STOP! No more excuses

[Plex]

I hope after the articles of the past couple of weeks you have come to appreciate that you do have the power to create wealth and put yourself on the road to financial security. I have highlighted how small simple steps can get you started. Thereafter, if you remain consistent you can take advantage of the power of compounding so that after each period you can grow your money at a faster and faster rate.

As with anything in life the road to financial security requires effort and as with anything that requires effort we are quick to find a plethora of excuses. There always seems to be a �but.� All too often I get feedback which says �I have read your article or I agree with what you say, but��

In last week�s article I gave an example using a 23-year-old and showed what could be achieved in five years by engaging in simple low-risk investments using current rates. That prompted a response from a couple of readers which suggested that because they were later on in life it was too late for them to utilise my advice.

Here are some of the excuses most often put forward when dealing with money and finances. See where you might fit in.

1. I am too old. It is too late for me to start.

Do you know for certain what you will be doing after retirement? Do you know when you are going to die? If you are in your 50s now you could very well retire but continue to earn income in your post-retirement years.

In addition, advances in medical science means that your life expectancy can take you well into your 80s. That may mean 15 to 20 years to save and invest and another 10 to 15 years to enjoy the fruits of your labour from age 50. Around this age should also be the time when you are in a position to either save more or be working for more money than at earlier stages of your life.

Even if you are starting late, you may still be staring at a grand opportunity to live the retirement you always wanted but it will never happen if you don�t start at all. The next stock market rally could start later this year, next year or the year after. The point is that during the last one people were able to, in many instances, double their investment in two to three years. However if you are not in the market, you can�t possibly benefit.

Throw this excuse out the window. It�s never too late to start working towards securing your financial future. The choices you make today will affect tomorrow�s outcome. You can�t predict the future so just simply try your best to manage it.

2. This is all too time consuming. I simply don�t have the time to keep on top of all these financial matters.

You don�t have time, I assume because you are working hard to get ahead in life. Ten and 12-hour work days, traffic to and from work, tending to the family�s needs, leisure time is a luxury�there is just too much to do and not enough time to do it. The last thing you would want to do in such circumstances is to file bills, keep a budget, monitor payment dates and keep track of how your investments are performing.

If this is your excuse then answer this: how do you eat a pizza? The answer: one slice at a time.

It�s that simple.

See where you can get your biggest bang for your dollar and start there. You don�t want to pay fees on your credit card so mark the due date and make sure you pay your balance in full.

Once you are in the habit of doing that take a look at your spending and see where you can trim. Keep your investments simple at the start so that you can plan and track what is going on. That way it becomes easier to stay the course. Start with the things that can create the biggest impact. Get into the habit of doing it and move on from there. Pick the low hanging fruit.

It really makes no sense working extra hours in a day in order to get ahead on the job and, as a result, you allow two hours pay each day to slip through your grasp because you did not have the time to tend to your own affairs. The net result of that mindset is that you are in fact working for half of what you think you are working for.

It would be far better to take the time to build that nest egg so that you have two things working for your future dreams: you and your money.

3. None of this is of any use to me because I don�t have enough money to invest.

Do you have on a brand name outfit? How many pieces of jewelry do you ordinarily wear? What about your car, audio and television set? We are often attracted to all the bells and whistles associated with these products but we end up hardly ever using them to the fullest, often because based on the previous excuse we are working too hard and simply don�t have the time.

Why not then instead of spending your money on stuff that you will hardly ever use, save it so that over time you may not have to work as hard. If you defer the spending to your later years, you may then actually have the time to enjoy the features that come with your car or that home entertainment set.

As my last couple of articles have shown, you can always do something differently or give up something that is not necessary to place into the piggy bank. Over time, with the necessary discipline you will move from the piggy bank to the bank savings account, to the money market fund, to the mutual fund and eventually to the stock market.

It may take you longer than some of the people you know, but if you make the effort you will get there.

4. This is too overwhelming; I don�t even know where to start.

Do you currently have short-term debt such as a bank overdraft or outstanding credit card balance? Try to pay this off or refinance to longer term/lower interest rates. Get to the point where you have surplus cash flows. I have already discussed in some detail the steps that you can take to save some of what you earn. Once you have saved a sufficient amount (it all depends on you and your needs) start investing the lump sum and keep adding to it as time goes by.

As best as possible document what you are investing towards and the things that you need to do to get there. In the humdrum of everyday life where we find ourselves tugged in each and every direction sometimes all at once, it is easy to lose focus.

You may have worked extremely hard over the past couple of weeks and need a treat in order to maintain your balance. By all means treat yourself. However, by writing down what you are initially trying to achieve and how you plan to go about doing so you can ensure that one moment of indulgence does not turn into a money-draining spending habit.

The lesson here is simple: when you don�t know where to start always start at the beginning.

5. It�s not a good time to invest. The stock market is falling and I�m afraid I�ll lose my money.

If you take the logic of that argument to other areas of your life you should not be driving because there are accidents on the road. You also should not be out at night because of the number of murders. The reality is that if you have to drive or go out at night you do your best to manage the risks to allow for a positive outcome for yourself.

That in essence is all that is required. It is always a good time to invest. What you invest in and where you invest should really be a factor of how you see the risks associated with your financial environment and the steps taken to manage those risks.

Few among us can boast of a systematic and orderly approach to investing. In fact the opposite is usually true where we place money into instruments in an ad hoc manner often based on the sales agent that has the opportunity to place a product in front of you when you have some money available.

When things don�t work out as planned, we blame the markets and use that as an excuse to do nothing. That�s not an option. If you can�t figure everything out for yourself then engage the services of a reputable financial adviser.

6. I can�t afford to pay for financial advice.

You can afford to pay someone to tend to your car, your hair, or pay for meals or for entertainment but you can�t pay for financial advice. Think again. Choose your adviser carefully and you may find that the price is well worth it. In addition, there are many ways of getting advice without directly paying for it. Your banker or stockbroker may be a good place to start.

No more excuses, right?Ian Narine, managing director of

Republic Securities Ltd, can be contacted via e-mail at [email protected]

Guardian