Hi,

The following is written in a deadly serious manner with tongue firmly in cheek! If you decide to read through it YOU decide which is serious and which is not! I would imagine that your interpretation and hence judgement, will be determined by where you're coming from and where you're at!
Apologies in advance if I'm going over much covered ground with some of my points. I'm new to this board and still feeling my way around! Anyway, see what you make of this, my recipe to lead to Financial Heaven:-

1) Co-habit or better still get married! Two really can live as cheaply as one.
2) Never get divorced! The financial implications are horrendous.
3) Don't have kids! 'Nuff said.
4) If you do have kids, invest child allowances from infancy to maturity in a general investment trust or index tracking unit trust. Chances are you won't miss it on a weekly basis and your kids (assumming the fund is left fully invested) will be rich on their retirement.
5) SAVE! Preferably by a regular standing order or direct debit method. Pretty soon you treat this like a bill--a great discipline! Always reinvest the interest or dividends. Einstein reckoned that mankinds greatest discovery was COMPOUND INTEREST. Make it work for you as soon as you can!
6) Don't scrimp! Saving doesn't mean all or nothing. Be generous with friends and family and your favourite charity(s). Generosity has a habit of paying you back! thrice over!
7) Don't play the lottery! and try to avoid other forms of gambling. Set up an investment trust monthly subscription instead.
8) Always treat INSURANCE with the scepticism it deserves. Remember, if you take out all the insurances that FEAR provokes, you could end up working just to pay your premiums! Do you really NEED cover for:- the telly,video, washer, car breakdown assistance, Private health care, unemployment insurance, credit payment protection (see later) etc. etc. Consider instead SELF INSURANCE. Self insurance is the saving up of a private fund, again stock market based, from which to draw should the eventuality arise. If you don't claim (on your own fund!) you get to keep the premiums! Great eh! For those absolutely must insurances ALWAYS ring round at renewal time.(freephone no's provided usually!)
9) Motoring costs. A huge potential for wealth creation or wealth reduction! If you feel the need to project your self image through your motor be aware that the gleaming Beamer or Merc in your garage will cost you dear. If image is unimportant, that ten year old VW golf,reliable and economical, insured third party for £200 with annual servicing and maintenance costs of circa £400 will free up a fortune for investment purposes. ( I've just described MY transport!)
10) Know the difference between NEEDS and WANTS.
You need food,shelter, and clothes you want a new television, Hi Fi, computer etc.
11) Resist the latest FAD. Don't be pressured into aquiring something because you feel you must have it if for no other reason than "everybodies got one". Biggest current example Mobile phones.
12) Never use CREDIT CARDS other than the "Repayment in full every month" method.
13) Take the time to learn about share based investing. If you're reading this you already appreciate this point! Understand also the following, tatoo them on your arm if necessary but REMEMBER THEM:-
a) Brokers make money FROM you not FOR you.
b) So called Experts will take exact opposite positions on any given share. Who do you believe? At the end of the day you'll have to go with your own judgement (which as likely as not will be at least as good as the "experts").
c) The only difference between a Professional and an Amateur is that the Professional gets paid! This fact in no way equates to COMPETANCE!
d) NEVER buy an investment on a TIP!
e) NEVER buy an investment primarily FOR TAX REASONS
f) REMEMBER that share price fluctuation is normal. Expect it! The common failure with individual shareholders is to BUY high and sell LOW. (Herd instinct--greed, fear etc.) Adopt a long term strategy and stick with it! Don't be blown off course by MR. MARKET!
g) REMEMBER that when your EMOTIONS are dictating a certain course of action even more caution is called for. INACTION is sometimes the best course of action to take!
h) Consider extending your knowledge further by familiarising yourself with a working knowledge of Traded Options. You can use options in a SAFE, EASY TO UNDERSTAND way to enhance returns from blue chip shares.
14) EMPLOYEE BENEFITS. If the company you work for offers pension benefits, share option schemes, share purchase schemes, always maximise these benefits to the full. By participating in a "Stock purchase plan" (or whatever other name they give it), you stand to benefit in three ways:-
a) No doubt the company will add "EXTRA" cash to your contribution thereby giving you a head start with your investment.
b) Your shares should increase in value as your company prospers.
c) Your participation in the scheme will be looked on favourably by your employers thus enhancing your career prospects!
15) PROPERTY. If your financial position allows, consider the purchase of property with a view to letting it out. Demographic trends point to a future housing shortage with growing demand for rented accommodation. Study how you might best take advantage of this trend.
16) MORTGAGES. A mortgage is the cheapest form of borrowing available to the average Joe. Make the most of it, but only in ways that will enhance your future wealth ie purchase of a second property. Do not be tempted to increase your mortgage for lifestyle wants ie. that shiner new BEAMER standing in the showroom. This point on mortgages may seem obvious to you dear reader but over 50% of current mortgages paid in this country at present are being paid at the STANDARD VARIABLE RATE. If this is YOU, with so many great deals around at present, I suggest you sort it, TOMORROW! A point worth mentioning here is the very real distinction between DEBT which in its severest forms can lead to ruin, and CONTROLLED BORROWING which conversely, can lead to increased wealth! It is a fact, the morals of which are very questionable, that DEBT attracts the highest, punitive, interest rates whereas BORROWING attracts the the lowest!
17) ENDOWMENTS. If you've got an endowment policy and your company has asked for more cash to make sure the fund pays off your mortgage, think very carefully. You'd be far better off investing any additional cash in an INDEX TRACKER unit trust (TMF would agree here I'm sure!) or a generalist INVESTMENT TRUST. Either drip fed on a monthly basis with dividends reinvested.
18) PENSIONS. Be fully aware that the Welfare State WILL NOT provide you with anything other than a safety net. I know this is probably like teaching my Granny to suck eggs but be aware of the following:-
a) The earlier you start planning and saving for retirement the better.
b) A MIXTURE of methods to provide income is undoubtedly the best ie, Pension or Annuity (albeit low at present), Dividends from shares, income from bonds, returns from property based investments, a paying hobby even. As an example of this latter category, I have a friend who has turned 80 who makes the most delightful wooden boxes and mirrors. He'd never make a living solely at this, but added to his occupational pension it tops it up nicely!
19) Don't smoke!!! This one is so obvious I'm loathe to mention it, but mention it I will 'cos the financial downside (health considerations apart!) is GOBSMACKING. If you smoke PACK IN and, yep you know what I'm going to say:- Invest the proceeds in a monthly based INDEX TRACKER! or suchlike.
20) The very last of my 20 steps to Financial Heaven. What can it be? Why, just what you're doing now you FOOL you.(assumming you've gotten this far that is! That's right logging on and reading THE MOTLEY FOOL. Everything you might want to know is on some board or other (or could be if you ask.) The real key to FINANCIAL HEAVEN however, lies within yourself and will be determined by your own efforts. On that particular voyage I wish you the very best of luck.

Best regards

Jim.