Although it may be, financial success doesn’t have to be the equivalent of a fancy French pastry: millions in savings, lavish spending, complex investment plans, and expensive directions. The key to financial peace of mind is akin to a simple and humble, yet utterly satisfying recipe for pumpkin pie. All you need is to treat a few basic ingredients with a certain degree of care.
Recipe and tips for financial success
Know what you are trying to cook
Have you ever tried to cook a recipe that you’ve never tasted before or even seen a picture of? It’s very difficult. It’s very difficult to create something when you don’t really know what that thing actually is.
Financial planning is no different. You have to envision the future you want to live.
Your future doesn’t have to look like anyone else’s. Actually, want to know a secret? Actually, my family doesn’t like pumpkin pie, so I make lemon meringue. Your financial goals don’t have to look like everyone else’s, the important part is to have a goal and a goal that makes you happy.
Make sure you have all the ingredients and tools
It’s much easier to follow a recipe when you know the ingredients and tools you need and have them all on hand.
Components and tools needed for financial success include:
- Income (and spend less than you earn)
- Your values
- Save enough
- Investment
- Protect yourself from risks
- Some know how
Our recipes: Bouldin’s Retirement Planner is a complete recipe book for financial success. We’ll take you step by step to the future you want.
Read the entire recipe before starting
The one lesson I remember learning to cook as a kid? Read the recipe until the end before starting.
Following any recipe requires a series of steps that may or may not make sense without understanding the end goal. And if you cut food too early during baking, it could result in a disastrous dish. Don’t refrigerate the butter and you will end up with a dense, greasy crust. Take the pie out of the oven too soon and the custard will be a mess.
The exact same applies to your financial life. You want to make sure that you are able to gather all the required ingredients and understand how to mix them together in the right proportions, in the right order, and using the right techniques to achieve the financial success you want. You need a financial plan for your entire life.
Use the Boldin Retirement Planner to create and maintain your financial plan.
Your Budget: Kind of like the crust of the pie or the foundation of financial success
How much you earn, how much you spend, and how much you save is truly the foundation of financial success. It is the crust or foundation of your financial pie.
You should feel in control of your daily and monthly finances as well as on the right track to achieving your long-term financial goals.
Maintaining a budget today and planning for future spending needs are critical to your financial success and are the keys to financial peace of mind.
Invest: Bake your savings
So, if we can stick with that analogy, investing is like baking your own pie. Your pie won’t be edible if you don’t put it in the oven and wait for it to make it. Baking a pie is like magic. You can place the sticky mess into a hot machine and leave it alone while it turns into a silky custard batch with a flaky crust that, if you’re a pie lover, is just as satisfying and delicious.
And you don’t want to be peeking into the oven all the time and making adjustments while your pie is baking, so you should just put it in and forget about it.
You can use the same strategy for your investments. Ideally, you can invest your savings in sensible investments and simply wait for the money to accumulate. With a long enough time horizon, you can ignore the market’s highs and lows and let the markets do their job, especially if you keep your investment strategy simple. Many experts recommend a portfolio of index funds that you can buy and hold for the long term.
Note: Pumpkin pie is just one component of the Thanksgiving feast. Depending on your investment goals and financial needs, index funds may be just one type of asset in your overall portfolio. Here are some resources to help you determine which dishes you need and the best baking times and temperatures for financial success:
Best asset allocation at different ages
Is the retirement bucket strategy right for you?
Sample asset allocations
Debt Management: To achieve financial success, you will need to make the right substitutions
What is the debt analogy in a pumpkin pie recipe? Debt may be the substitutions you have to make if you don’t start with all the necessary ingredients when starting the recipe.
Sometimes recipe substitutions lead to delightful results (Chinese five spice instead of cinnamon) and sometimes they lead to disastrous results (salt instead of sugar). The same applies to debt.
Leverage that helps you get ahead in life: Some college debt, a home mortgage, and some car loans can be beneficial to your financial success (especially a mortgage that can be more of an investment than long-term debt). .
However, other debts can wreak havoc on your financial wellness and make it impossible to advance financially.
Understand the risks
A few years ago, two days before Thanksgiving, our oven became erratic. It will start playing, then stop randomly. We called the repair specialists and they were booked. We searched for what might be wrong and frantically ordered parts from Amazon, and they did not arrive in time. In the end, we fiddled with it and could barely get a turkey and all the sides actually cooked by turning the oven on and off every 10 minutes or so.
But boy, I wish we had a double oven – a backup.
To achieve financial success, you’ll need to have backup plans for things that are likely to go wrong: inflation, long-term care needs, and stock market fluctuations. However, you won’t be able to imagine and plan for everything that might happen, so here are some additional tips:
Don’t forget the whipped cream: Prioritize what’s important to you
Budgeting, investing, debt, and risk can all be very stressful. However, money is not just a burden. In fact, money can buy happiness, especially when you spend it accomplishing what’s important to you.
You want to plan your money to enable you to live according to your values and what makes you happy. After all, I don’t know anyone who likes pumpkin pie without whipped cream (or even ice cream). Your financial life needs whipped cream, too.
Share with people important to you
What’s the real point of baking a pie and cooking the entire Thanksgiving feast? It’s sharing it with the people who are important to you.
One thing some people regret on their deathbed is not spending enough time with the people they love. So, whether it’s sitting together at the same table or taking a phone call while on vacation, prioritize who is important to you and how you spend your time.
The real trick to financial success is planning how you will spend your time as well as how you will spend and allocate your money.
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