This post covers my top 7 things to secure a strong financial position in life. Here they are.

1. Pay Off Debt

First is debt. Debt can be a real drag for your future. If you have any form of debt, other than the productive one, it must be the first thing you need to get rid of. A productive form of debt includes borrowings for business. For instance, you used debt to buy business equipment or acquired rental property. That is a different matter. These loans allow you to use leverage to buy assets that earn income.

The unproductive debt I am talking about includes credit card debt and payday loans. There could be different reasons why you got into it. But, this type of debt is almost always a bad idea. These loans will charge very high interest rates and will likely get you into a debt spiral. Work on getting rid of this debt. Consolidate it at a lower rate and make a plan to pay it off as soon as you can.

In certain instances, it may even make sense to pay off your mortgage faster. It all depends on your financial situation and the interest rate you face. If your mortgage rate is below 4%-5%, then it is likely not worth it. But, if the interest rate is 8% or 9%, focus on paying your mortgage off faster. Or, refinance it at the first opportunity when the market interest rate goes down.

2. Spend Less

Frugality is something you can be in full control of, unlike other things. First, you must decide what matters to you most. For some, it could be travel. For others, it is organic food. It all depends. As for less important areas, it is best to cut your spending on them.

While I can give a list of actions that can save you money, it is very difficult to apply it broadly. This is so because each of us has a different set of preferences. But, if you insist, here are my top 5.

Buy Used

Buy used whenever possible. Used cars, used electronics including smartphones, can cost you a whole lot less.

Cook at Home

Second, cut back on eating out at restaurants. With labor and food inflation, restaurant prices are out of control, as are many other things. Instead, focus on buying and cooking your own food. You will save even more if you shop around and buy groceries in bulk at places like Costco or online.

Home Location

Third, choose your home location and size well. Depending on various factors, your mortgage or rent can be reasonable or too excessive.

Subscriptions

Fourth, take a look at your subscriptions and see which ones you can eliminate. There are so many services these days offered at a small fixed monthly fee. But, once you start signing up, it is easy to lose track of them. At the end, these small fees add up to hundreds of dollars. Peruse your credit card records and see what you can drop.

Life Partner

Finally, choose your life partner wisely. This is a big one. It does not matter if you are the world’s most frugal person. If your spouse likes to waste money, you will be in a perpetual state of financial struggle.

3. Earn More

This is easier said than done. There are many factors here that are out of your control. But, there are a few things that you can start to at least ponder over today. First, is there an interest or hobby that you can turn into an income-generating business? If not, can you acquire skills that can help you earn more?

This is not easy. I know this from my personal experience. Let me give you an example. After my wife and I graduated from university, we wanted to travel full-time.

That was a tough choice. You either need to have a lot of savings or work on wheels. We chose to work on wheels by doing freelance writing for different blogs. I wrote about investing, while my wife focused on lifestyle topics.

Later, we picked one more thing that we still do to this day. And that is photography. Photography always fascinated me and I wanted to get good at it. We started in 2015 from nothing and bought our first cameras and lenses. For that, we used our credit card to get a one-year installment loan.

But, camera gear was our depreciation expense. It lowered our business income later. This is one of the benefits of turning your hobbies into businesses. First, we started selling photos on various stock photography websites. Later, we got into timelapses and stock videos. At the end, we have built a decent passive income stream. You can check out our other blog called Blokhin Films to see our travel posts and more, if you’d like.

These days, we put our efforts into other things. These include our YouTube channels, blogs and more.

The moral of the story is this. There could be hobbies that, if taken seriously, can turn into profitable endeavors. But, it takes some thought, time and organization.

4. Tax-Deferred Accounts

The next thing is to max out all your tax-advantaged accounts. These include 401(k), IRA or Roth IRA accounts. If you are already doing that, that is great. Also, if you are part of a 401(k) plan, make sure to contribute the max amount that your employer matches. That match is free money to you. Do not leave it on the table.

5. Emergency Fund

The next thing to tackle is your emergency fund. The fund should have enough cash to cover living expenses for at least 6 months. But, one year is better. To do that, you need to know how much you spend, though. Do not make assumption and approximations. Get a budget tracker and record your expenses for a year. Or, you can sum all your expenses up by looking at your credit card statements. The problem arises when you pay for things by cash.

We use a simple and free Google Sheets budget tracker. It acts like a mobile app too.

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You must keep your emergency fund in a secure high-yield savings account. Savings accounts are FDIC-insured up to $250K/person. So, if you have a joint account with your spouse, you are covered up to $500K.

6. Taxable Investments

After you max out your tax-deferred accounts, a taxable investment account is the next thing to tackle. While you can start investing, be careful at the beginning. Ask yourself the following questions. Are you interested in picking your own stocks? Do you have time to research companies? If not, do not invest in individual stocks.

It is very difficult for professionals to beat the market. Do you think it is any different for any of us? Instead, invest in ETFs tracking broad stock market indices, such as Nasdaq or S&P 500. If you are young or have 10-20 years before your retirement, the Nasdaq 100 ETFs are the best.

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In case you still want to learn and pick your own stocks, here is what to keep in mind. Allocate only money you can afford to lose. Then, play around with stock picking for 4-5 years. This will allow you to build a track record and tell you what works.

If you succeed in earning profits, that’s great. You are on to something. Keep refining and measuring your strategies until you have your own success formula. The worst case is you lose money you do not need anyway. View it as a learning lesson.

7. Health

Health is something everyone should prioritize. If you have no health, having all the money in the world is pointless. Staying healthy entails many habits that take time to build.

Health is a very controversial topic. There are so many camps out there: carnivore, vegans, paleo, fruitarians, keto. Just to name a few. It is all very confusing. But, let me give you an example from our recent personal experience.

Ikaria Island, Greece | Longevity Blue Zone

In 2023, we visited the island of Ikaria in Greece. Ikaria is known as a longevity Blue Zone island where people often live to hundred years and more.

What’s more, they stay relatively healthy and active even until their last days. If there is anything I’d model my health habits off, it is best to emulate someone who got it right. You can read about Ikaria on our Blokhin Films blog. But, here is a summary for you.

Eat Healthy

Ikarians eat many things. Their diet is very seasonal and varied. When we were at a family dinner there in early summer, we ate homegrown salads, meat and dairy. They even had wild herbs on the table. Almost all Ikarians have a garden, raise their own goats and sheep, but not cows. The pristine nature allows them to produce high-quality food. This food is much better compared to that from our supermarkets. Ikarians also drink their homemade wine.

Stay Active

The people of Ikaria are also very active, always moving around. But, they do not run marathons or pump heavy man-made iron. The modern culture of over exercising would repel them. On top of that, they live a stress-free life. Even if stress happens, they try to maintain a chill attitude.

Building Meaningful Relationships

Finally, they are very friendly people. They value family and relationships with friends and even strangers. They were some of the kindest people we ever met during our travels. There are a few other things that we noticed. But, this post is already getting too long.

So, if there is anything to remember, it is this. Stress, loneliness, a sedentary lifestyle and bad eating habits will make your health worse. To live long like Ikarians, you must live like Ikarians. Of course, that’s impossible. But, at least, we can take those lessons and apply them to our own situation as best as we can.

Final Takeaways

Einstein once said there are five levels of intelligence. These are smart, intelligent, brilliant, genius and simple. We can all benefit from keeping things simple in our lives. This concerns everything, including investing, health and relationships.