Money is a path
Money is a path, not an end. The money is for you to realize things, not happiness, you can buy education, health, traveling, money isn’t an end, money is not a cause, it is a consequence. Usually the people who has more money is the people who work the most.
Do not lose money
It is the rule of money for Warren Buffett, the other rule is to do not forget the first. It is impossible never to lose money, the concept is simple. People interpret the phrase wrong: it is not that you should never make mistakes, it is that you should lose as little as possible. Imagine that you have 100 ,00 USD and lose 50, you have lost 50% of your assets. To reach 100 again, you need to earn 50, which means earning 100% of your money. This does not mean that you must contribute everything in fixed income, but it does mean that you manage your risks.
Greed, fear and impatience generate losses
Careful where you invest, sometimes big growth could be related to frauds, sometimes people invest without knowing what is happening, inform your self, read the news and try to understand why the company is growing.
Income – Investment = Expenses
As I have said in my previous post. Pay your self first! Consider your investment as a bill you have to pay every month. If you do not invest, pay yourself some months, you will miss that in the future. Invest before and the you spend, do not spend and the invest.
Money is not the root of all evil
Knowing how to use this power for good (and to earn money from your own money, making him your servant), is the right way to deal with money. Lots of people don’t like people just because they are rich, people believe that for instance a poor person will be corrupted if they get money, actually, when the person get this money, they gain also power and they will do what they always want to do.
Do not use money that you don’t have
It is obvious, looks obvious and people don’t do it. Do not anticipate your dream, do not buy a car, a travel, a phone using credit, this rule is simple, if you don’t have, don’t use. It is about the fees that you need to pay, it is about the future that you give up, if you want financial freedom. Spend well!
Harvesting Rule
To harvest anything, first you need to plant. Lot’s of people wants the opposite, first you have to plant to harvest in the future, in a diet you won’t eat to get slimmer, you have to plant some effort everyday. Who plants nothing, won’t harvest anything.
Start now
Imagine two people, 1 and 2. The first one starts to invest when he is 19 years old and stops at 26 (7 years), and the person 2 starts from 26 till 65 years old (39 years). The same amount of money. If both have the same grow rate (for instance, 10%), who has more money?
Firstly, the who invest more was the person 2. He saved for much more years, but the person 1 had more compound interest for more time.
Starts as soon as possible!
Focus on contributions
Maintaining discipline and continuing to contribute gives much more return.Initially investing 1000, and 100 monthly, for 36 months at a rate of 10% per year, the contributions will represent around 65% of the final result. Do not excuse that you don’t have money now, start to invest as much as you can, as early as possible and keep doing it.
The future in uncertain – Be prepared
The future is uncertain. There is no point in wanting to predict the future, wanting to hit the butt when the next crisis is coming, etc. The game is not to predict when the uncertainty arrives, but to be prepared for when it arrives. I have posted before that I keep a bit of my money in a low interest account but with high liquidity, when I see some opportunity or crash, I still have money to invest more.
Most of the people who has money know this and try to be prepared for the future, and most of the people starting now believes that they can predict the future.
Saving on coffee doesn’t make you rich
Saving on stupid spending is stupid. You will not be rich saving all the coffees of your life. You need 3 things: win more, spend well and invest better. For instance, imagine if you go to a market very far that is much cheaper, it can make sense to make your shops there, but how long you spend to go there? 5 hours? Maybe those 5 hours can be use to something more important, how much is your hour?
Buy assets
People buy liabilities thinking they are assets. They don’t try to make the money to work for them – they just want to save it until they get entry to something. Money does not work when all you do with it is to acquire liabilities. Invest!
Here you can get audible book gifts. Study and learn!!
rockthefinance 