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Thursday, November 26, 2020 05:00 AM (GMT + 7)
GiadinhNet: Effective money management is one of the most important skills in life. However, only a few people master this skill and achieve it.
Those are the people who understand the value of money and know how to use it to earn money from a young age. Fortunately, this is something that can be learned. Take the time to practice some of the following basic principles that will change your life for years to come:
1. Seek comfort, not freedom
Comfort is the enemy of wealth and a danger to finances. The middle class seeks comfort. The rich seek freedom and financial abundance, so that later money does not depend on their efforts.
2. The cheapest cost to repair an item is as soon as it is damaged
An item is damaged, you often hesitate to leave work to fix it. Then things get worse, until you can’t fix it, you spend a lot of money in the rush. Also, sometimes a broken item causes something else to go bad, so the costs add up. So do not be lazy, do not delay unworthily, do not avoid problems that can be completely solved quickly.
3. Lack of long-term plans
Wealthy investors are very patient and rarely think about short-term returns. “Not many people really think and plan to invest their savings for the next 20 years. Meanwhile, the rich do it; they never do anything unprepared,” Corley said.
“Instead of buying a picture to display in the living room, the rich spend a lot of money on a piece of art that has the potential to drive up prices. They will join many clubs or organizations and leave clues. Relationships are beneficial to themselves, even though it takes them many years to realize the benefits, which requires not only foresight, the ability to plan strategies in stages, but patience, ”said Ivory.
4. Only one source of income
No matter how big your income is, there will never be a single source of income. I know a director who makes $ 350,000 a year and that’s all her income. Suddenly his industry went downhill and he had no source of income. This has happened to many Americans, destroying “fake” wealth.
To build wealth, you must invest to create a reliable income stream that is independent of your primary source of income. I use the money from renting an apartment, partnering with another company to generate passive income. This is not diversification, it is simply accumulation of wealth.
5. Can’t distinguish between need and want.
The rich are always on the alert to distinguish between wants and needs. They also spend money to satisfy a want, but never justify it being a need. When you see something you want to buy but don’t need, ask yourself what is more important: buy this item or accumulate money to gain freedom, not depend on others.
Before planning to buy something outside of the required zone, review your priorities at this time. Organize your priorities before you buy.
6. Don’t “pass your hand across your forehead”, spend less than you earn
The world’s super rich people have this principle in mind. For example, legendary investor John Templeton always saves 50% of his income even when life is difficult. If 50% is too large and beyond your means, don’t worry too much. You can be financially successful with a savings rate of 10-15% of your income.
7. Savings are just to save
People cannot create wealth simply by saving money. Bank interest rates are not much higher than the inflation rate. Most importantly, idle money always seems to find a reason to spend.
Dave Ramsey recommends that you do not carry cash or credit card because when you have it, you always have a reason to use it.
“To ensure that my wealth goal is met, from the age of 25, I channel my surplus money into future investments, which I do not easily access, so the money is available when I have enough knowledge and determination to invest.”
Source: http: // giad Vacations.vn/thi-truong/neu-ban-muon-song-kham-kha-hon-thi-tuyet-doi-khong-duoc-mac-7-s …
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