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Be very careful of any investment that has a lot of hype. I’ll follow their lead, and the naysayers of debt can enjoy their cash and slow net-worth growth. If Apple is doing something, it must be working out for them. Using debt wisely takes a particular knowledge. Would you say they are foolish for having this debt? Apple has over $100 billion in long-term debt. Debt Can Be a Good Thingĭebt can be used to multiply your wealth faster than if you pay cash for everything. Much better to save money today and be prepared if you lose your job. You can be proactive in how you prepare for when life is tough. Have an emergency fund that is fully funded and be diversified in your investments. No one knows what the future holds, and that's why it's essential always to have a backup plan in case things don't go according to plan. Stay grounded in your long-term perspective. Market corrections and crashes will happen multiple times in your lifetime. You will be in a much better financial position taking a weekly or monthly look and seeing if you need to make any changes. Your mental health will suffer if you look at your finances every day. Your time horizon is years, not months, and indeed not days. Remember, you are setting yourself up for retirement down the road, not today.Ĭompound interest will be your friend over the long term. If you begin investing in a down year, you may become discouraged. When Young Income Matters More Than Investment Returnsĭevelop a habit of investing money every month. From there, you can make adjustments as you see fit. You will learn a lot about yourself and your habits. Find a way that works for you and stick to it. Use a notepad, your phone’s note app, or an automated smartphone app. If you do not have accurate knowledge of your finances, how will you improve them? Tracking your expenses is a top priority to have success with money. The freedom to live life and manage your time as you see fit is so sweet. Once you have assets paying your bills, you can choose not to be tied to a traditional 9-5 job. Assets pay you each month, while liabilities take money from you. Assets Lead to WealthĪccumulating assets is the key to winning the personal finance game. There are many other ways to earn a living without being a W-2 employee. Unless you are incredibly passionate about your job, you will most likely come to resent someone else telling you to eat lunch precisely at noon. I have heard this phrase ad-nauseam throughout my life. You Don't Have to Work a 9-5 to Make Good Money Remember when you were younger, and your friends would say, don’t break this pinky promise? The same applies at any age. When you swipe your credit card or sign a contract, you are making a promise. You may be denied housing based on your credit history. If you have a $20 balance on your electricity bill and don’t pay it, you will be sent to collections, and your credit will suffer. Personal Finance Mistakes Happenĭon’t ignore your mistakes. If you can avoid student loans in total, do it. Keep this in mind when choosing a college. Schools have a vested interest in having more and more students. Most students fall into the trap of graduating with a degree that gave them a lot of knowledge but no skills. #SCHOOL SCHOOLBOY Q MAKE MONEY TAKE MONEY CRACK RUN HOW TO#School doesn’t teach you how to pay off a student loan. The education system will encourage you to go to one of your dream schools and finance it with student loans. When decisions are made reactively, a wrong finance decision is made. Use your paycheck to save and proactively finance that engine replacement on your car. Have a separate savings account, and whenever you earn money, transfer some into this emergency fund. To be proficient in personal finance, you must be ready for when life throws you for a loop. The surprise tax, engine repair, or medical emergency can potentially occur in any of our lives. Right when you have your personal finances in order, something terrible happens. You will need to learn to manage your money independently, though. Many of these apps will teach you about investing. There are many apps in the business of investing. If you are self-employed or your employer does not offer a 401(k), you will use an Individual Retirement Arrangement (IRA) account. You can choose a certain amount of each paycheck to be automatically invested in your 401(k). Many companies offer a 401(k) retirement account with an employer match. Make it your business to become proficient when you manage anything finance-related. Start saving early, and you will take advantage of compound interest. With the rise of financial smartphone apps, anyone can invest.
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