The best time to start saving for your retirement is the day you get your first paycheck. The next best time is right now.
I knew about the saying when I started out my professional rugby career, but I didn’t fully understand it. Now, at the end of my rugby career, and looking back at the mistakes I made financially if I had fully understood it all those years ago, I believe would have been in a much stronger financial position today.
I was young and riding the wave of the good life, earning very decent money for a 25-year-old. And thinking it was going to go on forever...
In today’s financial climate, where a lot of us are living from paycheck to paycheck and with costs constantly increasing, trying to save is becoming a challenge.
But, developing a habit of saving from the time you start earning that first paycheck can only be good for your future self. An easy principle, but one that most people get wrong. As my career started to take off and my salary increased, I also increased my standard of living despite not really needing to. I was young and riding the wave of the good life, earning very decent money for a 25-year-old. And thinking it was going to go on forever.
I bought a four-bedroom house even though I was living on my own. And the house would have been a worthwhile investment, had I been determined to pay it off as quickly as possible instead of paying the much more expensive bond repayments. I didn’t believe it was necessary to have a budget because there was always enough money in the bank. Eating out almost became a daily routine and sometimes even twice or three times daily.
I was putting a small percentage of my income into a retirement annuity – but I later learned that this is definitely not the best savings tool for a professional sportsman with a short-term career and now I am stuck paying it until at least the age of 55, despite now having to focus my financial needs in another direction during a transition phase in my career. I was looking at making a few investments here and there, but I definitely wasn’t saving in a way in which I could retire once my brief professional sporting career was over.
If you buy things that you do not need, soon you will have to sell things that you do need.
We all want to ‘keep up with the Joneses’ and stay trendy. But, constantly buying things that you don’t need not only relinquishes you of your hard-earned money, it makes you regret it later when you get to a situation when you actually need that money.
I didn’t believe it was necessary to have a budget because there was always enough money in the bank...
Don’t try to adapt your lifestyle by maxing out your credit cards to get that new handbag – or if you’re like me trying to get your hands on those limited-edition, overly expensive sneakers.
I’m not saying don’t spoil yourself or your loved ones if you can. But, if those spoils come at a cost of having to go into debt, think long and hard about it.
Will your future self will be happy about the decisions you’re currently making?
Get an opinion, and then a second and then a third and then think long and hard about all three.
I can’t claim to be a financial guru of any sorts, though I’d like to believe that I think I know a fair bit about finances.
Getting advice from various sources and not just one not only gives you more food for thought when needing to make an informed decision but also lets you hear different ideas and methodologies about money, finances and savings.
Trust nobody with your money!
I think that this is by far the most important advice I would give my younger self if I had the opportunity.
Obviously as professional athletes, we are probably bigger targets for the unscrupulous opportunists out there because they believe there are bigger sums of money more readily available and because sportsmen and women aren’t always financially knowledgeable, they possibly are also a bit naïve when it comes to finances.
But, when it comes to finances and money, there are people lurking everywhere looking to part you and your money.
I’ve been in the unfortunate position of losing money to someone that I believed I could trust with my life. So, whether it’s family, lifelong friends, the love of your life or just a smooth-talking broker that promises you massive returns within the shortest space of time, be cautious.
Be prepared to stay on top of your finances. If that means accounting for every single cent, once a day, once a week, once a month – do it.
Make sure that you know what you are spending your money on, where you have invested your money and what those investments are doing. Are they growing? How liquid are those investments?
Never assume that somebody else will look after your money better than you can.
Get money smart. You’re never too old to learn.
This is one of my favourite sayings because it is so easy and it will pay you back year after year.
One of the reasons people struggle financially is because they make uninformed decisions or, more commonly, they make no decision. Financial paralysis is real.
Nobody said investing, tax or personal finance was easy. In fact, it can be mind-numbingly complex. This causes a great deal of people to avoid financial decisions because they lack financial confidence.
You don’t have to be an expert in all things money. Read, ask, explore and research when it comes to becoming money smart. And do it today.
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