12 Financial Planning Quotes for Building Wealth Wisely
Quick question, reader: are you worried that you're not making the most of your money? If the answer is yes, it sounds like you need a financial plan.
First things first: what is a financial plan? This is a plan that details:
Your financial situation
Strategies to achieve said goals
If there's a downside to financial planning, it's that it often requires you to make mistakes to learn what works. Fortunately, there's another way: listening to the wisdom of those who have already made those mistakes.
Looking to harvest the fruits of that wisdom? Here are 12 financial planning quotes that will help you build wealth and reach your goals!
1. "The price of anything is the amount of life you exchange for it."
Author: Henry David Thoreau, poet and philosopher
When our pockets are flush with credit cards, we often feel inclined to spend freely. Still, if you keep finding yourself spending on things you don't need, you may need to tweak your thinking a bit.
Thoreau's financial wisdom sayings can be a great motivation in this regard. For example, let's say you're working a 40-hour week and earning $50,000 a year. Do the math and this comes out to about $24 per hour.
Now imagine you want to buy a $168 jacket. Using the above formula, this means the jacket is worth seven hours of your life. Only you will be able to say whether this is too big a drain on your finances.
2. "When buying shares, ask yourself, would you buy the whole company?"
Author: Rene Rivkin, investor
A lot of people think of stocks as lottery tickets. However, these investments don't plunge or soar in value at random. As the name implies, buying company stocks means you'll gain a stake in the company itself.
This is why you should always look at the underlying company before buying shares of their stock. Would you be willing to buy the whole company if you had the means? If not, a long-term investment may not make sense.
3. "A rich man is nothing but a poor man with money."
Author: W.C. Fields, comedian and actor
When we need wealth management inspiration, we don't often turn to comedians. On top of being one of the funniest men alive, however, W.C. Fields also said some prescient things about finance.
This particular Fields quote means you shouldn't put rich people on a pedestal. If you think of them as superior, you're only hurting yourself. It's a perfect excuse not to work hard and achieve ambitious goals.
Of course, not glorifying someone doesn't mean you can't respect them. Just ensure you do it with a clear head. Find out how they got to be where they are and you may discover some important financial lessons.
4. "An investment in knowledge pays the best interest."
Author: Benjamin Franklin, inventor and scientist
There are many things you can invest in, and the best ones are all but guaranteed to net a profit. Some examples include:
Stocks
Bonds
Real estate
Certificates of deposit (CDs)
However, the very best investment you can make is in yourself. The more you learn about investments, the better your portfolio will perform. Every new degree and certification in your industry will help you advance faster.
Reading broadly may also help you learn about different fields of work that may appeal more to you. If you decide to risk it (see quote #9) and switch careers, you may be rewarded with a more satisfying life.
5. "Every time you borrow money, you're robbing your future self."
Author: Nathan W. Morris, finance expert
As far as budgeting motivation quotes go, Nathan W. Morris has plenty to say. This particular quote is about managing debt. If you don't manage it well, you'll end up paying a lot more in interest than you borrowed.
Now, some debt (like a mortgage) comes with unavoidable interest. Your credit card debt doesn't fit in this category. See how much interest you're paying per year and think about how much this hurts your financial goals.
6. "The individual investor should act consistently as an investor and not as a speculator."
Author: Ben Graham, investor and economist
This quote marks a key difference between an investor and a speculator. Investors have long-term goals, so they focus on steady gains. Their portfolios tend to be full of companies with great track records.
A speculator, on the other hand, will try to make quick profits based on market trends. This usually involves high-risk trading strategies. As a result, this approach relies more on luck and timing than long-term analysis.
Though the speculative approach can work, it requires more risk tolerance than most investors have. If you're not an investment expert, you're better off making rational decisions to build wealth consistently.
7. "The stock market is designed to transfer money from the active to the patient."
Author: Warren Buffett, legendary investor
When it comes to investment advice quotes, Warren Buffett is a gold mine. The above saying is a great example of his approach. He also famously said that he wouldn't mind if the stock market was only open once a year.
For proof, look no further than his investment history. Here are some things Buffett bought or invested in early on and still owns today:
See's Candies (1972)
GEICO (1976)
American Express shares (1964)
Coca-Cola shares (1988)
Thanks in large part to his patience, Buffett is worth $143 billion. This approach also allows him to avoid short-term capital gains tax rates. These rates are often higher than any rates for long-term gains.
8. "Too many people spend money they earned to buy things they don't want to impress people they don't like."
Author: Will Rogers, vaudeville performer
Many young people believe they can impress someone by spending enough money. This approach rarely works. Even when it does, it makes it more likely that you'll be surrounded by people who only want your money.
The point of the above quote is to only spend money on things you need or inherently like. Don't waste your hard-earned cash to buy things that would only be valuable to you because other people say they are.
9. "The biggest risk of all is not taking one."
Author: Mellody Hobson, businesswoman
Mellody Hobson, president of Ariel Investments, uses this quote to present opportunities in a new light. Every opportunity in life comes with some risk. By avoiding risk, you may miss out on rewarding experiences.
This saying also touches on the concept of "what if?" Worrying about what could happen is often more burdensome than the result of taking a risk. Put another way, it's better to try and fail than not try at all.
Broadly speaking, the quote highlights the importance of calculated risks. Most financial goals involve uncertainty. Accomplishing them means finding the right balance between enthusiasm and caution.
10. "It's not how much money you make, but how much you keep, how hard it works for you, and how many generations you keep it for."
Author: Robert Kiyosaki, businessman
This quote tells us that a high income doesn't have to lead to building wealth. It emphasizes that this process is more about resource management. To keep a positive cash flow, you'll need to make smart budgeting decisions.
Kiyosaki also mentions the importance of generational wealth. This involves accumulating enough wealth that you can pass it on to your children. It encourages a long-term perspective on financial planning.
11. "If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed."
Author: Edmund Burke, philosopher and statesman
In modern parlance, this means "More money, more problems." The thing is, it doesn't have to be that way. If you do your best to "command" your wealth, it may not create unnecessary expenses.
The main thing we're talking about here is a pattern called lifestyle creep. People affected by lifestyle creep make more money than they used to, but they still can't save. This often happens because they:
Buy stuff they don't need
Sink a lot of money into hobbies
Get food delivered too often
Have too many subscriptions
One of the best money management tips we can give you is to deal with lifestyle creep ASAP. Don't pour more money into your lifestyle expenses until your annual income can support them.
12. "Never spend your money before you have earned it."
Author: Thomas Jefferson, third U.S. president
This saying comes in many forms, such as "Don't count your chickens before they hatch." Still, Jefferson's version is pleasantly direct. It means you shouldn't assume that things going well will keep going well in the future.
A good lesson to take from this quote is to make your financial plans more conservative. Always make plans in case the good times don't last. Don't live in a state of constant panic, but don't keep your head in the clouds either.
Use These Financial Planning Quotes for Motivation!
Understanding these financial planning quotes is the first step towards a positive lifestyle. Still, motivational quotes can only help so much. For personalized financial advice, it's best to contact a financial advisor.
At Phillip James Financial, we offer financial advice to all Minnesota residents. We provide a high-value, high-touch service that doesn't involve selling financial products. Our fees are as low as 0.50% -- contact us to learn more!