Investing is hard. Knowing what to buy and when to buy is a decision we get wrong on a regular basis. Knowing when to sell is even more difficult. Our industry has a certain mystique around the management of investible assets because of this. Even seasoned professionals with lots of brain power and computing power get humbled by the market on the regular.

 

            Financial Planning on the other hand is easy. Take income, subtract expenses, grow the rest at x% per year and voila! You’re set.

 

            The reality is that it’s not that easy. Heck it’s not even easy. The most straight forward plan is going to have all kinds of variables that will impact the end result. Do you get a new job? Do you have a family or not? What happens if your spouse becomes disabled? These are really important questions that NO ONE can predict.

 

            I have done countless plans and projections for my clients and I have learned there is one rather simple rule for long term financial success:

 

                                    Spend less than you earn, save the rest

 

            Yeah, I said it. The cat’s out of the bag on the big secret of planning. Time to shut down the industry and become a bitcoin miner. {Editor’s Note: Please do not do this - Sam needs to eat and lacks more than simple understanding of Coding language]

 

            How can such a simple thing be the one key to success? Well first, it’s simple. Simplicity beats complexity 99 times out of 100. Simple is easy to follow. Simple is starting early and letting time be your friend.

 

            Saving doesn’t seem simple when you are living day to day so make it simple and automate your saving. That one simple step will have more of an impact on your long term financial health than almost anything else. Whether your investments grow 4%, 6% or 10% means absolutely nothing if you are not spending less than you earn now.