Liz Koh: Wise youth will take lessons from Victorians

Don't spend everything you earn.

It is rather tragic that we don't acquire the knowledge and insight we need to get the most out of life until we are near the end of it. The basic principles of financial success don't change over time and there's much young people can learn from those who've been before them.

Despite their meagre household incomes and large families, our forebears were able to provide the essentials of life for their families without handouts and without going broke. Saving was imperative, because each individual had to make their own way in the world.

While we expect to have a higher standard of living than previous generations, there are four important principles our forebears used which young people need to know:

-Get into the habit from your first pay of not spending everything you earn. Saving isn't the only way to build wealth but spending more than you earn is a fast way to lose what you have. A habit formed early will last a lifetime.

-Have clear goals for how you want to use your money, and manage it proactively. You can choose how and when you want to spend your money, so do it in a way that will achieve your goals. Money can only be spent once, so make sure you spend it on things important to you.

-Don't be greedy. Take your time to enjoy life and build wealth. Those who acquire wealth slowly and spend it slowly do better in the long run because they don't take unnecessary risks.

-Avoid going into debt to buy things that don't increase in value. Taking on debt means high outgoings and less ability to create wealth.

If we all lived this way, how much wealthier we would be!