Know what you don’t know

It takes a while to figure out the things you don’t know. If we’re lucky, we learn them by observing other people and go into our first experience well prepared. If we are not very lucky, we learn the hard way by making stupid costly mistakes. But those mistakes don’t need to be repeated. We just need to do better going forward and I bet that once your ignorance starts costing you some money, you’ll remember the rules just fine.

Here are somethings I didn’t know, wish I knew and now know:

1) When you’re allowed to deduct your mortgage interest from your taxes, that also includes any points and prepaid interests you paid for the year you bought the property. Not just your subsequent monthly payments.

2) You can negotiate everything with any vendor. Not just the local mom & pop’s.

3) YOu don’t need the extended warranty. The only thing that usually breaks is always the one thing they don’t cover.

4) Insurance preys on our worst frears. Be well insured but be insured to your financial capabilities. You will be grateful for insurance when things go wrong, and trust me they will. However, they go wrong rarely (unless you’re very unlucky), so f you have more than 6 months worth of living expenses, don’t pay more per month on a $300-500 deductible if the $1,000 deductible won’t put you in the poor house. You can afford the deductible and the extra payment to the insurance company can be put to better use.

5) If no one depends on you for their livelihood, don’t buy excessive life insurance. Have enough for your family to settle your estate. A single childless person whose parents are self-sufficient doesn’t need $1 million in coverage. Who are you leaving that money for?

6) Be consistent. It is the key to success. Nothing you will ever do in life will happen instantly. Be consistent and be patient. Results take time.

7) Pick your battles. Not every war is worth fight and some wars have repercussions that last for years. The world is a big place but in networking circles, it’s microscopic.

8) Nothing lasts forever. In good times, prepare for rainy days and in bad times know that it is only temporary. I’ve been through some really tough personal times but I pushed ahead because I knew things would get better. At the same time, I’ve spent all my years since college “stacking chips for rainy days”. While I can’t control everything that happens to me personally, I can control my financial situation through adequate insurance, increasing income, saving and planning ahead.

What wisdom have your years brought you?

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