Hi folks. Today I am going to write about managing your money. My attorney has told me to say this. I am not a financial professional. The information provided is based on my personal experience. It is not meant as financial advice. Please contact a financial professional for advice about managing your own money.

The reason I am writing this is because yesterday I read that Kanye West a rapper and singer in the US is in debt for $53 million. He has started a GoFundMe campaign to have people donate money so he can get out of debt. Kanye West is successful. At least that’s what I thought. He has sold a lot of copies of his albums, he has a clothing line and other endorsements. He is married to Kim Kardashian. She is the heroine of the reality show in the US called Keeping up With the Kardashians. Kim is also a model. She is famous for posing nude or semi-nude for magazine covers. She also makes a lot of money. In spite of that he is in debt. Why? The simple reason: Poor money management skills. Another rapper 50 cent also declared he was in debt $50 million. But in his case either an ex-wife or ex-girlfriend, took him to the cleaners. I remember long time ago, singer Billy Joel had fired his accountant because he was embezzling money. I feel that all these people depend heavily on their accountants and don’t pay attention to what he or she is doing. They also have a lot of people around them that give them bad advice.

Long time back, my wife and I started working with a financial adviser to learn to manage our money. It was 1995 and I was being laid off from a company. But they were giving enhanced severance packages. Also both my wife and I wanted to go back to school and we knew that our student stipend was going to be much less than our corporate salaries. Long story short, we invested money in whole life insurance policies that builds cash value. We also opened a money market account and started saving a certain amount of money each month. It came in handy when we graduated and were buying our first home. We systematically set aside money to come up with the down payment. It also came in handy when I got laid off again. I wrote about it in the book 50 Things to Do If You Get Laid off (this book is available for sale on Amazon.com). But as times change, your strategy also needs to change. Nowadays, the interest rate on savings account and money market account is so low that you cannot build wealth. But at the same time, your money should be such that if you need it in a pinch, you can access it. So keeping some money in savings is not a bad idea. To build wealth you need to find investments that will appreciate. Again if possible read books by Robert Kiyosaki (Rich Dad Poor Dad). I also invested some money in precious metals like gold and silver. I have invested in real estate. Investing uses the power of dollar cost averaging (buy more when prices are low and buy less when prices are high) and compound interest. In other words, all my eggs are not in one basket. Diversification is the key. You can also take advantage of your employers plans. Maybe if your employer has direct deposit into multiple accounts, take some money from your paycheck and have it deposited into a savings account. Always pay yourself first. I hope you enjoyed reading this post. Let me know your thoughts.