The accumulation of wealth, like so many things in life, is about decision making.  Plain and simply.  Living a financially healthy life is something many doctors will focus on in 2018.  “I make 3 times what my father made and yet I feel like I’m going nowhere!”  This is a common complaint among high earners who see no wealth accumulation.  That is because there is a lack of commitment to certain financial principles that lead to success.  These principles are by no means overnight fixes.  But they do promise a stronger financial future for yourself and your family.

1.       What gets measured gets managed.

Would you like the Super Bowl to be played without a score?  Would you watch the Olympics if the race wasn’t timed?  Would you pay for your son or daughter to take the SAT if they got no score back?  For the important things in life we keep score.  We have to.  Numbers help us make sense of things.  They tell a story.  When one football team scores more points than another they win the game, just like how keeping an accurate record of what your monthly expenses are can help you win your month.  Keeping a journal of expenses is an important life skill to learn.  It cements conscious thought to what otherwise would be mindless purchases.  Do you really need to go out to dinner tonight?  Your journal says you went out last week?  Do you really need that designer bag?  If you delay the purchase you can reach your monthly savings target.  By keeping score you can win the game.

2.      Don’t get fooled by big numbers.

“I’m a doctor.  I work hard.  Of course I can afford a night out on the town!”  But can you really? We all get excited when we see big numbers on the paycheck.  Even though intellectually we understand that taxes, student loans, credit card debt and mortgage payments take huge chucks of that money away.  Emotionally we still feel like we have money to burn.  This is the main reason the savings rate in America is plummeting like a rock.  Wages have historically have never been higher, but saving has never been lower.  It is time to stop getting fooled by the big number of the paycheck.  Just because your paycheck says 10,000 dollars does not mean you should go out and spend 10,000 dollars.

3.       Invest, Invest, Invest.

The retirement age in the United States of America is 65 years old.  The average life expectancy for a man is 78 years old and 80 years old for a woman.  This means that on average a person must live for 15 years without a job.  A simple employer supplied 401K is going to keep you alive, but it won’t keep you in comfort.  In order to truly enjoy your golden years, you must invest.  Retain the services of a financial planner, get retirement planning at your local bank, or invest on your own.  But for Heaven’s sake do something!  Inflation corrodes the value of the dollar every year.  Don’t bury it in the backyard.  Whether it is stocks, bonds, real estate or certificates of deposit do something today that will protect your money tomorrow.

4.      Saving does not equal no fun.

When some people see the word “Savings” they hear “Don’t enjoy the money you worked so hard for, and put it away for some unspecified reason when you can easily enjoy it now.”  What these people do not realize is that Savings does not mean buzzkill.  It means more fun.  Savings creates capital for investment.  It creates opportunities for you to enjoy yourself even more in the future.  Next time you hear the word savings, get excited.  Savings creates more opportunities, more choices, and a greater life for you and your family.

This article is contributed by Mr. Basil Harding, financial planning enthusiast.

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