We all did it. Well, in reality, some of us did it and it all made so much sense back then. In Australia, as I suppose all over the world, getting your drivers licence was akin to removing the shackles that held back your social life, growing wings which allowed us to explore the endless possibilities our new found freedom had to offer. We bought a car and away we went.
But no, we weren't content to just leave this car alone. No, we had to put every single cent we made to "upgrade" our beast. For me, this was car sound, sub-woofers, tweeters and crossover front stage speakers, monoblock amplifiers and trying to reach 140dB. So you're probably wondering what this has to do with money and I'm here to tell you that it's a hell of a lot.
So, Lesson101 for all those teens out there (and those of us that can relate). Think of this analogy:
When you started to get a bit of cash together from probably entering the job market, you didn't just modify one part of your car, did you? You bought a fancy head unit and probably an amp and a sub, but you also would have shelled out for nice mags, probably a body kit and even some go fast bits and pieces like extractors and high flow catalytic converters just to name a few. And I have to say, this was really smart thinking, thinking that you should take with you into the world of making money. You see, by focusing on different parts of your car, you "diversified" your interests. You didn't just spend money on mags. You spent money on all different elements to create a much better "overall" package. Imagine Fast and the Furious cars, without the cool body kits...it's just not the same. It's the same with money. If you put all your money into savings accounts, it's just one element. If you only buy real estate, it's only one element. If you pay down your mortgage, it's only one element. If you buy shares, it's only one element. You get my point...
So, I challenge everyone out there to get back to their car modifying roots and apply the wealth of knowledge to finances. Diversity what you do with your money, think about improving the "overall" picture, not just one aspect. People always say "Don't put all your eggs in the one basket", but instead I say, "Don't just get flash mags, make sure she goes hard and sounds awesome too!"
To do this with money I am going to list a few obvious options. Think very carefully about which one will suit you, but the main theme here is to have a range of them (no particular order):
1. Buying real estate.
2. Buying shares.
3. Pay off personal debt (i.e. credit cards/personal loans).
4. Invest in long term prospects such as art and unique cars and motorbikes.
5. Open an online saver and actually save your money.
6. Start a small business.
7. Consider your spendings. Do you really need that KFC for lunch?
8. Find mentors who can help you in your quest to build up an awesome car, eeer.... I mean awesome bank balance....:)
9. Live frugal, although I'm not a great fan of this...
Living frugal is an acceptable way of creating some wealth, BUT (and there is a big but, and it's not mine), it's like having a stock car. Not too much fun and ultimately, it's why you're doing this in the first place...
Until next time my loyal subjects....go forward and diversify!!!