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  • Good News Editor

Foundational Financial Wisdom

Updated: May 22, 2023

Whether you inherited wealth or you are working your way to it, the principles are the same. It's all about what you do to keep or grow the money that is in your hands or in some cases, just passing through your hands (this is not good).

If you feel money is just passing through your hands, and you don't know where it is going, read this post carefully, you might find a way to block the leakage (if you are honest with yourself).

Here are 40 basic wisdom to manage money and grow wealth from cradle to the grave. Note that this post was written within the Irish context but the principles are widely applicable.

1. You must have a job or business that provides an income (obviously). From age 16, the door of the labour market is legally opened to everyone who wants to work. Just wake up and go, and whatever it is that you do, do it with joy and purpose.

2. If you can earn more on your current or a new job by upskilling, and/or taking on additional responsibilities, go for it.

3. If you have free time, use it to create additional income streams through side hustling. Potential side hustles include but not limited to the following:

  • remote work e.g. customer service, web design, etc using platforms like Upwork, Fiverr, etc.

  • Ride hailing, delivery services, and other similar gigs.

  • selling physical products online i.e. eBay, Amazon, Etsy, or own an online store on platforms like Shopify, Woo Commerce, etc.

  • selling digital products online e.g. eBooks via Amazon, or online training/courses using platforms like Udemy, Coursera, Skillshare, etc.

  • turning your knowledge and skills into video contents via YouTube, Facebook, TikTok, etc.

  • lifestyle vlogging - if you can afford to share your daily life with the world through social media.

  • Entertainment content creation e.g. comedy skits, movies, news and current affairs, etc.

  • Music streaming - if you have some singing talent, the world is yours. Try the likes of Spotify, YouTube Music, etc.

  • Real Estate - yes, you can buy to let or buy, renovate and sell if you can afford it.

  • Of course, not forgetting traditional jobs like cooking/catering, barbing/hairdressing, childcare, waitering, sales/cashiering, security services, and so on.

Warning: Some side hustles especially the online ones can be very exploitative. You may have to try more than one thing, and spend countless hours over many months (and years) to build enough momentum to be able to monetize your work.

4. Have a budget i.e. spend only what you plan for. If you didn't plan it, then don't spent it.

5. Spend less than you earn. If you spend everything you get, you are living dangerously.

6. Never borrow for consumption. If you haven't earned it, you can't spend it.

7. Don't spend just to accumulate reward points. Don't build up credit card debt because you want to accumulate airline miles. Buy things because you need them. Travel if you need to travel.

8. Your biggest expense is rent/mortgage. Live where you can afford. Financial experts recommend not more than 30% of your gross pay should go to housing expenses.

9. If you are paying high rent in the city, you could save more if you buy your own home further away from the city, or rent in a commuter town far away from the higher rent pressure zones.

10. Don't rent a house for prestige or to show off. If you are already there, downsize or rent a room and enjoy the rent-a-room tax relief. This means the rental income could be tax free.

11. Lock in your savings habit. Open a savings account with no online banking access or ATM card. But remember, you can never grow wealth in a savings account.

12. Are you prepared for the rainy day? Create a buffer or emergency fund. Financial experts believe you should save 3 to 6 months of your fixed monthly living expenses for the rainy day. Believe it or not, it rains a lot.

13. There's value in freedom from debt. Free up your income to do more and stop making the lenders rich. Pay up your loans quickly using the snowball method from the smallest to the biggest.

14. Don't go into investment mode when you are financially shaky or insecure. Invest what you have saved over and above your emergency fund and continue to save as you invest. Remember:

Investment = Income - Expense - Savings

15. Don't plunder your emergency fund to invest. No sane person removes the roofs over their head to go build another house.

16. Never borrow to invest, unless the investment is tangible and the return on investment is greater than the loan interest. Generally, avoid using loan to invest in financial products because it manipulates the flow of money and distorts the financial system.

17. Know that investment is not the exclusive privilege of extremely rich people. START SMALL. One hundred euros a month would be worth a lot if you do it consistently for 5 years through an investment product.

18. Don't be greedy. Avoid get rich quick schemes. Wealth is a creation of good financial habits that are based on discipline and patience.

19. If you ever want to invest online, make sure the online broker is regulated by the central bank in your country and your funds is covered by the deposit guarantee scheme.

20. Don't ever invest in financial products you don't understand. If it's too complex for you to know exactly how the huge returns is generated, then it could be a problem.

21. If the promised mouth-watering return on investment is too good to be true, then it's probably not true. Be careful of being caught in a pyramid (Ponzi) scheme.

