IMPORTANT THINGS TO KNOW ABOUT MONEY
IMPORTANT THINGS TO KNOW ABOUT MONEY
There are many different financial theories and guidelines. For instance, Warren Buffett asserts that the first rule of money is not to lose it. Some schools of thinking hold that the first rule of money is to make money; others hold that the first rule of money is to spend money on your necessities first; and there are many other schools of thought. The subject of this article will be different.
Like my own, the majority of households rarely discuss money. Simply put, it was not a topic that was discussed frequently in the family. When the topic of money came up, you frequently heard statements like “those who care about money are greedy,” “money is the foundation of all evil,” and other disparaging remarks. Now, because of the remarks made by our family members, many individuals now believe that having money is a terrible thing. Hence, despite our sincere desire to escape poverty or increase our present level of income, we were unable to do so because we either felt terrible about it or had the knowledge necessary to do so, leading us to live pay check to pay check. In order to avoid appearing foolish, ignorant, or like rapacious capitalists who just care about their own financial gain, we tend to feel bad when we ask someone about their finances. Here are three different financial lessons I learned.
1. Money is just a game
The ones who comprehend that it is simply a game and neither good nor bad are the ones who are most successful at making money. You cannot refuse since we need money to survive in this world. You need to relearn what money actually is and how it functions in society in order to undo the misconceptions that those who lack money have taught you. Knowing the rules and how to play the game is the first lesson to learn if you realize that money is just a game. You can make good money without engaging in any dubious activities. Simply be aware of the game’s basic guidelines.
2. Understand the rules of money.
The first thing you must go past in order to comprehend financial laws is the constrained belief that money is difficult to understand. It’s simple to comprehend how money operates. Simply said, that is how it has been created to appear. Stock brokers, bankers, and other professionals who make it appear complicated are also those who profit from your ignorance. For instance, banks only offer you meagre interest rates of 1% to 2% on your deposits. They then invest these funds in secure equities and treasury bills, which have yields that are more than double the percentage they are offering you, allowing them to make more money while paying you pennies.
Here are three basic financial guidelines you should be aware of:
• Money goes to those who give it the most attention. When you start paying close attention to your money by getting on a budget and making daily or weekly financial audits, most people get defensive and start asking whether rich people do the same. The answer is that they, in fact, do. Now, rich people may not exactly keep track of the tomatoes they bought two weeks ago, but they do keep accounts of all their income and expenditures. Since you are starting from a pay check level, get on a budget and keep track of your spending. You then learn your spending habits and start making changes in areas that need improvement.
• Hoarders of money do not generally become wealthy. You can easily tell a person’s financial status by listening to how they talk about money. If they think it is something difficult to come by or keep, then they are poor. If, however, they see it as something that is infinite and abundant, then they are probably rich. People who see money as limited become hoarders and see others as competitors. This is because they seem to think that the more others have or get, the less they have. Instead of working together with people, learning from them, sharing ideas, investing money, and so on, they keep their money. Forgetting that the longer you keep money, the less valuable it becomes. It is very difficult to win the money game if you view everybody else as the enemy. Some of the wealthiest people are those who are most generous with their time, energy, and resources.
• You can only do three things with money: spend it, save it, or invest it. People who are losing in the money game are people who are either spending too much, saving too much, or investing too much in the wrong things. If you’re spending too much, then you are literally stealing from your future wealth. If you’re saving too much, then your money is losing value over time due to inflation. So when it comes to winning with money, investing money is the best thing to do.
3. There is no One-Size-Fits-All answer to building wealth
You must learn and comprehend this if you want to accumulate wealth. Each person’s journey is unique. In stark contrast to Jeff Bezos, Bill Gates, Elon Musk, and others, Warren Buffett takes a very different approach. Someone advising you that this is the method to become wealthy is just telling you how they did it, which may or may not be effective for you. As a result, every wealth-building approach you adopt must be customized to your resources, abilities, wants, and desires. There isn’t just one way. Don’t get too caught up in the comparison game because some are undoubtedly going to be simpler than others. However this tactic is proven to have been successful for everyone. Build a cash generating company or business and pour the proceeds into cash generating assets like real estate development.