I’ve never agreed with the saying, “look after the pennies and the pounds will look after themselves”. My advice is to do the exact opposite – focus on the big decisions and don’t sweat the small stuff. In life we face no more than a handful of really big money decisions and these are the “pounds” that need care and attention. These financial life-changing events revolve around your choice of job, your marriage/kids situation, your house/mortgage decision, and your investment approach. These are the four big decisions that will determine your lifelong financial wellbeing.

Your Job

We know of course that our theoretical lifetime earnings, aka our ‘‘human capital’’ can be significantly boosted by education before being converted, via employment, into our “financial capital”. Therefore, the career we ‘choose’ is a huge determinant of how much wealth we accumulate in our lifetimes.

Your Family

Although not necessarily financial decisions, there’s no doubt that the extent to which your parents have passed on money to you and the partner you ‘choose’ are major wealth determinants, not to mention the decision to have, or not have, children.

Your Home

I’m a firm believer in owning your own home as it is clearly proven to be one of the best financial decisions you can make in your life because it provides (1) a great foundation for financial stability, (2) leveraged ownership of an inflationary asset, and (3) no tax on usually solid long term capital gains.

Your Investments

Aside from your home, what you do with your “financial capital” is my fourth and final big financial decision of your life. The bigger your income surplus, and the better you invest that surplus, is key to who much your capital grows. For me this means, above all, maximising tax relieved pension contributions and maximising sustained stock market exposure.


If you like this article, try this one: Planning for Life

Do you need help with your pensions and investments?

Call me on 01 276 0006 or 086 850 8577 or email me at fonz@moneysmart.ie