My congratulations and best wishes to all graduates from high schools, colleges, universities, and other establishments of higher learning.

‘Tis the wonderful season of graduation ceremonies. Full of anticipation and excitement of futures about to unfold. There is one in my household too.

First, do your very best to dream big and often. Then explore and discover life ahead of you.

You will encounter plenty of opinions articulating how difficult the path can be. My advice is tune out the army of nay-sayers and follow your instincts.

One very wise habit is to pay yourself first on a regular basis. Start early and aim to save 5% to 10% of gross income.

That will inspire you to do the best you can. Even though you may face more uphill battles than previous generations.

More importantly, don’t fear making mistakes. There may be many of them lying in wait. Your mission is to ensure that you learn from them and not repeat them.

All of us experience challenges in our lives. One key is not to let them fester unabated. Rather, do something constructive about them.

I highlight seven critical money savvy tips that help graduates:

Human capital
Education has helped expand your intellect, also known as your “human capital”. Your task, over time, is to convert it to “financial capital” on your balance sheet. Say in stocks, bonds, funds, cash, savings, home, business and others.

Stick with your educational pursuits as long as you can. You can never have too many. They will cost you a bundle, but are worth the sacrifices. Perhaps, your family can defray some of the cost.

Discover your passion
Find what makes you tick, happy, eager to learn and excited. Especially, the passion that really motivates you. It is far easier to get up each day and is instrumental in converting your “human capital”.

I found my passion during my third year of university. I was happily pursuing electrical engineering, until I attended a personal finance course. New lights went on, my game plan began to change and I’ve never looked back.

Pay yourself first
One very wise habit to master is to pay yourself first on a regular basis. Start early and aim to save 5% to 10% of gross income. Closer to 15% if you can swing it.

Add to your savings periodically, preferably by automatic deposit. It hurts less and sticks better if you don’t handle the money. Develop steady saving habits that you can sustain over time.

Avoid debt traps
Live within your means so you don’t fall into the dreaded debt traps. It’s the quickest and surest way to flirt with financial ruin. Be extra careful when borrowing for consumerism, especially using high interest rate credit cards.

Create a repayment plan before indulging in any borrowing exercise. Too many before you have found out the hard way that debt can be an expensive lesson. Fortunately, student loans are still one of the “better” debts to incur as they help shape your “human capital”.

Learn how to invest
Education may have taught you some strategies for managing personal finances. Perhaps, you’re also conversant with modern portfolio theory. However, that is only the first part of the exercise.

The harder and more important part is to learn the “how to” invest. It’s also called “experience”. The trauma from encountering the first investment loss or bear market reveals plenty about you.

Investment club
Do yourself a big favour. Join or start an investment club and get involved in as many aspects of investing as possible. Concentrate on the logic of investing as opposed to superior performance.

I rounded up five friends in university and we met regularly as a pseudo investment club. All of us did research and made presentations at meetings. Then we each bought what fit in our individual portfolios.

Stick to basics
Manage your finances prudently by following and repeating time-tested concepts. Remember that “boring” is “beautiful” for your long run portfolio. Put the excitement in other parts of your life. Get used to salting some cash into your emergency fund as the lifeline.

The basics also include investing in things that you understand. Learn to take small losses early and recognize your investing biases. Investing is about using common sense, so no emotional attachments to your stocks or knee-jerk reactions please. Your steadfast patience is rewarded.

These money savvy tips will serve you well. They are simple, sound and sensible, yet very powerful. They are not foolproof, but they deliver more often than not.

Your lifelong journey of saving and investing will profit from them. Set your personal money path and tweak it as and when needed.

Don’t be afraid of trying some new avenues. Failure is a wonderful teacher. I’ve been there.

I was very fortunate to find my long lasting passion early on. I sincerely hope you find yours. You will know when you do.

Kindly forward this commentary on to someone that you know. Your feedback is welcomed.

About Adrian Mastracci, Discretionary Portfolio Manager, B.E.E., MBA  My expertise in the investment and financial advisory profession began in 1972. I graduated with the Bachelor of Electrical Engineering from General Motors Institute in 1971. I then attended the University of British Columbia, graduating with the MBA in 1972. I have attained the “Discretionary Portfolio Manager” professional designation. I am committed to offering clients the highest standard of personal service by providing prompt, courteous and professional attention. My advice is objective, unbiased and without conflicts of interest. I’m part of a team that delivers comprehensive services and best value in managing client wealth.