1. Create a budget.
If this sounds too obvious, I’ll say it again for reinforcement – are you maintaining a budget? Seriously. Miami is one of the flashiest cities in the world. If you don’t have a budget I’ll put it another way — Estas loco? It has been proven that our propensity to spend money in Miami is directly proportional to our physical proximity to Brickell/Downtown Miami and South Beach. A budget is by far the best way to keep track of your money. If you have a budget, you’re already way ahead.
2. Want to build up your credit score fast?
Pay your bills on time. In other words, “Do what you say you’re going to do, Miami.” Your payment history comprises 35% of your credit score. By contrast, your length of credit history accounts for only 15% of your overall score.
3. Time is your biggest asset.
Spend extra time with the people you care for most in life. This is easier said than done in Miami traffic. You’ll need to become good at saying “No” to lesser priorities during non-commuting hours and keep away from Miami’s many distractions.
4. Time value of money.
Investing $100 per month into the stock market, assuming an 8% return, gets you $349,100.78 in 40 years. Invest $250 per month with these same assumptions and you get $872,751.96. What if you start investing $250 per month only 10 years away from retirement? You’ll get only $45,736.51. Don’t wait! The opportunity cost to plan for retirement is too great to wait until you’re financially “stable”. How do you become financially stable in Miami? See Financial Hack #1.
5. Make boring investments.
Sticking with investments that have proven track records will help you sleep better at night and you won’t lose your shirt. Exageración es común en Miami.
6. Work with a CFP® professional in Miami.
You don’t need to be a millionaire anymore to work with a competent financial advisor. A CERTIFIED FINANCIAL PLANNER™ professional is a fiduciary, which means she or he follows the best interest standard of client care. Seek out sound financial advice from a vetted professional and take it. If your cousin Manny from Sweetwater wants you to pool some money for an amazing investment opportunity, run the other way.
7. Make financial rules for yourself.
When you come into a lump sum of money (maybe you win a prize, receive an unexpected bonus, or sell extra mangoes from the back of your pickup), make a rule for yourself — whatever you receive over and above your budgeted income, decide in advance what happens with this money. For example – 50% goes toward debt and 50% goes toward fun. Keep things fun, but within a budget and give every dollar a purpose. As a rule, unbudgeted funds sitting in your checking account will evaporate in this heat.
Jonathan G. Cameron is a CERTIFIED FINANCIAL PLANNER™ professional and co-founder of CameronDowning, a Registered Investment Advisory Firm in Miami, FL. Please connect with us on LinkedIn, Facebook, and Instagram. Also, check out the rest of the CameronDowning website as well as our Financial Planning Videos page where we’ve created dozens of short videos answering many of your personal financial questions.
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