This is an article I’ve wanted to write for a while. It discusses 33 lessons about life and money that I feel are important. While the lessons are useful for everyone, they’ll especially be of benefit to someone that’s just starting out. I’ve learned quite a bit about life and money in my 40+ years. I’m excited to share what experience has taught me with you.
Your views will probably be different to mine in some of the areas and that’s ok. This isn’t a “thou shalt” list as much as my sharing the experiences that have shaped me into the person I am today. I’ve divided the list into two major sections – Life and Money. The items in each section are not in any particular order. With the exception of the last item in each category, I wrote them as they came to mind.
Let’s get started.
1. You have two ears and one mouth for a reason
Ever notice that pretty much every animal on this planet of ours has 2 ears, 2 eyes and yet only one mouth? Your ears and eyes allow you to observe what’s happening around you. Nature apparently thought that observation is more important than talking.
Spending more time listening to others and less time speaking will take you further in life. You don’t learn anything when you’re the one doing all the talking. A side benefit is you’ll immediately become more likable by people. Most people tend to enjoy the sound of their own voice so don’t deny them this pleasure.
2. Don’t be in a rush to get married
In Western culture, 40 – 50% of marriages end in divorce. While there are certainly cases where couples marry early and the relationship lasts their entire life, this is more of an exception rather than the rule. For my younger readers, this is especially important advice to heed.
The person you are when you’re a teenager is very different to who you’ll be in your 20s. It’s not really until your late 20s to early 30s that you realize who you really are as a person. If you don’t know who you are and what’s truly important to you, how on earth are you in a position to decide on a long-term mate?
That’s right. You’re not really. Wait until you’re a bit older, settled and know what you want before entering marriage. It’s far less painful than going through a divorce.
3. Avoid being critical of others
There are few ways to make enemies faster than becoming known as a person that criticizes everyone and everything. It’s negative energy that makes you come across as a complainer.
In life, people are going to do things differently than you and it’s important to realize that it’s OK. If you sit back, watch and listen, you actually might learn something new to add to your bag of tricks. This can translate into gaining broader knowledge that could be useful in the future. A win-win my books!
4. A college education is a means of providing for yourself
For the love of everything holy, do not use college as an expensive form of self-expression. The purpose of college is to help you learn a specialized skill. Ideally, you’d want that skill to have high economic value in the market.
So, unless you’re already wealthy, don’t spend large amounts of money and time pursuing a discipline that doesn’t allow you to support yourself. There are other options for education that don’t involve attending college. Do research to determine what knowledge and abilities are required for the career you are interested in. Be realistic.
5. You only have one body. Take care of it
Second only to time, your health is your most precious resource. Making lots of money is meaningless if you’re too sick to enjoy any of it. Regular exercise does wonders towards keeping your muscles and cardiovascular system in tip top shape.
To that end, I’d suggest making physical activity a regular part of every week. It’s much easier to develop a routine that allows you stay healthy than having to correct many years of abuse. I’m a big fan of martial arts, but choose whatever works for you and stick with it. The goal isn’t to make you the next American Ninja Warrior, but to improve your quality of life and functionality.
6. You’ll never please everyone
To quote Lincoln and Lydgate “You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time”. No matter how well intentioned your actions are, someone will find a way to find them offensive.
Don’t get too hung up on the fact that someone doesn’t like you. If you’ve done nothing to offend them or they don’t even know you well enough to form an opinion I’d recommend not taking it to heart.
Remember that by all accounts Jesus Christ was a pretty good person and yet you saw what people ended up doing to him.
7. Dedication and focus will take you a long way
Learn to stick with things even when you hit roadblocks. Nothing in life worth doing comes easy and without hard work. When you set out on a new journey, don’t consider a major change in direction for at least six months.
In an age where attention spans are measured in milliseconds, you’ll stand out among the crowd if you can focus for extended periods. A common theme among anyone that’s had notable achievement is persistence bordering on being stubborn.
8. Be careful of the advice you follow
Just because your friend or family member is smart in one area, doesn’t mean it carries over to another. Before you follow anyone’s advice, first ensure they’ve realized a degree of success in that space first. An opinion doesn’t equal good advice.
You wouldn’t want to ask a neighbor how to create a golf course lawn when their yard resembles a weed patch.
It’s a course of wisdom to learn from people with experience. Just make sure their experience has yielded the results that you’re after.
9. You can learn something from everyone
This is one I tell my kids all the time. You can learn something from everyone even if it’s what not what do. Don’t be quick to discount the value of a person just because they look or speak differently than you do.
For the most part, everyone is good at something. Granted, what they’re good at might not be important to you but that doesn’t mean you should be quick to write them off.
