Advice from an Accountant

Economist David Henderson has a tax accountant who never finished college.  The accountant "has a net worth in the 8 figures" (presumably the fruits of ethical hard work, intelligence, and luck) and cites three common characteristics of financially successful people.

The three he named are:
(1) Don't have a lot of overhead. Don't commit to a large rent. Don't have a large mortgage or, if you do, pay it down quickly.
(2) Be "footloose." That is, be able to adjust quickly when things go bad. So, for example, he told the story of a friend who was doing well but then had his rent on a municipal property jacked up by a local government that saw that he was doing well. His friend didn't renew the lease but went elsewhere quickly.
(3) Take advantage of--and maximize if at all possible--all of the tax-advantaged ways of saving that you have access to: max your 401(k), max your Roth, etc. He told of a man who worked for a large company and who, over his working life, maxed his 401(k) and now has $1.4 million in that account alone.

My own additions to this list for those starting out:

1) Don't be afraid to foresake security for (large) potential upside, at least until children enter the picture.

2) If you fail, keep trying. Being broke isn't that bad when you're young.

3) If you're lucky and brilliant enough to be successful at an early age, pay for help in areas where you lack expertise, for example, intellectual property law, multistate tax reporting, ERISA, Sarbanes-Oxley, to name but a few. Your time is too valuable to waste delving too deeply in these complicated subjects unless they are your specialty.