I was earning $500,000 a year at 30: Here are the 10 best pieces of advice I can give you about money

 by Cary Carbonaro, Business Insider Contributor Nov. 17, 2015

businesspeople london bankersFlickr / Herry Lawford

After graduating from college, my career moved quickly up the corporate ladder, including eight years on Wall Street.

I worked at JPMorgan Chase, I was a vice president at Citibank, and then a director at Lord Abbett Investments on the e-marketing and e-commerce side.

Every day a new company was going public, and I lived across the street from the New York Stock Exchange.

Every night before a business day, I would hear them setting up some crazy paraphernalia in the Street. There were giveaways on the Street because there was so much “silly” money. Anything with a dot-com got funded or went public.

For example, Pets.com was launched in 1998. In case you don’t know the story, the Pets.compeople spent half of the value of their company on a Super Bowl ad and by 2000 the company was defunct.

I was earning $500,000 a year at age 30, but I felt like I wasn’t making much money because I was in an established industry without big stock options. It was conservative and I was conservative. It didn’t fulfill me. I felt like I wasn’t making a good difference in anyone’s life.

Cary Carbonaro headshot

Courtesy of Cary Carbonaro

So I quit that job, moved to Central Florida and started my own financial advisory business. Everyone thought I was crazy. Who walks away from an amazing job like the one I had?

I had to reinvent myself as an entrepreneur. It took me a long time to build my firm, one client at a time, from scratch. I went from $500,000 income a year to almost zero the next. It challenged me personally, professionally and emotionally.

The beautiful side of the hard work is that I have a much better sense of my purpose in the world. I love being a practicing certified financial planner because it equips me to make a difference in my clients’ lives. I get to help them make all the right moves with money. It is rewarding to watch them achieve the goals we set out together, and I even wrote a book so I could reach a wider range of the population, from the young to the seniors who might not be able to afford a certified financial planner.

Now here are some of the best pieces of advice I can give you about money.

View As: One Page Slides


1. Beware of FREE money

Credit cards are NOT free money. Use them as you would cash, or don’t use them at all. If you use them to stopgap your life, you will never have financial freedom.

Flickr / Alan Levine

2. Simplify budgeting

It’s simple. Know what you have coming in and going out each month. Do you know this? It doesn’t matter if you do it on a napkin or Mint or an app on your phone. This is so simple, yet so important. It is the building block of all financial planning.

3. Know your worth

Assets (what you own) minus liabilities (what you owe) equal net worth. And your net worth does NOT equal your self-worth.

Always remember that.

Thomas Lohnes / Stringer / Getty Images

4. Don’t be afraid

Personal finance is not just about math, and you don’t have to be good at math to learn it. Simplify, learn the basics, and just get started. It is never too late to learn.

The first step is knowledge. You can’t fix what you don’t know. Learning financial literacy is one piece of education that will be well worth your time.

5. Know your credit score

This is important for your entire adult life, and having a good or excellent score can save you hundreds of thousands of dollars.

Flickr / Mads Bødker

6. Teach your family about money

Financial literacy is a life lesson that should be passed down to your children. Learn it, share it, and your entire family will be better off.

7. Inflation hurts

You have to invest to outpace inflation and get growth on your money — otherwise you’re effectively losing money as time goes by. This means don’t hoard cash, and invest for the long term, which is greater than 10 years.

8. Never lie

Don’t lie about money or spending with your partner. Full financial disclosure is a key to a healthy relationship.

9. Plan for your future

Planning for your financial future is way more important than planning for vacations, parties, etc. Are you spending enough time on your financial future? This is a strategic conversation and you might need to hire a professional financial planner.

10. Just start

There are multitudes of free resources to learn the basics, and you can hire a certified financial planner when your situation gets more complex. Find a planner who suits your needs atLetsMakeAPlan.org.

Cary Carbonaro, MBA, CFP, is a managing director of United Capital of New York and New Jersey. See more about Cary and her bestselling book “The Money Queen’s Guide for Women Who Want to Build Wealth and Banish Fear” at MoneyQueenGuide.com.

Did you know you could purchase your Commercial property through a Self-Managed-Superfund?

Investors look to direct property for reliable income

Investing in property is not new to Australian investors. Residential property is something we know and trust and has provided solid returns for many investors. Non-residential property, on the other hand, is less familiar to the average investor, largely because it has been out of reach for smaller investors. But this is changing and it’s well worth looking at the options.

The concept of investing in residential houses and apartments is well understood by most investors and is easily accessed and, in most cases, can be sold in a reasonable timeframe. In Australia, a long run of capital growth in the residential sector has strengthened its appeal, particularly for self managed super funds and individual investors.

