Earning a high income in today’s world is a major achievement as we have just a few percentage of the total workforce in the world earning top dollar.
Most of these individuals run a 9-5 jobs and are known to be career minded individuals who give it their all, and are amongst the few people who drive their organization. Earning a good salary is great but learning how to manage it is a different ball game.
Quite a number of high earners have gone back to penury after blowing through their salary without saving for the rainy day. Some of these people now have to feed from hand to might or even go so low to begging for handouts. You might sit and wonder how they got it wrong and how they missed it, the answer is not far-fetched as it is all due to making poor financial decisions which cost them most or all of their available resources. After they feel the impact of the bad decisions they made, some of them stand up and dust off the regret to start afresh which is not usually easy while some just stay beaten and keep to the ground where their decisions have taken them to. It was reported that a lot of NBA stars went from being super rich to super broke and soccer stars are not left out, with former Brazilian soccer star, Ronaldinho going broke and decorated star fighter mike Tyson struggling to survive before landing a life saving Hollywood gig years later, we can say the consequences of a bad financial decision not only destroys what one has accumulated but also sends one back to the starting point.
Investment bankers and asset management organizations have taken it upon themselves to provide financial advice and asset management services to people at a fee to prevent them from losing all they’ve worked for over the years. In some cases, individuals decide that they do not want to hand over their properties and wealth over to someone to manage and as such, they step up to start set up their own ways of keeping their money safe and also find profitable businesses to throw the money on. A few of them take crash courses to understand finance and how it works but only a few get to fully understand the details. Here are a few tips explained in lay man terms on how best to manage your high income without having to lose all on uncultured spending.
• Run a strict budget: A budget is a list created to show the items of things you intend to buy or purchase with available funds. Earning well does not mean you can splurge and go on a shopping spree if its absolutely not necessary. Drawing a budget will help to keep your spending in check and also prevent you from buying things you don’t need on impulse.
• Invest in right stocks and businesses: Investing in a business that is economically viable is an essential key to managing your finances properly and multiplying your returns. Putting your money on a company stock that has no prospect to do well in the stock exchange market will be a total waste of time and waste of revenue too as it is possible that the company might crash since it has no strong feet in the economy. This is why it is essential to carry out due diligence before embarking on an investment spree to avoid buying bad stocks.
• Opt for less costly comprehensive insurance: The Insurance sales man might try to trick you and sweet coat everything about buying an insurance plan at their firm all to land that next bonus check but it is up to you to weigh options and pick which offers more services for less price. The lesser the amount you pay, the more you will be able save.
• Keep a good credit: avoid unpaid debts, loans and credit card settlements as they have bad consequences if left unsettled for a while. This will put you on a blacklist and also give you bad credit which will not look good on your financial records. Remember, if you don’t need it or want it, its of no use buying it.
• Have a retirement plan: Not planning retirement has got to be one of the top 5 silly mistakes top earners make. They feel the money will continue and not stop hence they keep postponing plans to plan how their retirement will be like. Apart from idleness and not being able to work after retirement due to old age, running out of saved cash is one of the reasons why retired career people venture into substance abuse or be seen on the streets asking for handouts. Planning your retirement early does not mean you want to quit working, it only means you’re sensible enough to make plans for when you can no longer chase money like you use to.
Having a good financial plan and proper management of your income is essential if you are to retire as a financially secured individual. It is important to always set something aside for rainy days as it will serve as a cushion when you need something to fall back on.