Military Financial Advice - Army Times

7 common-sense rules for increasing your wealth

Money is a fascinating subject to most of us. We think about it, dream about having lots of it and fantasize about how wonderful our lives will be when we have “enough” money to be happy and secure.

Sadly, that is all it is — a fantasy. Money is simply a tool, one that when managed properly makes our lives easier.

In many cases, having money does not make us happy, create love in our lives or make us feel more secure. In my years of financial practice, I have seen many people worth several million dollars who feel poor and are positive they do not have enough.

Too many of us have allowed money to define who we are. We look up to those who have it, even if they have not really “earned” the money themselves. We assume that people who have money are smarter than those who do not. Despite all evidence to the contrary, we assume that money will make us happy.

Just pick up a copy of one of the supermarket tabloids. The pages are filled with movie stars and other famous, wealthy and attractive people. Most of them are obviously miserable. Most do not seem able to maintain stable long-term relationships, raise healthy and successful children or, in many cases, even hold on to the large amounts of money they have made.

Consider also those who win large amounts of money in lotteries. Statistically, most will be broke in five years; in some cases, they will say that they wish they had never won such a large amount of money, as it ruined their lives.

Most people earn money the old-fashioned way. Over time, if you spend less then you make and put the difference into solid investments, you will have money. The only way to make it fast is by sheer luck.

I have met people who never had fancy jobs, but they saved money and invested it wisely over a long period of time. At retirement, they had paid off their home mortgage and accrued enough of a nest egg to live comfortably. Conversely, I have worked with people with large incomes, large mortgages and fewer investment assets then those who make far less.

Wealth does not depend on what you make but on what you save.

The real secret to happiness is not having large amounts of money, but being satisfied and grateful for what you have right now. That does not mean you should not be interested in money or try to save and invest to bring more money into your life. But it does mean that money should occupy its rightful place in your life as a tool, not be the main focus of your efforts.

New secrets of success

Several years ago, I wrote a column titled “23 rules for boosting wealth.” Of all the articles I have written, it is the one I hear about most frequently from readers (you can find it online at http://www.militarytimes.com/money/financial_advice). Those rules are still valid today, but I’d like to add seven additional ideas:

1. The more you chase money, the more it eludes you. Trying for the big score tempts you into unwise investments and tends to eat away what money you already have.

2. People who gain large amounts of money in short periods of time tend to believe that they do not deserve it because they have not worked for it. Often, this money will slip through their fingers and they will end up back where they started.

3. Sharing some of your money and time with others through charitable work, contributions or just helping others has a strange way of multiplying your good fortune.

4. Money is one of the most divisive elements in a relationship. Before you commit to a long-term relationship, it is a good idea to review with your potential partner how each of you feels about money, and your priorities on saving and investing. Deciding how to negotiate those differences will make for a stronger relationship.

5. If you ignore money, it will ignore you. Spending it all will leave you with a pile of useless stuff that someday your relatives will be selling at a garage sale or dropping off at a thrift store.

6. Teaching your children about money instead of simply providing them with money and things is one of the most valuable gifts you can give.

7. You can’t take it with you; enjoy life now while providing in a sensible fashion for the future.

Barbara Pietrowski is a licensed certified public accountant, certified financial planner and personal financial specialist. Her practice includes tax preparation, fee-only financial planning and investment management. E-mail her at barbarapietrowski@yahoo.com.