There are some important money and finance lessons that an individual needs to imbibe if they ever plan to attain financial freedom.
Here are some of these lessons that are not taught in school.
1. Wealthy people put their money to work for them. You must understand the concept of working to live or living to work. Your mind will learn to think like an employee if you labour for pay. You will perceive things differently if you begin to think differently, like a rich person. What matters is how much money you keep, not how much you earn.
2. Your biggest asset is your financial literacy. Our minds are the most powerful tool we all possess. It can generate a great deal of wealth if properly trained. Intelligence creates wealth and solves problems. However, money without financial acumen is easily lost.
3. Understand the difference between liabilities and assets. An asset is something that helps you make money. Something that drains your bank account is a liability. Shares and real estate investments are acquired by the wealthy, whereas the poor add commitments and responsibilities like fast cars, etc.
4. Resist letting your emotions rule you. People who are afraid are forced to work hard to make money in the vain hope that doing so will lessen their fear. They are apprehensive about making an investment or taking a risk by starting a business. In a similar vein, the desire to get wealthy quickly motivates the majority of people.
Therefore, having a plan is crucial. either a business strategy for your company or a strategic investment plan for your investments. The presence of a strategy prevents you from being influenced by fear or greed.
5. Work not for money but to gain life skills. Work not to earn but to learn. Look for a job that will teach you life skills. You can improve your professional situation by learning new things, which can increase your knowledge and give you life skills. Learn something about accounting, public speaking, investing, markets, the law, sales, and marketing. An investment in knowledge pays the best interest.
6. Failure inspires winners and defeats losers. All wealthy people have experienced financial setbacks. However, many poor people have never lost any money. It’s interesting to note that the wealthy share a fear of losing money with the poor. The way the wealthy and the impoverished, however, handle fear is what really sets them apart. You will never make money if you play to avoid losing money. When things do not go as expected, it is a chance to try an alternative strategy. Learn and move on.
7. Learn to manage risk. Investment itself is not risky; the risk is in not knowing about the investment. Increase your understanding if you wish to lower the risk.
8. Mind your own business. If you already have a job, keep it and launch and grow a side hustle. It is advised not to quit your job before starting your own business. Don’t toil your entire life away for someone else. Start and expand your own business.
9. Find a reason. Everyone aspires to be wealthy. However, a lot of us don’t want to struggle. What drives your desire for more passive income? For many, It’s because they don’t want to work all their lives. They desire the ability to decide how they want to spend their time. Others desire to financially support their kids.
And still others desire to donate to their community or a charity. Putting your “Why” down in writing will help you stay motivated. It is challenging to stay on the road to prosperity if you don’t have motivation. Never forget that while it wasn’t your responsibility to be born poor, it will be your fault if you die in poverty.
10. Pay your own bills first. It is challenging to become wealthy if you are unable to take charge of your finances. You cannot become wealthy if you lack financial discipline. Hence, pay yourself first. Prior to paying your obligations each month, invest first in assets that can generate income.
Utilise the urgency to settle your debts as motivation to think of creative methods to get money before the debt collector knocks on your door. This is a challenging yet crucial principle. Always pay your bills. You won’t feel any strain if you pay yourself last, but you’re also unlikely to find new sources of revenue either.
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Of course, this is exactly what the taxman does; he takes money out of your pay packet each week or month before you receive it. The taxman does this in the knowledge that if he failed to do so, it would be very difficult to get money from you at the end of the year.
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