The best piece of financial advice you will ever hear in your life is also probably the most basic. People often talk about the power of positive thinking and attitude adjustment amongst many other financially theories. If you're not doing well financially, maybe you're finally ready to hear some advice that could make all the difference.
1. It's your money, know where it goes. Too often people are willing to sit back while others take control of their financial destiny. Whether the person holding the reins is your spouse or your financial advisor you should be involved in the decisions that have the power to shape your financial picture. You work eight hours a day for a salary that you expect to work for you in return, so why not pay attention to what is happening to your money after you hand it over. You may not be able to make decisions by yourself, but you should, at the very least, certainly be informed.
2. Before you do anything, save. This has several incarnations, but probably the most popular would be 'pay yourself first'. This simply means that you should think about saving as the money you earn to put towards your goals instead of the money that is unavailable to you for immediate spending. The hunger for instant gratification has made this particular tidbit very hard to follow, but having the discipline to put aside before you pay bills or spend on anything at all can certainly pay off.
3. Start saving for retirement early. Retirement is often regarded as a far off destination that can be taken of in time. This is a big mistake. By tucking away a little every month for retirement starting from your very first paycheck you will have painlessly conquered a goal that remains elusive to so many, retiring with ease. The earlier you start the easier it is to put the money away, and the more you stand to benefit. There is really no reason not to heed this piece of advice.
4. Don't pay interest for assets that decrease in value. The number one offense in this category is the purchase of a car. Preferably, you should amass enough cash to buy the car or take as small a loan as possible and pay it off as quickly as possible. All cars depreciate in value annually. A vehicle is an expense and paying a premium in interest to fund an expense is not good financial sense. The same goes for using credit cards to go on shopping sprees and paying exorbitant interest rates on items that are long forgotten by the time the bill arrives.
5. Master the art of bargaining. The less you pay the more you save. This means that becoming a pro at negotiating a better deal can save you money in all aspects of life from vacations to clothing and household items, which you can use to fatten your savings account.
6. Never act on impulse, with money or otherwise. Don't be too quick to draw for your wallet. Taking the time to think things through and evaluate if the item is really needed in the first place can save you a bundle in the long run. Practicing restrain can help you to cut back on your spending while encouraging you to justify purchases to yourself and hunt for better bargains.
7. Take calculated risks. The rich know that savers are losers. They take no risks and so they reap no rewards. They won't end up in the poor house, but they will also never be wealthy. To become financially savvy and get on the road to riches you must take some calculated risks. This means that you should not simply take chances arbitrarily but rather, you should research the possibilities and then act courageously based on your best information.
8. Don't get too good at the little things. This goes counter to another age old adage that you should do everything to the best of your ability, but the logic here is simple. You should not focus on mastering low pay off tasks, but instead, you should figure out your high pay-off activities and excel at those. Mastering the little things will only serve to bring more of the same your way and you can find yourself trapped in a cycle of low pay off tasks. The way to make more money, by getting a promotion or launching out on your own, is by concentrating on activities that directly impact the bottom line. Making more money of course is integral to becoming wealthy.
9. Harness the power of compound interest. This works both on the side of debt and savings. Appreciating the devastating effect of compound interest on a credit card or other debt instrument should motivate you to always get rid of them as quickly as possible. While on the savings side, compound interest is a great benefit and should be fully exploited by adding as much to the balances as quickly as possible. This is also a good way to save for children, or anything else that has a fairly long timeline, as small amounts will grow exponentially over time even without ever adding additional investments.
10. It pays to pay off debt, especially when you make just enough to get by. What is starting to help you pay it down is switching credit card companies. Look in the mail for credit card offers that give you zero percent interest for 12 to 16 months.
There is a pot of gold at the end of the rainbow, but you must be willing to go the distance and stay the course to reap the reward.
1. It's your money, know where it goes. Too often people are willing to sit back while others take control of their financial destiny. Whether the person holding the reins is your spouse or your financial advisor you should be involved in the decisions that have the power to shape your financial picture. You work eight hours a day for a salary that you expect to work for you in return, so why not pay attention to what is happening to your money after you hand it over. You may not be able to make decisions by yourself, but you should, at the very least, certainly be informed.
2. Before you do anything, save. This has several incarnations, but probably the most popular would be 'pay yourself first'. This simply means that you should think about saving as the money you earn to put towards your goals instead of the money that is unavailable to you for immediate spending. The hunger for instant gratification has made this particular tidbit very hard to follow, but having the discipline to put aside before you pay bills or spend on anything at all can certainly pay off.
3. Start saving for retirement early. Retirement is often regarded as a far off destination that can be taken of in time. This is a big mistake. By tucking away a little every month for retirement starting from your very first paycheck you will have painlessly conquered a goal that remains elusive to so many, retiring with ease. The earlier you start the easier it is to put the money away, and the more you stand to benefit. There is really no reason not to heed this piece of advice.
4. Don't pay interest for assets that decrease in value. The number one offense in this category is the purchase of a car. Preferably, you should amass enough cash to buy the car or take as small a loan as possible and pay it off as quickly as possible. All cars depreciate in value annually. A vehicle is an expense and paying a premium in interest to fund an expense is not good financial sense. The same goes for using credit cards to go on shopping sprees and paying exorbitant interest rates on items that are long forgotten by the time the bill arrives.
5. Master the art of bargaining. The less you pay the more you save. This means that becoming a pro at negotiating a better deal can save you money in all aspects of life from vacations to clothing and household items, which you can use to fatten your savings account.
6. Never act on impulse, with money or otherwise. Don't be too quick to draw for your wallet. Taking the time to think things through and evaluate if the item is really needed in the first place can save you a bundle in the long run. Practicing restrain can help you to cut back on your spending while encouraging you to justify purchases to yourself and hunt for better bargains.
7. Take calculated risks. The rich know that savers are losers. They take no risks and so they reap no rewards. They won't end up in the poor house, but they will also never be wealthy. To become financially savvy and get on the road to riches you must take some calculated risks. This means that you should not simply take chances arbitrarily but rather, you should research the possibilities and then act courageously based on your best information.
8. Don't get too good at the little things. This goes counter to another age old adage that you should do everything to the best of your ability, but the logic here is simple. You should not focus on mastering low pay off tasks, but instead, you should figure out your high pay-off activities and excel at those. Mastering the little things will only serve to bring more of the same your way and you can find yourself trapped in a cycle of low pay off tasks. The way to make more money, by getting a promotion or launching out on your own, is by concentrating on activities that directly impact the bottom line. Making more money of course is integral to becoming wealthy.
9. Harness the power of compound interest. This works both on the side of debt and savings. Appreciating the devastating effect of compound interest on a credit card or other debt instrument should motivate you to always get rid of them as quickly as possible. While on the savings side, compound interest is a great benefit and should be fully exploited by adding as much to the balances as quickly as possible. This is also a good way to save for children, or anything else that has a fairly long timeline, as small amounts will grow exponentially over time even without ever adding additional investments.
10. It pays to pay off debt, especially when you make just enough to get by. What is starting to help you pay it down is switching credit card companies. Look in the mail for credit card offers that give you zero percent interest for 12 to 16 months.
There is a pot of gold at the end of the rainbow, but you must be willing to go the distance and stay the course to reap the reward.
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P.S. Happy Fasting for all my muslem readers.
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