22. Always test the waters with money you can afford to lose. Better still, seek financial guidance from experts who are bound by consumer protection laws i.e. investment/wealth managers in your local bank or regulated investment brokers.

23. Don't invest in a brick and mortar business without testing the idea on a smaller scale e.g. use your home and car/van as shop front/warehouse for a while before you dive in fully to rent a business premises.

24. These days, you don't need to enter into a fixed rental agreements to have a business address. Rent office space per hour or per day from your local coworking hub e.g. the Mill Enterprise Hub in Drogheda and similar locations all over the country.

25. Work out a feasibility and viability plan before you start any business. Never get carried away with the temptation of being called MD/CEO. The hubris (pride) does not pay rent or staff salaries and other expenses.

26. If you are buying an existing business, get the experts to value the assets, liabilities, client base, as well as any potential environmental risk. Make sure you are buying a net positive value.

27. If you are retiring, don't invest all your pension pay-out in one business all at once. Diversify and plan for the rainy day.

28. Never invest all your money after retirement hoping you will live on proceeds or profits from the business. Many have made this mistake and didn't live to regret it.

29. If you retire at 65 and live till 90, how much do you think you would need to live a good life? Plan for that now. Your children may be too busy with their own lives to cover the income shortfall for you. It's painful to hear, I know. Accept this reality, embrace it, plan ahead, and you will be much more happier in your old age.

If you have the choice between being a grandpa/grandma that everyone will be worrying about their bills, or the grandpa/grandma that will be able to sponsor birthday parties for the grandchildren, or chip in something towards their college education, which one would you go for? It's up to you.

30. Additional Voluntary (Pension) Contributions (AVC) is a powerful antidote for post-retirement poverty. Use it. You are saving on tax and investing your income tax free at the same time. This is so powerful. Essentially, if you pay tax at say 40%, Revenue is contributing €40 of every €100 you put into your AVC. Talk to your HR about it and switch it on immediately.

31. Buying your own home is achievable. Save aggressively and consistently with a bank or credit union.

32. When it comes to buying a home, two is still better than one. Both couple working and showing a good track record of income, savings and tax payments is very attractive to mortgage lenders.

33. If you are young, use your age advantage on time. A 30 years mortgage you will get at age 30 is cheaper (lower monthly repayments) than a 15 year mortgage that you may get if you wait till age 50.

34. If you are young, it pays to work in Ireland if you plan to buy your first home in the country. You can get tax refund of up to €30k through the Help To Buy (HTB) scheme to support the deposit for your home purchase. Remember, HTB is only available for first time buyers of new build homes who have paid income tax in Ireland in the last 4 tax years.

Note that the current scheme is ending by December 2024.

35. You can also avail of the First Home Scheme (FHS) which is a shared equity scheme to help first time buyers bridge the funding gap in exchange for the FHS taking a percentage ownership in the property purchased. You can get up to 30% of the property purchase price.

Note: You can avail of both HTB and FHS.

36. As a young person saving for a mortgage or perhaps post-graduate studies, ditch the car payments. Rent near public transport routes and your bank account balance will be better for it.

37. Everybody needs life insurance - men, women, boys, and girls. To be smarter, throw in critical illness cover into the policy.

Don't debate it. Don't spiritualise. Be kind to your loved ones. Do the right thing. Call an insurance broker today. The earlier in life you do it, the cheaper the premium over your lifetime.

38. When it's time to go back to your maker, bow out in style. Don't leave any mess behind. It is now possible to plan your own funeral through either upfront arrangements or through funeral insurance.

39. Think about the tax burden of your inheritance on your beneficiaries and talk to experts about it. Make sure your inheritance does not create a burdensome tax liability for your loved ones.

40. A will does not mean you are about to die. It's just a plan to keep things neat, tidy and easy for everyone involved. Talk to the professionals and set it up.

Wrapping up

Money is one of the top causes of divorce and other forms of crises in families. This is mainly due to poor financial literacy and lack of transparency.

Financial literacy is not taught in schools. But it is a critical life-long skill. Continue to seek knowledge on good money management, and make sure to pass the knowledge on to the next generation. Talk about money habits often with your family. Make financial plans with your spouse. Financial transparency is a good way to promote intimacy and build healthy relationships.

At the end of the day, money is a defence (Ecclesiastes 7:12). Like all types of defences, you have to build it intentionally and carefully to stand a chance of getting good cover during an attack, either now or in the future (retirement).


This post is a voluntary community service initiative of the Good News Blog. For further guidance on any of the subjects raised, please seek professional advise.

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