You don’t want to miss out on an opportunity to learn something new or create new friendships. As you age, you will realize that it’s our differences that make life interesting. Cultivate this by embracing the fact that you can learn something in even the most seemingly insignificant times of your life.
10. Books are still important
Despite living in the information age, much of the best knowledge towards leading a successful life can be found in books. Regular reading is a great way to feed and exercise your brain.
Books make you think and make use of your mind’s eye to recreate the author’s story in your own way. This is part of the reason why the movie is usually never as good as the book. The story becomes personalized and uniquely colored when you read.
These mental gymnastics that reading books subjects your brain to are among the best ways to keep your mind sharp. If at all possible, reading should be part of your weekly routine.
11. Patience really is a virtue
Along the lines of maintaining focus, patience is an important quality to cultivate. Part of the reason why people don’t achieve anything of worth, is because they don’t give it enough time.
In my post on achieving ambitious goals, I gave the example learning to ride a bicycle or amass a large sum of money. When you’re a patient person, you learn to find joy in the process vs. the end result.
Patience is also important when working with others. It contributes to your setting more reasonable expectations. This will reduce your frustration which is great for everyone involved.
12. Don’t be too quick to speak your mind
There’s no expiration on being able to tell someone to go to hell. If… actually when someone does something offensive to you, don’t be quick to tell them off. Realize that in many cases, you’re simply the object they’re using to vent a frustration in some other area of their life.
I’m not saying that you should become a door mat. It’s just that not being thin-skinned will help you avoid doing or saying something that you’ll later regret.
If the person is truly a jerk, you can always tell them how you feel at a later time.
13. Being “right” isn’t always the right thing
This is great relationship advice. I often tell my kids “In life you can be right or there can be peace. Make it your aim to regularly choose peace.”
When you really think about it, being right is often more about saving face than anything else. You’re having a heated debate about some topic where you feel your opinion isn’t being heard. So, you end up saying or doing something that embarrasses or otherwise makes the other party feel stupid.
In the end it’s rarely worth it. Pick your battles carefully.
14. Learn to think for yourself
You’re a Republican and I’m a Democrat, therefore, I must dislike you. The “if you aren’t with us, you’re against us” mentality is presented as the proper way to behave by the media.
What’s important to realize is that very few people are 100% anything. Most people have conservative views in some areas and liberal views in others. The point I’m trying to make is the importance of forming your own opinion based on a rational thought.
Make it a point to ask regularly ask yourself if what you’re hearing sounds reasonable. The social and news media all have an agenda and, in many cases, presenting the truth isn’t at the top of their list.
15. Your kids will pay more attention to what you do than say
If you have children realize that “more is caught than taught”. While they may not always agree with you, behaving in a way that’s consistent with what you tell them makes a bigger impression than anything else.
A great example of this is when I talk them about the importance of consistency in life. Initially I often had to drag them out of bed on Saturday mornings for karate. They would often come up with suggestions for other activities that in their mind would be more fun. We’d always make it the point to make them go regardless of the complaining.
These days, there’s far less arguing because they realize that dad isn’t bending on this one. When I recently drove my oldest home from college orientation, I spoke with her about the importance of consistency in her studies. She chimed in “Yeah, yeah I understand. Just like how you are with karate”. So, as you see, she learned the importance of sticking with something and practicing consistency, because she sees what I do for myself.
What you regularly do matters more than what you say. Be mindful in your actions. Make them deliberate. Be sure to teach them everything you know about life and money.
16. Disagreement is normal and healthy
If everyone agreed on everything life would be incredibly boring. Disagreement feeds innovation and progress. It’s the reason we can buy cars in different colors, why there are different styles of martial arts and why women and minorities are now able to vote.
Disagreement provides you with the opportunity to see a different way of seeing the world. Sometimes that new way is better. Other times not so much.
Before you form strong beliefs in an area of your life, try taking the perspective of the other side. A fun exercise is to argue against your own deeply-held view. At a minimum this will provide insight into the other side’s thought process.
You might even learn that you don’t feel as strongly about the topic as you once thought you did.
17. New friends are good. Old friends are better.
As I get older, I’ve learned to value my friendships more. It’s so easy to get caught up in climbing the next mountain that you forget that the people in your life are what’s really important.
If you have a friend or loved one that’s been at your side through everything, regularly let them know you appreciate them. True friendships are very difficult to form so treat the ones you do have with respect and care.
18. Take stock of your accomplishments
One of the 14 attitude requirements of Tang Soo Do (the martial art I practice) is to “regularly inspect your own achievements.”
This is great advice for areas of your life outside of martial arts. When you’re pushing hard towards some goal it’s important to occasionally step back and realize how far you’ve come.
