave to debt because he focused on making money and having a great life, and never on buying things that don't truly serve him. He raised us to do the same, and I'm incredibly fortunate.
And so it is.