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Three rules on the path to financial success

You can find financial advice everywhere — TV, the internet, friends, and family. It’s all over the place. Some of it’s good; most of it’s not. And to make matters more confusing, most advice is situation-dependent. Your neighbor’s perfect financial plan may turn out to be a disaster for you.

Why? Because everyone’s situation is unique. We all have different circumstances, different goals, and different resources to achieve those goals. There is no one-size-fits-all plan. However, there are some foundational principles that anyone can follow to set themselves up for a confident financial future. If you follow these three rules, you are heading on the right path, working towards financial success.


1. Live Below Your Means

Seems like common sense, right? Well, you’d be surprised. The culture we live in teaches us from a young age that bigger is better. We need to buy the best, most expensive things we can afford (or that our loans can afford). The biggest house, the newest car, the coolest toys. As great as this sounds, it’s a horrible way to build wealth. My advice? Do the opposite of everyone else. No matter what your income is, challenge yourself to live on as little as possible. Then move on to No. 2.


2. Save and Invest Aggressively

So, you’ve decided to be smart and buy the smaller house, drive the used car and forego the fancy jet ski. Way to go! Now for the fun part. While everyone is out trying desperately to pay off their maxed-out credit cards each month, you’re going to start building some real wealth. With your expenses minimized, you’ll have a solid cash flow and can start investing in assets. These assets — whether they be stocks, bonds, real estate or businesses — become your employees. These employees are going to go out and work for you day after day to help work toward making you even more money. And the more money you may earn, the more “employees” you could buy, which could possibly lead to an even greater cash flow. See how things can start to snowball here? But remember, none of this is possible if you skip No. 1.


3. Allocate Your Investments Appropriately

Here’s where you might run into challenges. You understand you need to live below your means to have a positive cash flow. And you understand that you should use this positive cash flow to invest in assets (your personal team of “employees”) to put your money to work for you. But what exactly are you supposed to invest in? I’m afraid I can’t offer you a simple, catch-all answer. It really depends on your age, income and goals. Many different allocation models exist. It’s your job to figure out which one is best suited for your specific situation.


Next Steps

So there you have it — my three rules for financial success. They seem logical enough, right? The challenge is knowing how to best apply them to your unique circumstances. Fortunately, you don’t have to do it alone. A financial advisor can help you put together a personalized road map to achieve your financial goals while avoiding common pitfalls.

Lisa Strohm is the founder and CEO of The Athena Network and Good Life Advisors of the Lehigh Valley, fee-based wealth management firms. She can be reached at or 484-224-3439.

Investment advice and financial planning offered through Good Life Advisors LLC, a registered investment advisor. Good Life and The Athena Network are separate entities.

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