HW "SKIP" WELDON, CHFC, CLU

Telephone: 803/782-1145
Email: hww@ix.netcom.com

Web: www.SkipWeldon.com

MONEY: THE RULES

1. LIVE WITHIN YOUR MEANS.

Financial security comes from spending less than our income, then saving that difference regularly. The rest is window dressing.

2. EVERY DECISION HAS CONSEQUENCES.

Our present situation is the cumulative result of all our previous decisions.

3. IT MAY BE BETTER TO MOVE.

Before renovating your home, think about the people who will buy it from you and remember that buyers who want a $100,000 home don't want it in a $75,000 neighborhood.

4. NO INVESTMENT IS FREE. OR RISK-FREE.

5. PAY OFF DEBTS FIRST.

Saving while in debt only works if our investments earn more each month than what we pay out in debt. Before deciding, see Rule #10.

6. TAX DEDUCTIONS ARE A BUNCH OF BALONEY.

In the 28% tax bracket, $1 paid to a tax deduction saves $.28 in tax. Now say this aloud: "I paid a dollar to save $.28."

7. PAY CASH.

Using our money costs us the interest it could have earned. Nobody will lend us their money at that price.

8. LENDERS SELL DEBT.

The fact that we can borrow enough for our dream home does not automatically mean that we can afford it. Ultimately the real cost of home ownership is the maintenance - plumbers, roofers, electricians, heating a/c, yard, painters, etc.

9. WILL PROPERTY, GIVE CASH.

If a living person gives us something that has increased in value, they also give us their tax problem when we sell it. But if they leave it to us in their Will, the problem vanishes.

10. INVESTING IS OVERRATED.

After reducing the historic long-term return (10%) by historic inflation, investment expenses and taxes, the net-net is around 3.5% yearly. For most of us, there’s not enough time for that modest return to matter. Financial security comes from *how much* we save, not where we save.

11. DON'T INVEST OR DO BUSINESS WITH FAMILY OR FRIENDS.

Inserting money into a relationship changes the relationship.

12. KEEP IT SIMPLE.

Personal finance is based on common sense and is very simple. It only becomes complicated when we attempt to justify the wrong decision.

13. AVOID ANYTHING IRREVOCABLE.

The combination of lengthening life spans and raging healthcare costs should make explanations unnecessary.

14. CLEAN UP YOUR OWN MESS.

Streamline your accounts. Choose your retirement home before it’s necessary. And if you are thinking of leaving property to your children as a group, consider Rule # 11.

15. WHERE ARE ALL THE OLD INVESTMENT GURUS?

The ability to beat the market is a short-term phenomenon.

16. LESS MONEY BUYS LESS STUFF.

If we wish the same standard of living after retirement, it takes the same amount of spending money as it did before retirement.

17. THERE IS AN EXCEPTION TO EVERY RULE.

But only short-term. And it’s probably not you, anyway.

H.W. "Skip" Weldon is a fee-only financial consultant. With over 35 years of experience in this field, he provides advice on issues dealing with personal finance, investing, estate planning, money management, tax reduction and retirement income planning.