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4 Money Principles You Cannot Ignore

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We all want to achieve financial independence which is the final stage of having sufficient personal wealth without having to punch in the clock at work daily to afford basic amenities.

When your friends or family complain about the stress associated with their 9-5 jobs, you can’t relate as you’ve reached the stage where you can sit and watch your money grow.

However to reach this level of Zen in the personal financial sector, there are some things you should know about money and certain principles you should follow. Here are 4 money rules you cannot ignore:

You Can’t Afford Everything.

Look at that long list of things you want and look at your account balance. What can you afford to buy and what can you afford to let go of? You can afford to buy some things but definitely not everything which leaves you with the decision to choose which is more important and sensible to you.

It’s Your Money, Act Like It.

Have you ever seen questions or statements like “He/She has so much and won’t donate to so-and-so charity” or “why did you spend that amount buying a bag as opposed to giving to the church?” Learn to get rid of strange expectations society has over you and do what you want with your money.

If you listen to what society deems right, you’ll end up spending money where you really do not want to which is really a shame.

Mind the Money Gap.

People are of the notion that the more you earn, the more you save. I think that’s wrong. Most people who earn a lot more than they used to earn before, spend more than they used to spend before.

What you should be watchful of is the Money Gap. This is the space you leave between your savings and expenses. If you can increase that space as you earn more, you’re on a good way to financial freedom.

Don’t Budget.

I’m serious. Try it for a month. What you should do is, take of your savings from your income the minute you get it and do with the rest as you please for the month. Don’t touch the savings at all no matter what. At the same time, don’t stress over which brand of cereal is $2 cheaper than the other.

This article originally appeared on Piggybank.ng. Follow them on Facebook , Twitter , and Instagram

Personal Finance

VIDEO: 3 Things You MUST Know About Your Credit Score

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We all know what a credit score is. Sort of. But what really goes into your credit score? In this video, Investopedia breaks it down. Here are the top 3 factors that affect your credit score — and what you can do about it.

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Personal Finance

INTERVIEW: Kevin O’Leary On How To Survive A Market Downturn

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Market downturns are inevitable. Just as the boom drives home the big bucks, recession can plunge many into despair with low employment, weak wages and dwindling upbeat market sentiments.

In this video, Shark Tank host, Kevin O’Leary talks about how you can win during the market downturn.

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Personal Finance

How To Invest Your Way To Your First $1M (In 8 Steps)

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While being a millionaire most certainly offers a sense of privilege and extravagance, it also provides comfort.

Despite the idea that many of life’s luxuries can cost you your bank (plus a large chunk of your future earnings), achieving comfortable wealth is possible—if you’ve got a solid investment plan you’ll follow religiously.

Here are eight investment strategies to work your way to your first million dollars.

1. Say No To Fees (Of Any Sort!)

Investing comes packed with hidden and some obvious fees – broker fees, distributor fees, exit and entry fees, maintenance fees, and a string of other service-based fees. If you can manage your own investments and money, you can save hundreds of thousands in fees over the lifetime of your investment.

2.  Don’t Try To Time The Market

This can be one of the biggest blunders one can make—simply because it’s impossible, speculative and you’re gambling with your savings. While there are indicators that show market trends, this does not promise that your investment will most certainly move up or down.

3. Think Long Term And Diversify

If you put all your investments into one asset class, your investment will tank the minute the asset class goes into free fall. How do you beat this? Plan and diversify your investment – it could be debt, treasury bills, equity, real estate, startups, business ideas – anything, as long as you think long-term. This can pay off in the long run.

4. Think Like An Owner

When you buy your stocks or make your investments, think and act like it’s yours – you’ll be doubly careful to make the right checks and invest smart. When you invest in solid, robust companies with this in mind, the returns would also be equally strong. Good companies can pay you high dividends that can up your total income.

5. Invest In Yourself First

Be it education or investing for your retirement, put yourself first and then try to budget for the other frills in life.

6. Borrow If You Can, Don’t Buy

With a growing shared economy, you now have plenty to choose from – co-working spaces, ride-hailing and ride-sharing services, shared rentals and accommodation, and the list goes on. Here’s where you can really cut costs – be it while running your business or as a regular looking to channel the savings elsewhere.

7. Set Goals (And Stick To Them)

Make sure you start saving as early as possible and invest it – even a dollar can compound over time. As time goes, set bigger goals and get excited about them! Once bonuses and income increases come your way, bump up your investments – it can soon touch a quarter of a million.

8. Max Out Early

Your 401K can be one of your biggest retirement funds and maxing out your annual contribution by the end of June can be a great way to boost your retirement savings. How does this help? It gives your money an additional six months to compound.

 

 

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