Perhaps you’re pursuing a college education and you’re tackling some difficult subject. It would be helpful to look back at times when you faced and overcame similar challenges. It could be the mental fuel you need to get through whatever it is you’re working on.
We’re all capable of much more than we think. Frequently recalling previous accomplishments is a great way to help us remember that.
19. Value your time
Time is your most valuable resource. You may not have the net worth of Warren Buffet, Bill Gates or Jeff Bezos, but you have the exact same 24 hours in a day that they do. It’s an odd trait of human nature that we tend to place less value on things we didn’t have to work for.
Making the most out of how you use your time is a huge part doing well in life. I’m not saying you should become a focused hermit that never does anything fun. What I’m trying to emphasize is balance. You need to be cognizant of how much time you spend between productive and unproductive activities. To quote Tony Robbins – “where focus goes, energy flows”.
The motivation isn’t necessarily always money. Let’s say you’re working on an autobiography to leave for your kids and future generations. In that case, I’d say it’s more important to spend time writing your book than reading someone else’s.
Time is one of the few resources where a degree of selfishness is required to prevent spreading yourself too thin.
20. Invest in yourself
This is one lesson I’m glad I learned in my early 20s. I knew what I wanted for my career, so I would regularly dedicate hours each week towards improving my knowledge. Increasing knowledge in your area of focus is priceless. Once you have it, no one can take it away from you.
Realize that it’s no one’s job but your own to get what you want out of life. If you need knowledge or a skill in some area, it’s on you to figure it out. Of course, you should get the help of others whenever possible. Just realize that the buck stops with you. Don’t expect to be spoon fed everything. Take stock of what your knowledge gaps are and work towards improvement. Time doesn’t stand still for anyone.
It’s your responsibility to create the tapestry that becomes your future. Own it.
21. Be Generous
I saved the best life lesson for last. While you’re on your journey through life climbing mountains and slaying dragons, remember to give of yourself to others. You can do this materially or even better – with your time.
Generosity shapes you for the better as a person. It’s a way of telling yourself that despite what you have going on, there’s always room to help someone else. This, in turn, causes personal growth.
You get more of what you put out in life. If you want more money, learn to give some of what you have away. If you want more time, learn to volunteer. This especially works best when you help people that have no way to repay you.
Being generous is one of the most important traits to develop in your life.
22. Opportunity cost
Opportunity cost means realizing that doing something in one area means not doing something in another. Keeping this in mind when you spend money will cause you to give a second thought to a given purchase.
Take buying a new car at $30,000 as an example. That $30,000 could potentially turn into over $241,000 in 20 years if it were invested instead of spent. I’m not saying that you should not buy the car. It’s just important to be aware of what a spending choice can potentially cost you. Learning to weigh opportunity cost will help you make better spending decisions.
23. Avoid consumer debt
Taking on debt is typically an unwise decision. It’s especially foolish when it’s used to finance items that have no chance of producing a return. That said, I’m not here to preach that credit cards are evil and that you should get rid of all of them.
What I am saying is to be smart about how you use debt. It’s far less bad if used debt to finance your home or rental property vs. a heavy Starbucks habit.
Consumer debt is a way of borrowing time from your future to finance today’s purchases. In the end the books have to balance. Spending heavily now means not being able to do so in the future. Do your best to pay cash for the things you want and need rather than using future money that you’ve not yet earned.
You might even realize that some of those “must have” purchases are not quite as important as you first thought. Take time to sift and weigh the potential value of purchases before shelling out your hard-earned cash.
Your future self will thank you for it.
24. Avoid student loans
Like consumer spending, you should try to pay cash for higher education if at all possible. It still blows my mind that an 18-year-old can easily sign up for more than $100,000 worth of debt without have any current way of paying it back. In many instances the tax payers are left holding the bag.
Outside of rare forgiveness programs, student loans never go away unless you repay them. In most cases, they’re not even dischargeable in bankruptcy. At a minimum, they cause you to begin your career with a huge elephant on your back.
If you insist on taking out student loans, make sure that you’re getting a degree in a profession that pays well. It makes zero sense to spend more than $60,000 to obtain a degree for which there’s no economic value. There are other avenues for education that still allow you to be economically successful without incurring debt.
Don’t forget to do your due diligence by looking for educational grants. This is a great way to reduce the financial burden of higher education.
If you’ve already graduated college, check out my article with advice written specifically for new college graduates.
In the event that you’re reading this after already taking on student loan debt, I’ve also written a post discussing the best way to get rid of student loans.
25. Compound interest is a beautiful thing
Begin investing money as soon as possible. If money is well-invested in a stock or index fund portfolio, it will absolutely blow your mind what happens in less than 10 years. Compound interest can do wonderful things for your finances but it does require that you feed the machine regularly.
