How the 7 Deadly Sins Can Send Your Finances 'South'

Of the Seven Deadly Sins, greed is naturally the one that is most often connected in our minds to money mishaps. Gluttony makes us imagine overdoing it at an all-you-can-eat buffet. And sloth triggers feelings of guilt about the lawn that never gets mowed.

However, each of the seven cardinal sins -- lust, gluttony, greed, sloth, wrath, envy and pride -- can have toxic financial effects on your bottom line. Of course, none of us is without sin. But it's worthwhile to pay attention to how you're dealing with your financial matters and to try to avoid the seven deadly sins. Less sinning can lead to a much more comfortable financial life, now and later.

Selena Maranjian is a longtime Motley Fool contributor. You can follow her on Twitter @SelenaMaranjian.

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#8 - The idiots that voted for Obama and Biden the 1st and 2nd time.

June 18 2014 at 8:56 AM Report abuse +2 rate up rate down Reply

What this all boils down to is not being too emotional with your money. Being weak and submitting to sin will destroy your financials. Don't be foolish and fall into the trap of trying to measure your wealth by the value of your assets. Markets change. Valuations fluctuate. Instead, measure your wealth by the amount of cash flow your assets consistently generate. And follow these 7 steps:

1) Pay off your debts as fast as you possibly can. If this means living in a crappy studio apartment and eating ramen everyday for a couple of years, do it. If you want to buy a car, get a reliable beater. Insure it for $20/month with Insurance Panda... Forget about buying a house until your debts are paid off.

2) Once you are out of debt, stay out of debt. The only exception to this rule is a vehicle and a house. If you want to get a nicer car, buy used and be able to pay it off in a year or 2.

3) If you are going to stay in the same spot for at least 10 years, buy a house, preferably with at least a little bit of usable land. An acre is good, 5 acres is better. Take the amount you are pre-approved for and cut it in half - that's how much you should spend on a house. Come to the table with at least 20% down and make a couple of extra mortgage payments every year. If you're going to be transferred or relocate every 5 years, forget about buying a house and rent instead.

4) Develop multiple revenue streams. Do contract work. Start a business on the side. Invest in a business as a silent partner. Raise chickens or grow apples. Build websites. Buy and sell antiques. Acquire rental property. Sell something that generates residual income. Learn to play the currency markets or trade stocks. Do whatever you can to generate income from multiple sources.

5) Grow these multiple revenue streams to the point that they generate enough consistent and reliable cash flow to replace your current income.

6) Make as much as you can. Save as much as you can. Give away as much as you can.

7) Retire!- the sooner, the better. Be sure you understand that "retirement" doesn't necessarily mean you stop working, it just means having the freedom to do what you want to do, when you want to do it.

June 17 2014 at 3:02 PM Report abuse +2 rate up rate down Reply
1 reply to zigitelekus's comment

@ zigitelekus --- Generally, I agree with everything you wrote, except for the following:

Re buying a house, if you "think" you will be in the same area for ten years --- unfortunately, nobody knows WHERE they will be in ten years time, any more. In today's fast-changing world, it is impossible to project out that far in time. You can take your best guess at where you might be living in a decade, but that is all it will be. Just a guess.

Buying a home used to make sense, when people could count on working the same job for 30 years and staying in the same area. Those days are gone, and they are not coming back. If you choose to buy a home, now, it will be like a big anchor tied around your neck. You won't have the mobility to go where the better jobs are --- because you will be stuck trying to sell that house before you can relocate.

Re your suggestion of "learning to play the currency markets or trade stocks" --- very few people can do this, successfully. For most --- the result will be that they will burn thru a pile of cash, instead of making money. Buying solid dividend paying stocks (with a long history of raising the dividend every year) would have been a better suggestion to generate extra income.

June 17 2014 at 4:58 PM Report abuse +1 rate up rate down Reply