Advice from the World’s Top Figures in Finance
There are a handful of people in this world who have mastered the realm of finance. These people assert an incredible level of influence over global commerce, oversee trillions in assets, and are individually worth staggering sums of money. It’s easy to call them “lucky” at first thought. However, most of these people arrived at the top due to a combination of their intelligence, hard work and savvy for financial management; “luck” was hardly the only determining factor in their success.
It’s also important to note that many of today’s leaders in global finance learned to master money using their own; of course, it’s not likely that you’ll ever be handed the keys to a bank if you can’t even manage your own personal finances. Fortunately, many of these super accomplished individuals have been willing to share some of the principles they believe have garnered them such amazing success. We’ve compiled some great advice from a few of them that may help you learn to manage your money better.
Jamie Dimon
Jamie Dimon is the CEO and Chairman of JPMorgan Chase, the largest bank in the United States in terms of assets overseen, and has a personal net worth of $1.1 billion. Dimon is best known in the financial world for his strong leadership, and is highly praised for the way he successfully guided JPMorgan Chase through the 2008 financial crisis.
When asked about ways to run a successful business, he’s offered a few pieces of great advice. First, Dimon recommends that you collect thorough data on the strategies you use and then make improvements by studying that data; use facts, not gut feelings, to guide you as you make decisions with your money. Though this advice was geared towards entrepreneurs or those managing large companies, it has a clear application in regards to personal finance too. By tracking your expenses and being aware of where your money is going, you can make improvements by studying exactly where and when you slip up and spend too much. After assessing your results, you should be able to clearly identify the moments, feelings and products that influenced you to fall off track, and develop strategies that will help you avoid making the same mistakes in the future.
Dimon also recommends keeping your eye on the big picture. Don’t let a sudden victory or small setbacks throw you off course – both short-lived spikes and regressions are to be expected on any long-term journey. Keep your eye on your long-term goals. It’s important not to be too hard on yourself when you make mistakes, but you also need to remember that a taste of victory isn’t a cue to stop working.
Abigail Johnson
Abigail Johnson is one of the wealthiest women in the world with a net worth of $15 billion. She’s served as CEO of Fidelity Investments since 2014, when she succeeded her father Edward Johnson III, and became Chairman in 2016. Abigail worked at Fidelity for over 25 years before taking on the top role, and now oversees Fidelity’s pool of assets worth over $2.7 trillion.
Johnson’s first piece of advice is to ”be careful buying assets with borrowed money”. Debt is often categorized as good or bad; good debt is the kind of debt you take on to finance progress in your life (ex. taking out a student loan to go to school), while bad debt is what people take on when they’re funding consumption. Johnson calls too much debt “dangerous and financially toxic”, and stresses that it’ll overwhelm you when the market experiences a sudden downturn. So, be careful if you often use your credit card to cover non-essential expenses like shopping and restaurants. Bad debt can catch up with you quickly, and if the market takes an unexpected turn or your employment situation suddenly changes, it may become significantly more difficult for you to pay it off as planned.
Johnson also emphasizes that from a young age, she was taught to take on an investor’s mindset: that means “have the patience to invest for the long-term”. Don’t let what you perceive to be a short-term gain throw you off of attaining a much more valuable long-term goal. For example, it feels great to have a shiny new car as you drive it off the lot, but it’s well known that your investment decreases in value by roughly 10% the moment you leave the dealer. You could have instead gone for a new but used vehicle and saved the difference towards a child’s RESP or your retirement fund. Much like Dimon, Johnson advocates for making well-planned decisions that are based in empirical data, as these solid choices will help you withstand the next inevitable economic downturn.
Steve Schwarzman
Steve Schwarzman is the founder of Blackpool Investments, the largest buyout firm in the world. Schwarzman has a net worth of $19.1 billion and oversees a pool of assets worth over $545 billion. Through Blackpool, he is considered to be the largest holder of real estate around the world.
