Whenever we get the chance, we look to answer specific questions from our listeners. Join us this week as we dive into the 3 best money moves made by our hosts.
Budgeting – Andrew
As the saying goes – a penny saved is a penny earned. Although the concept of budgeting seems like a simple one that everyone should be doing, it is often neglected when people see something they really like. Host Andrew Baxter notes that his upbringing and some of the lessons taught to him by his father really cemented the importance of budgeting as not only a way to save your money, but to also get ahead. If you save it, then you put yourself in a position to know what to do with the extra cash but if you spend it and don’t have the money there you simply can not get it working for you.
In essence, the important thing about budgeting is saving something to invest to continue to grow your wealth. From when he was about 13 years old, Andrew would always try to save what he earned and still does.
Setting goals is a topic we have discussed a few times on this podcast and it applies here once again. Mitch notes that when it comes to his finances, setting goals has been an invaluable tool along the way. In the early stages, it may feel like setting specific goals is not worthwhile due to the perceived small numbers on the page. As your career and financial situation improves and you consistently see results from goal setting, the numbers will naturally increase. Journaling is a vital part of the process and keeping track of what your aims are is a great way to keep you focused and disciplined in your pursuit.
Andrew’s First Property Lessons
Another lesson Host Andrew Baxter learned from his parents was to only spend and borrow what he could afford. His first property purchase was no different. Despite making good money, the city of London did not have a lot of cheap housing in central areas for first home buyers. As a result, he bought a property in a cheaper area and really tightened up on his spending. All the while, he treated his mortgage like a savings account and worked to overpay it so that he was never owing too much. The area’s prices jumped and although there was an element of luck in that, Andrew’s first property really served him well and put him on course.
Mitch – Structuring
When Mitch was starting out, obviously the focus was to earn more money at work while also making money from his investments. This is a great notion, but there are other things you can do to help. One early piece of advice Andrew offered to Mitch was to structure himself such that he would be able to keep more of what he earned and save on items he had to buy. Postponing setup leads to assets being vulnerable, and damage may already occur by the time you have acquired substantial assets. Setting yourself up properly is a perfect example of when you might want to dig the well before you need the water.
Andrew Baxter’s third best money move was learning to manage risk. His first stock market investment taught him the hard way that managing risk is just as important and finding the upside. Using the lessons from that first mistake enabled him to discover new strategies and methods in the stock market to help him earn some extra income. Plenty of people make money in the stock market, but the hardest part is holding onto what you make. The current market is the perfect example as to why you always need to be mindful of your risk.
When you’re young, there are many other things running through your mind other than money but getting started early is a great way to put you on the right path. Co-Host Mitch notes that being mindful of money and doing the hard yards from an early point in his career now enables him more freedom than some others who were more interested in travelling or partying. Ultimately, some sacrifice now will often give you the ability to do everything you want to do a little bit later – and without the stress of money.