Wealth is more than achievable — although most people firmly believe otherwise.
Well, that’s their right. The right to remain without money.
Wealth becomes easily achievable for each of us if we consistently adhere to the principles of wise handling of money.
They should become as familiar to us as morning coffee (or any other “favorite” habit).
In today’s article we’ll talk about Five Rules for Smart Money Management that will make your family very rich:
1) “Money” thinking
The sooner you build a strong financial foundation, the faster your wealth “trajectory” will rise.
The basis for creating wealth (= sustainable monetary well-being) is the habit of using earned money to create “new” money.
But there is another habit that dooms people to an eternally empty wallet — spending their entire salary “to zero.”
I hope you understand well the difference between these two habits?
2) Wealth can be precarious.
At this point they usually write to me in the comments that you can get a very large salary and not “worry” about money.
So it is, but one extremely unpleasant pattern can be traced here:
Those people who “suddenly” became rich (thanks to luck, career, business, fame, etc.) after some time completely lose their wealth due to careless handling of money.
Alas, everything has its ups and downs.
When one asset class rises, another falls.
This is why wealthy people hold their capital in different currencies and assets — which is called “diversification.”
3) Your own boss
Increase your income, not your expenses.
Alternatively, think carefully about your career path.
Find someone who is very successful in your field and model your career after them.
There is an alternative option:
If you are not inspired by career growth or you don’t see the point in changing your profession in mid-life, then you can look for additional income (in your free time from your main job).
The simplest thing is to learn how to make money on the Internet.
4) Aversion to consumer loans
This is exactly the feeling you should have when you see advertisements for loans.
The fact is, borrowing to buy things is the worst thing you can do to build your equity/wealth.
Let me give you a figurative example:
If you decide to lose weight, then it is much easier not to eat a donut than to “burn” the calories obtained from it through physical activity.
A donut contains approximately 300 calories and you will have to walk about 7,000 steps to burn them off.
The same thing happens with money.
It’s easier not to spend money on something than to look for free time to earn extra money.
5) Today’s events have no relation to the coming decades
Train yourself to invest regularly — no matter what is happening in the economy.
Whatever the market does today, it shouldn’t stop you from acquiring assets.
When the stock market falls, don’t sell — keep buying index funds.
When the market is at its highs, don’t sell — keep buying.
Investors who invest money with a “long-term view” for decades and are able to emotionally “ignore” short-term fluctuations are guaranteed to create impressive financial capital (= wealth).