My dad gave me a great piece of financial advice when I was 18 that I didn’t listen to at the time but I’ve never forgotten.
I was looking to buy a nice car with borrowed money. He told me, ‘only accumulate good debt.’ He explained to me the difference of appreciating assets like property and encouraged me not to borrow for cars or ‘toys’.
Well at the time I didn’t think he knew what he was talking about so sure enough I ended up borrowing for a car and boat. Both of these purchases cost me much more than anticipated. What actually saved me at the time was he had pushed me to first put money into a unit which had accumulated enough equity to save me when the costs spiraled out of control.
Well, today I am the branch principal and wealth manager with Yellow Brick Road, Niddrie based in the busy area in the western suburbs of Melbourne, and I still haven’t forgotten that advice.
Going through this whole experience changed me and now I live my own life avoiding any bad debts and focusing on appreciating assets. I’d advise anyone to stop buying toys and look at ways to wisely invest your money through property or stocks.
The key to wealth is to spend less than you earn and to borrow less than you can afford to.