Learn from Your Experience
I am not a ‘guru’, everything I share are based on personal experience (and the experience of people close to me and also the people I read about) and even the most successful people say that ‘experience is the best teacher’. And from my experience, the basics are simple when it comes to financial health…
SPEND LESS THAN YOU EARN, SAVE AND INVEST THE REST.
Knowing what should be done and actually doing it, however, are two different things.
Most people realize that spending more money than they have is a bad, bad habit but still this doesn't keep millions of people from racking up on credit-card debt.
Here are 5 more money lessons (the continuation from yesterday’s post) which have the power to change your life – that is if you are able to live by them.
6. Money Seduces
It's a fact of life. At some point you will likely be offered employment that pays you more than what your dream job will pay, or a good salary when you aren't yet sure what your dream job is.
You will likely justify taking the job because the extra money will outweigh the compromise of putting off what you want to do and you may assume it will even help you to pursue your dream job in your spare time since it will mean you have more money.
This is a false justification that will only serve to make you lose sight of your true goals in life. Be very careful of the seduction of a higher-paying job, because when you accept it, it will be difficult to leave.
Share what you love and money will follow. Think about your goals and align your actions towards these goals. Once you do this, money will flow – you don’t even know where it is coming from.
7. Financial Mistakes Aren't All Bad
I've made more than my fair share of financial mistakes, and you're going to make financial mistakes, too. Everybody does and they can actually be a great benefit for you in the long run. It is only by making mistakes do we learn how to make correct decisions.
The key is learning from them instead of repeating them over and over again. Instead of getting down on yourself when you make a mistake, take the time to learn from it and make sure that it never happens again.
If you learn from your mistakes, you will come out far ahead than if you'd never made any mistakes at all.
8. Do What You Love and the Money Follows
The money probably won't be there at first, and it might seem impossible for you to figure out a way to make money from it, but if you are truly passionate about it, there is a way to succeed and make a living doing what you love. It takes a lot of time, effort and persistence, and it won't be easy.
You will likely have to become quite creative to make it happen, but if you truly love what you're doing, that effort will be the reason you are willing to put in the extra hours it takes to succeed.
9. Money Is Emotional
You know yourself better than anyone else, and what motivates you. What motivates me and what motivates you may not be the same.
Take this knowledge and use it to your advantage. While personal-finance books will tell you the best way to handle your finances from an unemotional perspective, this advice is worthless if it doesn't work with your personality.
Adopt the methods that will help you get to your financial goals the quickest, leveraging your personal habits to do so.
Doing something (even if it is a longer process) is almost always better than the choice of doing nothing because the method advanced doesn't work well for your personality.
10. Embrace Compound Interest
If you want to be wealthy, understand compound interest and how it is your best financial friend from an early age. To retire early you don't need to make a lot of money.
All you need to do is begin saving small amounts early. The earlier you begin to put money into retirement savings, the more you'll have, and the sooner you will be able to retire.
Most people think that it is a matter of working hard and making a lot, but the true path to wealth is simply to start saving and investing from an early age.
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