Money Skills 101: Your Simple Three Step Guide to Build Wealth

♫ Let's start at the very beginning, A very good place to start ♫

♫ When you read, you begin with A-B-C; When you sing, you begin with Do-Re-Me ♫

Where Do You Start? Your Personal Finance Roadmap to Financial Freedom

"Where do I start?!"  It's the first question everyone asks when they begin their journey to a better financial life. In the words of Julie Andrews in the film ‘The Sound of Music’, our personal finance journey needs to start at the very beginning.

Grad Rags to Riches is here to provide the knowledge and confidence to achieve your long-term financial goals so that you can live the life you want. This is the simple step-by-step financial education we wish we'd had to help build wealth.

We have put together a Personal Finance Starter Kit consisting of 10 blogs, which you can watch and listen to on YouTube via this linked playlist.

Or you can read the blogs on the website by following the links below in the section titled 'Everything You Need to Know'.

The Grad Rags to Riches 3-Step Strategy

We believe that if you  Fail to Plan, Plan to Fail!

The more money or assets you have in the future, the more opportunities you will have to live your best life. The good news is that it’s not rocket science – it’s not easy, but it is pretty simple!

There are three simple, fundamental steps to take you from ‘Grad Rags to Riches’:

1. SAVE: The Power Lever

Saving is the area you can impose the most control over, making it the most powerful lever you can pull when you’re building wealth.

• Spend less than you earn.

• Set up a simple budget. Know how much income you take home and how much you spend, and on what?

• Pay yourself first, and automate by direct debit as much as possible. Don’t save what’s left over after spending; spend what’s left over after saving.

• Spend intentionally and avoid lifestyle creep.

Start saving and investing as soon as you can and commit to increasing your savings rate regularly. Thanks to the power of compound interest, increasing your savings rate by just £5 per week and investing in a low-cost global index fund of stocks and shares, or put another way, investing in businesses all over the world, like Apple or NVIDIA, will increase your retirement pot by £55,000.

2. PROTECT: Insure Against Disaster

You need to make sure you and your family are protected from potential financial losses. Protecting your family and your wealth means it won't disappear overnight.

• Insuring against disaster takes care of the stuff you can’t control.

• Planning ahead can mitigate the implications of events like dying early or being unable to work due to an accident or illness.

3. INVEST: Harness Compound Interest

Be effective with your investing: keep costs and tax low, and benefit from the magic of compound interest.

• The investment world has changed significantly; everybody now has access to wealth creation tools that only the wealthy had in the past.

• You can now easily invest in all the great companies of the world through a simple, low-cost global index fund.

• Investing effectively means buying a balance of Equities and Bonds in low-cost global index funds, wrapped inside Pensions and ISAs.

• Keep fund charges as low as you can: even small fees make a difference. For example, if you are investing £200 per month into a fund and you can reduce the cost by ½ %, this could add £75,000 to your pension pot.

Do these things, and you are guaranteed success. Not rocket science is it? And yet we are not taught any of this, and because there are so many other pressures on us, it is easy to fail.

Actually, it should be encouraging that it really is this simple - literally anyone can do it. Yes, it is hard if you are on a low income…but it is still possible. It’s not easy, but it is simple.

Everything you need to know

Everything you need to know to put your financial plan in place to become wealthy is contained in the first 10 posts on Grad Rags to Riches and can be accessed via the links:

What is the 50/30/20 budget? 

How to set up a simple budget using the 50/30/20 rule. Spend less than you earn, pay yourself first, and automate.

What is intentional spending? 

Learn how to spend intentionally. Watch out for 'lifestyle creep' and beware trivial, unintentional spending as observed by 'the latte factor' concept.

What is good debt?

Manage debt - good and bad. Set up an emergency fund and be a savvy shopper. Understand your mortgage LTV.

Compound interest 8th wonder of the world 

Understand the power of compound interest. How the value of your money can grow exponentially given enough time.

ISA or Pension? 

Understand the huge benefit of using an ISA, LISA, and pension to boost your returns.

What is protection insurance? 

A basic overview of the types of insurance that can protect you and your family.

Investing terminology 

Investing is made to look complex and dangerous. Understand the jargon and the concept of risk, and you will be able to 'do it yourself'.

K I S S Investing 

How to invest using investment platforms. Keep it simple, don’t be a player and try to time the market. Just buy and hold for long-term gains.

What is The FIRE Movement? 

Being financially independent and not having to work, living off passive income - this is our end goal. Understand how this works using 'The 4% Rule' and work out how much you need to save to achieve this goal.

What is a Personal Financial Plan? 

How to build your financial plan, keeping it short and simple, using 3 key elements: financial goals, budget and savings plan, investment strategy.

Financial success is there for the taking - will you grab hold?

Watch and Listen on YouTube: https://www.youtube.com/@GradRagstoRiches/playlists