In support of our chat earlier about opportunity cost, it makes sense to give investing a heavier weighting than consumption. The net effect is a bit of a paradox. By not investing and taking advantage of compound interest, you practically guarantee you’ll never be able to spend without worry.
In my article on increasing your savings rate, I provide ratios for how much I think you should save. I also show the effect of my suggested savings rate on your portfolio.
26. Don’t borrow money from friends or family
Want a proven way to ruin relationships with friends or family? Develop the habit of borrowing money from them. When you borrow money, you enter a business agreement that does negative things for your relationships.
Imagine a scenario where you borrow $500 from a friend. Until you repay them every time you’re out spending money, they’re going wonder why. If you keep this up long enough, feelings of resentment are going to develop.
By borrowing money you’re essentially turning your friend into your banker. How many of you are in love with your banker?
Each of you can probably remember a time when someone borrowed something from you. A sweater? A book? Money? Do you remember how it made you feel when it was returned dirty, torn or not at all? Resentment is a terrible thing.
27. Don’t lend money to friends or family
For the same reasons as above, don’t lend money to friends or family. I’ve been in this type of situation and can assure you it ruins relationships.
Either say “no” or simply give them the money if you’re in a position to do so. It works out better for everyone that way.
Saying “no” doesn’t mean that you don’t care for the other person. Don’t let guilt force you to do something that you’re likely to regret.
28. Spend more money buying assets instead of liabilities
Assets feed you and liabilities eat you. In the simplest of definitions, an asset will regularly put money in your pocket while a liability doesn’t.
I go into detail on this point in the following video.
29. Understand the difference between Needs vs Wants
This one is pretty easy. Basic human needs are food, shelter, clothing, and love. Everything else is a want. I know that sounds harsh, but it’ll help you to keep your spending in check. If you are truly honest with yourself, you should be able to apply common sense to moderate this. You certainly don’t want to get carried away and delude yourself that the most luxurious item is a need instead of a want. Be reasonable.
Don’t put buying “stuff” ahead of taking care of the essentials or maintaining your relationships with others. There’s nothing wrong with buying nice toys. Just keep them in perspective. For a easy guideline to curb your spending see my post about the 5X spending rule.
30. Time in the Market beats Timing the Market
Care to guess how much missing the 20 best days in the stock market over a 20-year investing period would cost you? Let’s say you started with $10,000. How much do you think that could be worth in 20 years given an average market return?
Thankfully the fine people over at Yahoo Finance have answered this question for us. If you missed just the 20 best days in the market over a 20-year period, your initial $10,000 would only grow to $12,570. This doesn’t sound so bad until you realize that were you invested for the entire 20-year period, you would have had $40,135. Missing just 20 days cost you $27,565. Ouch.
The lesson here is that jumping in and out of the market based on some timing strategy is a fool’s errand. No one has done it successfully for any appreciable period of time. It’s wiser to assemble a balanced stock portfolio, add to it on a regular basis, and leave the money alone.
31. Spend less than you earn
You’re not Congress. Create a monthly budget that allows you to take care of your needs while still building a financial nest egg. Learning to delay gratification is a sign of maturity and the keystone to financial success.
It’s a huge factor in determining whether you’ll build wealth over the long-term. Though it may seem difficult initially, it should become easier as you see your finances improve over time. Be patient and give it time. This is one of the key points that every financial advisor will harp on because it’s that important.
32. Maximize your ability to earn money
Because time is your most valuable resource, it makes sense to maximize how much you can earn. Regardless of your profession there are likely certifications or training you can leverage to increase your value in the market.
Most people make the mistake of not continuing their education once they leave college. This is a huge mistake. Often what separates top earners from everyone else, is the time they invest in improving their craft.
Improvement in this area will likely require temporary sacrifices in other areas of your life but the payoff is worth it. Accurate thinking obtained from specialized knowledge is the most valuable currency today. It allows you provide better solutions faster than your peers.
Companies and people will pay you well for being able to do this.
33. No one will care about your money more than you.
Similar to investing in yourself, no one is going to care about your financial future more than you. Your savings and investments have to care of you and your loved ones in your old age – not your financial advisor.
Regardless of their credentials, history, or promises, it is YOUR job to keep an eye on your finances. While it’s wise to get investment advice from those qualified to give it, the buck ultimately stops with you. Trust but verify.
At a minimum you should learn enough about investing to know if the products you’re being pitched are ones you should consider.
Time for you to weigh in
Phew! That was quite the reading exercise. Are there any other valuable life and money lessons I that missed? Do you disagree with any of mine? Let me know in the comments below!