Article Title: The Formula For Financial Success
(from the Oprah Winfrey Show - Updated)
Submitted by: Craig Lock
Category/Subject: Money, Finance, Financial Success, Money Management, Financial Independence
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"We share what we know, so that you and your money
may grow."


"Money can't buy you happiness. But it helps you to be
miserable in comfort."

"Wealth is better than poverty... if only for financial reasons."
- Woody Allen

"Those who say money can't buy you happiness,
don't know where to shop."
- anon


These thoughts are extracted from Oprah Winfrey's fine show,
which I watch regularly (enough free advertising for her -
she doesn't need it!). I've written this piece in point form
from notes that I've taken - for brevity.

I hope that sharing this information may be helpful to you
along the roadway to financial success...


I believe that anyone can get out of debt. You should have between 3-6 months salary as a reserve fund on which to live before you start investing. Put into an emergency reserve fund - this should be in savings account, rather than the stock market. Check for the penalties when you need to take it out.
The problem is many people give up if they dont have it.
Have a "Money diet", like a food diet. It's the way you CHOOSE to deal with money. See it as a means to an end, rather than an end in itself - it's just a commodity, a tool to help you meet your personal goals. Most of us are headed for financial trouble; because at least 3/4 of people are not saving nearly enough.

First, FIND OUT HOW MUCH YOU OWE. Do a budget of spending and saving. Become financially fit - watch how much you are spending. Don't use life assurance as kids education savings plans - rather use unit trusts (or managed funds).

The biggest mistake most people make is thinking that they do not have enough money left to invest. "You don't have enough not to."

PAY YOURSELF FIRST. Send yourself a bill, say 10 of your income each pay day. Make it one that you have to pay first - so you don't miss it. Write out an invoice to yourself for your own savings account: First should be your own retirement plan. At least 10 - you deserve it. Keep it, but don't spend it. This amount can be automatically deducted. Doing this is great for kids after getting their first job. They can have their money taken automatically out of a cheque into a savings account.

Wealth, like health and happiness, starts in the MIND. The way you start is vital. That's the way good habits form. It all depends on your underlying beliefs about money.

How to cut your tax bill?:

Unit trusts (or managed funds) are great to grow money quickly and also to build over time. Expect a 10 pa return over a long period.

HAVE A LIFE PLAN: A will, adequate insurance, etc. Strive for good financial health. "Don't forget the trees for the forest." Your retirement funding should come before your kids education (college). (Don't know whether I agree with that statement on the Oprah show!). But it is is best to work on both goals at the same time. Make your money work for you. "Money goes where it is treated best." The stock market is a roller coaster ride - it's hard to project your financial needs/requirements into the future. "How much are we going to need in the future?"

Asset management: Studies show that you need money both in the stock market and Fixed Interest investments. Make it a priority to own your own home - that is a great compulsory savings plan (instead of paying rent).

Consolidate your bills into one loan, if you can get a lower interest loan....but most importantly, don't spend the savings.

Don't touch your money, except for dire emergencies.

Pension transfers (or what are termed "roll overs"):

If you leave a company, get the firm to transfer your pension fund directly - this is called a "trustee transfer". Try to get your employer to match your own contributions.

Pick out the area of your life causing the most trouble to you: Most common are:
* entertaining
* eating out
* clothing, and
* kids.
All - then you've got some big money problems, like me!

Try to cut back where you can. Look for similar plans to save money: eg medical and insurance. It may be you don't need that big car, Reebok sneakers for the kids, designer clothes, etc.

Pay yourself on time. Remember we treat our creditors better than we usually treat ourselves.

N.B: PAY YOURSELF FIRST from your pay-packet.

Follow these money management hints and you are sure to be well on the way to financial security and even prosperity.

Good luck* and be happy

Craig Lock (Eagle Productions)

* "luck", as they say, is where preparedness (is there such a word?) meets opportunity.

About the Author: Craig has worked for "many moons" in the financial services industry (in the days when he had a "proper job")...before becoming a writer. He has studied and written extensively on money matters: articles, brochures for financial institutions and books.


Don't worry about the world ending today...
as it's already tomorrow in little scenic and tranquil New Zealand

Author's Bio: 

Craig has worked for "many moons" in the financial services industry (in the days when he had a "proper job")...before becoming a writer. He has studied and written extensively on money matters: articles, brochures for financial institutions and books.