Non-residential property such as shopping centres, industrial warehouses and office towers was until recently the sole domain of large super funds and institutional investors.

But commercial property is now becoming more accessible to smaller investors through managed property funds and syndicates. This has broadened the property investment options for individuals and SMSFs and opens up some good opportunities, particularly in the current low interest rate environment.

Why invest in Australian property?

The major categories of commercial direct property include:

These property categories have varying characteristics but there are a number of advantages for investors common to them all, including:

The major attraction of Australian property for investors is the stability of income it provides. Australian commercial property also has a solid track record when compared to the rest of the world, as can be seen in the chart below, which shows the returns from Australian commercial property compared to those from global property over the 10 years to 30 June 2014. While the capital growth component of the income varied, income from rent was very consistent over the 10 years.

Tips On Getting Ahead With Your Finances – New Financial Year Goals

small-business-lending-nov

For most households July 1 dawns with barely a cross on the calendar. But just as January 1 prompts many of us to take a pulse check on our health and resolve to do better, the new financial year is the perfect time to take stock of our fiscal fitness.

Build a budget

It’s easy to lurch from payday to payday and bill to bill in the hope there’s more money coming in than going out. The best way to manage your money and ensure you are not living beyond your means is to set a budget and stick to it.

Building a true budget requires honesty with yourself about how much you actually spend. Consider all of your costs for an entire month – groceries, bills, loan repayments, clothing, coffees, school fees, entertainment and everything in between – and stack them against what you earn. If you find there is little left over or worse, nothing at all, it’s time to cut costs.

Consider expenses you can control versus those you can’t. Loan repayments, school fees, rent or council rates are fixed. But take-aways, movies or a new pair of heels are all at your discretion – and where you can cut back.

Axing one takeaway coffee from your work day can net you nearly $900 a year, while making your own lunch can save more than $1,800. Pare back on impulse purchases and eating out and your annual savings could soar.

Set some goals

Nothing spurs savings like something to look forward to, such as a holiday or even a deposit on a home. Build your savings goal into your budget and set funds aside as soon as you get paid. Better still, have funds debited from your pay into an account you can’t access easily, such as an online savings account.

Pay down debt

The new financial year is the perfect time to assess debt and make a plan to reduce it, starting with those debts with the highest interest. Consumers often make the mistake of paying extra off their home loan while carrying high-interest debt (up to 20 per cent per annum) on their credit card. You will be far better off financially if you clear the high-interest debt first. A $5,000 credit card debt at 17.5 per cent, for example, attracts $850 in interest a year, while the same amount on a 4 per cent per annum home loan costs just $200 in interest. Credit card providers must now outline to customers how long it will take to pay off their debt if they pay just the monthly minimum. Check out the numbers on your next statement and take steps to pay as much off as you can.

Organise your deductibles

Start the new tax year by knowing what you can deduct and sorting your receipts. Australian income-earners are entitled to minimise their tax so find out what you are allowed to deduct in your line of work and keep a record of all relevant receipts, even if it’s just in an envelope or folder. If unsure of what you can claim, visit ato.gov.au or talk to your accountant.

Get savvy with your super

If you are at a point in life where you have extra disposable income, it may be worth socking more into your super. Talk to your tax advisor or accountant about your individual circumstances and how much extra you’re allowed to contribute. Superannuation is reported after the end of each financial year so keep an eye out for your next statement in coming months to see how your retirement fund is faring.

Make sure you are covered

Insurance may be considered a grudge purchase but it could be the difference between financial ruin and getting back on your feet if the worst happens. Check your home and contents policy to ensure you have enough cover to rebuild and replace your possessions in the event of a total loss. Many home owners make the mistake of just taking out enough building cover to repay their mortgage, but the sum insured should cover the cost of rebuilding your home at today’s prices, including any landscaping and fences. Similarly, contents insurance should be sufficient to cover all of your belongings if you have to buy them again as new. If you have an investment property, make sure you have a specific landlords’ policy to cover claims for loss of rent or tenant damage (see our article about managing unruly renters in this edition of Haven), which are not covered on standard home policies.

Mortgage matters

The new financial year is an ideal time to review your mortgage, regardless of how long you have been with your lender. It never hurts to look around at other institutions and their loans to ensure your mortgage is still structured to suit your circumstances. Even 0.5 per cent shaved from a $250,000 loan will save more than $23,000 over 25 years.

Talk to your mortgage broker about your financial goals and circumstances for this financial year so they have enough information to help you determine the right loan for your situation.

* Tax information: the information in this article does not constitute advice. As taxation legislation is complex, we recommend you speak with your financial advisor, tax advisor or contact the ATO for further details and expert advice regarding your personal circumstances.