Finances are as important as any other part of our lives.
Therefore, wake us up at night — the rules that we must follow must fly from our teeth — in order to live in abundance and “with money”.
They can also be called “Financial commandments leading to monetary well-being.”
1) Know your limits
It’s about “living according to your income.”
People who are accustomed to spending all the money they earn condemn themselves to living “from paycheck to paycheck.”
When any trouble or “force majeure” immediately dooms them to canned beans and a credit yoke.
Moreover, regardless of the amount of income received.
2) Be careful
Anything can happen in life.
Therefore, urgently create a so-called “reserve fund” that will be able to financially support your family for 1 year.
During a crisis, this amount should be equal to 2 annual expenses (keep in cash and on deposit in a reliable bank).
3) Money doesn’t grow on trees
Pinocchio had the (sad) opportunity to verify this.
Therefore, be pathologically careful when investing your money.
Yes, of course, “money should work,” however, there are always nuances when choosing investment options.
If something sounds too good to be true, it probably is!
Do not rush to believe the advertisements you see and the recommendations of so-called “financial advisors”.
All their advice, as a rule, is paid, i.e. are engaged by some financial structure that wants to take your money.
And it’s not a fact that they will come back to you.
4) Wealth does not happen overnight
Capital formation takes a certain amount of time.
Always remember that growing wealth (your investment portfolio) is like tending a garden.
Enjoying/feeding on the fruits will require care and time from us.
The guideline is 20 annual expenses.
This is the financial minimum with which you can safely retire (in this case, income from investment capital will be able to fully support you).
5) Portfolio investments
Our money should be invested in different classes of assets — this is called the “portfolio approach”.
The fact is that no type of asset constantly increases in value.
That is why our money must work in different instruments (some will become more expensive, some will become cheaper).