Using Other People’s Money (OPM) comes in to play in things like a matching 401(k) where an employer is matching their money to yours to put away for your retirement.
There are three leveraging tools in a 401(k): Other People’s Money, pre-tax savings, and tax deferment.
If your employer offers a matching 401(k), you will save more money for retirement in the long term than you would saving money on your own.
Balancing your cash flow is about enjoyment now versus later.
This is a subjective arena, but if you look at an objective case study, you can see that it is possible to either save now or later with the same end result.
There are two caveats to either spending now or later; you have to consider how you would adjust to taking a cut on your spending habits, and you have to think about how your long-term health affects your plan.
To have financial freedom, you must look long-term to achieve short-term financial flexibility and financial freedom.
The two key areas to look at for short-term flexibility are expenses and savings.
The two largest areas of expenses are in housing and transportation.
Save 10% of your income and contribute at least the minimum to get the match on a 401K to ensure you have enough savings to cover emergencies or career moves.
We tend to ask our close family or friends for financial advice when we should really turn to a professional to help us.
When looking for a financial advisor, there are a few things you should keep in mind, but LRC – Leadership, Relationship, and Creativity, is key.
Big-name financial firms are not always the best places to turn to for financial advice as many times, they have a set of services or products they are expected to push, whether you need them or not.