Key 1: Invest in yourself
Your own earning power -- rooted in your education and job skills -- is the most valuable asset you'll ever own, and it can't be wiped out in a market crash. Keep your earning power growing through continuous education, training and personal development. If you work in a field prone to periodic layoffs or falling earnings, think about a career change, especially if there's something else you've always dreamed of doing. This is great advice, did you ever meet a person that is in there 50s and you think man what a dinosaur. Or for that matter someone in their 30s that is just a complete neanderthal. You know the person that never heard of an iPod or Palmpilot. They seem completely computer illiterate in a computer age world. Take a course, get a hobby that helps you keep up on things. Read the latest management books in your field, subscribe to a trade journal. The world changes fast and you need to work hard to keep up on the changes. Additionally, there is absolutely nothing wrong with studying the classic business books either, a lot of ideas are timeless but you need to apply them to your work and your situation. As Zig Ziglar says, "help enough other people get what they want and you will be rewarded by getting what you want." It is always important to go the extra mile and having the right skills will help you go the extra mile with less effort. Don't be afraid to ask you boss, your peers, and your bosses peers for advice. Try to find a mentor inside your company to coach you. One of your bosses peers might not be a bad idea. Develop the relationship slowly and make sure you have confidence in what you are telling the person.
Key 2: Protect yourself and your loved ones
Before you acquire any financial assets, make sure you have enough insurance against life's big risks -- serious illness, disability and early death. Most people, young families in particular, are woefully under insured, especially for disability. When an emergency arises, you and your family will never regret having "wasted" all those annual premiums on insurance you "don't need." (Learn how to build your financial emergency kit.) I don't like having to pay for life insurance, long term disability, house insurance, car insurance, etc. No one does. But I do sleep a lot better knowing that if I was to die my family would be taken care of. Or if I was disabled I have long term disability (LTD) to pay me 2/3rds of my salary. It really would be a tragedy to skip the $40 a month payment for LTD and then if something happened I would really feel stupid. If you work for a company that doesn't have this type of insurance look for other options like buying insurance through an outside company or and association. The key to keeping it affordable it increasing your deductible. The higher the deductible the less the premium in most cases.
Key 3: Borrow sparingly
Use credit only to purchase things of lasting value: a home, education, maybe a car. Pay cash for everything else such as clothing, travel, entertainment and furniture. Even better, take advantage of the credit card company's free 30-day loan by charging responsibly and paying off the bill in full every month. Do you know anyone who got into big financial trouble because they didn't borrow enough money? I don't. This is a popular topic and one of the questions that I answer most frequently. You need to pay your debts off and like the article said only use debt for things of lasting value. Think about using special savings account to save for things like Christmas bills, vacations, or that big screen TV. We have 2 special savings accounts that we use, one to pay for Christmas bills and the other to pay our property taxes. I got tired of these 2 bills every year, Christmas bills comes in January and the taxes comes in February. Now we just transfer the money from our special savings account. Make sure if you are using a credit card the you only use ones that are free with no annual fee, has as low as possible interest rate, and better yet pays you back with cash back like the Discover card.
Key 4: Pay yourself first
Key 5: Don't go for the home run
Key 6: Diversify, diversify, diversify
Key 7: Live simply today for a more comfortable tomorrow
Deferred gratification is no fun, but it's the only way I know to fund your long-term goals -- college for your kids or grandkids, that vacation home you've always wanted, early retirement, a generous bequest to your alma mater. Take a close look at your current lifestyle, and if you see a lot of spending that is dispensable, consider it found money for the bigger dreams in your life (see The Invisible Rich). This rule applies even more if you are living beyond your means. If you are saving for your kids college, funding your 401k, and have built up a rainy day fun, feel free to go on the $4000 vacation, or buy the extra fun car. But if you are suffering from credit car debt and don't have any savings. You might want to think about rolling the spending back.
Key 8: Give generously to create a better world