-The more money you have the harder the financial handling will be. It's good to study early how to manage your finances even if you have only 20dollor in you pocket for your 1week consumption good budgeting is needed. How poor right? But its real situation of many people including me.
FINANCIAL LITERATE, is the first thing we must understand to be successful in personal financial handling. Don't be desive by the term, financial literate is not that complex. Its simple as,
-UNDERSTAND YOUR NEEDS
-THINK OF RESOURCES TO MEET YOUR NEEDS
-ADJUST YOUR NEEDS ACCORDING TO AVAILABLE RESOURCES
FOUR FUNDAMENTAL FINANCIAL LIFE STAGES, age don't matter in financial life stage,because financial literacy will determine how wealthy a person is in his financial life stage.
-START UP STAGE, salary is the only source of income. All of income came from your hard work and time.
-BUILDING UP STAGE,20% of your income is from your savings or investment. Still working at the same time,earning from your saving interest.
-ASSET ALLOCATION STAGE,still working at the same time, earning a higher interest of 30-60% from your savings.
-RETIREMENT STAGE,not working but earning still. All of your money is taken from all of interest of your savings.
TWO KINDS OF INCOME
*ACTIVE INCOME, comes directly as a result of your own hard work,skills and time. If you retired and stop investing your time working hard then active income stops.
°ACTIVE INCOME should be use to FUND LIVING EXPENSES & FUND SAVINGS AND INVESTMENTS.
*PASSIVE INCOME,earning money not because of your skill and time, but because of generated earning from investment(bank interest,commission,etc.)
OBSTACLES IN YOUR FINANCIAL MANAGEMENT
1.NEGATIVE VALUES,example. Fear of failure-not exploring due to fear to loose. IN RETURN NOTING HAS BEEN DONE.
2.INFLATION, money is an asset that continuously loses value.
Example. Way back at the year 1990's your coin can buy a bottle of drink, Now your coin can only buy a piece of candy.
3.LAZINESS,being lazy is a disease that will make you financially poor by doing nothing.
4.PROCRASTINATION, putting off for tomorow is missing a good opportunity.
°Example, delaying savings decisions which can earn interest already if you decide earlier.
5.POOR SPENDING HABIT, spending a lot for new trends to fit in your self is a sample of poor spending. You choose to buy luxury car that needs a diseal ant maintenance fee over a bank savings which generates interest as time pass by.
INCREASING MONEY: BELIVE TO THIS 3 ALLY
-TIME, is your aces,because you have all the time to be a financial successful. Time is a resources, and all we have to do is find for perfect timing in investing.
~TIME IS MONEY~
-COMPOUND INTEREST,compound interest is man's greatest invention accd. A.EINSTEIN. Investments allowed to compound will help beat inflation.
-LEVERAGE,(good debt) allow you to earn through your "down lines" even with out being active in selling.