Schwarzman has long been vocal about sharing the secrets to his success. One of his great pieces of advice is to “learn to breathe and slow things down”. If you feel pressure from the world to make a choice, you may feel you need to decide quickly. However, that panic you feel is entirely self-manufactured, and may lead you to make poor decisions. Schwarzman says, “you can always say ‘I’d like to think about that a little bit” before jumping to make a choice. In regards to personal finance, you can apply this to impulsiveness and the desire to spend your money on your immediate wants. Learn to slow down and ask yourself, “do I need this? Can I do without it?” You’ll likely find yourself saving more money while developing a more conscious thought process about the way you consume. If you’re looking for more ways to combat impulsiveness as you shop, check out our recent blog post on avoiding the urge to shop online here.
Another great piece of advice from Schwarzman is as follows: “It’s as easy to do something big as it is to do something small, so reach for a fantasy worthy of your pursuit.” Ultimately, set big goals, and don’t be afraid to achieve them! Don’t be dissuaded by the amount of time it’ll take to reach the finish line, or the amount of work you perceive to be involved. Large, long-term goals can always be broken down into small, manageable steps, and are absolutely worth the effort that goes into attaining them. Consider what your long-term financial goals are and work on breaking them down into small sections. What’s your first step?
Finally, Schwarzman said it best when he said, “No one person, however smart, can solve every problem. But an army of smart people talking openly with one another will.” This kind of thinking has an application in all aspects of life, but in particular when it comes to money. Many people have a tough time opening up about their financial situation, but don’t realize how much they can gain from having open, honest conversations about it. So, make a point of chatting with your close friends and family about your triumphs and your struggles with money management. Someone may have a great piece of advice that’ll help you change your habits, or even better, you may have a tip that can really improve someone else’s. At the very least, you’ll likely gain a sense of comfort or reassurance by hearing that the people around you are going through (or have been through) the exact same things. There is power in numbers! Use your network to your advantage and normalize speaking openly about the ups and downs of money management.
Warren Buffett
Finally, no list of important figures in finance is complete without Warren Buffett. Buffett is the most powerful figure in the financial world today. His investment firm, Berkshire Hathaway, is worth over $530 billion and Buffett himself is worth a staggering $73.5 billion. He has long been praised around the world for his knack for selecting excellent long-term investments that have garnered his firm incredibly massive returns (think Coca-Cola and American Express).
Buffett, who made his first investment at age 11, has been known to share many of his secrets to success. One key piece of advice from him is to prioritize saving. He claims, “Don’t save what is left after spending; spend what is left after saving”. This is great advice for all, and you may be putting it into practice already if you’re a QUBER user! You can’t take any steps forward in your relationship with money if you can’t learn to save; investing, financial planning and ultimately, achieving financial security are all steps that come after acquiring some level of savings. So, learn to put away a portion of your paycheck when you receive it (not after you splash out on that new jacket or gadget you’d been lusting after between pay days). You can easily set up your QUBER account to transfer a set portion of your paycheck as soon as it’s deposited in your account by clicking here.
If you find that you’re constantly in a tough spot financially, Buffett’s best advice is to reassess the way you’re living: “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.” What Buffett is saying is to think about your lifestyle and habits and then work actively to make changes where you need to. The reason people often live beyond their means is obvious (it’s comfortable and frankly, often more fun than living within them), but you’re setting yourself up for failure in the long run. You’re not doing yourself any favours “patching holes”; the only way to shift from where you are to where you want to be is to be proactive in improving your financial habits. So, make a budget, save more money or cut your expenses down. Ultimately, do what you need to do to shift your financial situation in a more positive direction.
Lastly, one of Buffett’s best pieces of advice: get started! The old adage is true; “The journey of 1000 miles begins with a single step”. There are always going to be a million excuses as to why you can’t start improving your financial habits today: you don’t have enough money, you have something coming up, or “I’ll do it… tomorrow”. Often times when working on instilling a new habit, the first few days are the hardest. If you’ve ever gotten out of shape and then tried to get active again, you’ll know this well! The same goes for your relationship with your money. If you don’t start taking steps to improve your situation now, you’re putting yourself at a disadvantage and foregoing all the benefits you could have accrued by simply starting today. Whether you have $20 or $2 billion, money is always going to play an integral role in your life, and life is so much better if you make choices that minimize financial stress. If you need help, there are plenty of free resources that will guide you in the right direction. The most important part is that you take the plunge.
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