Simplified Personal Finance: Exact Steps on Actually How to Make Rich Fortune
Introduction
In our quest for financial prosperity, it's imperative to chart a course that aligns with our aspirations. The key lies in adopting a simplified approach to personal finance, an approach grounded in tangible steps that pave the way to a truly rich fortune. This article delves into the intricacies of simplified personal finance powered by my skin in the game, offering exact steps to guide you on the journey to lasting financial success.
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| Doing and enjoying personal finance is crucial, because it's personal, it's about us |
Exact Steps That I'm Following & Will Continue to Follow
1. Primary Ingredient - Earn Money: To embark on a journey toward wealth, one must first lay a solid foundation. This begins with earning money! Grab whatever opportunity life grants You and start building Your corpus from scratch. Keep saving a slightly uncomfortable sum of money from your income, each month to build Your savings corpus. Make it fun, watch the numbers gradually build up. Slightly uncomfy allocation of money to savings will check your expenses and reduce your desires. This will continue upto a point whereafter You cannot cut out any bigger a chunk from your income. The absolute barebones that will remain thereafter is Your monthly needs expense amount. Congratulations!
2. Self-Control & Postponed Enjoyment: This evokes a strong rebellion from within You. Won't I buy anything I like?!! You will definitely but not now. Desires give you temporary satisfaction and the high feeling wanes out, causing You to chase another desire. Desire gives pleasure and pleasure is short-lived. This cycle is vicious. You lose money in every cycle and in the end lose Your peace. There is zero fulfillment in this cycle. What we want is money and fulfillment, not losing of either one, which happens in a virtuous cycle. Choose between the two: Capital expense+Instant enjoyment+short-lived pleasure or Capital growth+delayed enjoyment+long-lived satisfaction.
3. A Continuous Learning Odyssey: In the world of finance, knowledge is power. Successful individuals commit themselves to continuous learning, staying abreast of market trends, financial instruments, and emerging opportunities. This ongoing education empowers you to make informed decisions, adapt to economic shifts, and capitalize on potential financial windfalls. Keep learning how to grow money by various ethical alternate means and how to preserve money. This is called individual research and analytics. It's intensely positively addictive and fun! Very few talk about money preservation. It's your hard earned money, my dear friend. Invest so much in your financial education, that Your intelligence bubbles with ideas of growing and preserving money all the time. When You reach this stage, Congratulations! my friend, You are living the consciousness of wealth. The mantra here is clear – no excuses, power up, and stay active in your financial education. Frequently visit finaxfree.blogspot.com. Clarify your why's. Learn about financial systems, businesses, investments, taxes and more along the way.
4. Emergency Fund - Your Financial Safety Net: Life's unpredictability necessitates the creation and maintenance of an emergency fund. This financial cushion provides reassurance during unforeseen expenses or income disruptions, ensuring that you weather financial storms without compromising your long-term goals. Cultivate the peace of mind that comes with knowing you have a constant or growing financial backing, starting this very moment. This is a repeated statement I make often, with emphasis. An emergency fund (You can name it Your own!) is a fund which should be easily withdrawable at the earliest but shouldn't be touched at all at any cost, unless an emergency arises. This fund should be kept fuelling and You should be able to see that it is growing gradually. The point is: at the back of your mind You will have a feeling that whatever I spend from my expense account for my needs, there is a certain pool of money, ever enlarging with time. The fun and peace of mind that gradually builds up, oh my! I strongly urge You, my friend. Get going!
5. Investments: Now there is a thing called compound interest. If I told You that:
- keep $100 in a box
- at the end of the year it will become $108
- keep that $108 inside the box for another year
- at the end of the 2nd year it will become $116
and in another case:
- keep $100 in a jar
- at the end of the year it will become $108
- keep that $108 inside the jar for another year
- at the end of the 2nd year it will become $116.64
which of the box or jar would You choose to keep Your money into? Ofcourse the jar! This has evoked your curiosity. However the jar will give only $0.64 extra at the end of the 2nd year. Now consider this final case:
- keep $100 in a box
- at the end of the year it will become $108
- keep that $108 inside the box for another 9 years
- at the end of 10th year it will become $180
and in another case:
- keep $100 in a jar
- at the end of the year it will become $108
- keep that $108 inside the jar for another 9 years
- at the end of the 10th year it will become $215.89
You would run for the jar now. The box is harnessing the system of simple interest wheareas the jar is harnessing the system of compound interest. For a longer term, compound interest shows it's might whereas in the short-term it's not much effective. The only way You will stick in the longer run like wealthy individuals, is self-control and postponed enjoyment. Can You see the great fun that comes in life with self-control and restricted impulsive spending? This is what happens in investments. There are a variety of investment options, which allow You to put Your money into and let it grow over time. We will create clear cut content on simple interest, compound interest and investments in upcoming brand-new articles. Stay fired up!
6. Inflation: It's an economic phenomenon wherein the value of money degrades over time. Suppose You have $50 now in 2023 and can buy a portable bluetooth speaker Considering 3.5% U.S. inflation rate, in 2033, the money's value will become $141.80 as of today's value. That is, in 2033, to buy the same portable bluetooth speaker, You have to spend $141.80 (or in other words we can say, in 2033 You will get a proportional 70.53% fraction of the speaker at $100, which is funny!) That means, if Your present lifestyle cost per month is $3000, in 2033, to fund the same lifestyle, You have to spend $4231.80 (or in other words we can say, in 2033 You will live a proportional 70.9% fraction of your current lifestyle at $3000, which is sure to skip Your heartbeat!) . Did it strike You? It did strike me. Learn about it, contemplate about it. Your money's value is eroding with time. Inflation is every sincere financial freedom seeker's great enemy. We have to rise over it or use it to our advantage with our uniquely personal brainstorming.
7. Taxes: Taxes are important for the functioning of the economy and is it's lifeline. However it is felt by everyone at times that taxes are eating away our hard earned capital. Therefore ways to save taxes should be learnt and researched.
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Key Takeaways For You
Conclusion
Not a single word is carelessly used in this post (not even the affiliate product links! that help us if You wish to purchase from it, any no additional cost to You 😊). The path to financial success is illuminated by intentional actions and strategic decisions. Prioritizing financial health is an ongoing commitment that demands diligence, education, making right choices at the opportune moment and adaptability. By embracing these habits—laying a solid foundation, investing wisely, staying informed, managing debt, setting clear goals, and conducting regular financial check-ins—you not only pave your way to financial freedom but also enjoy the peace of mind that accompanies capable financial stewardship. Remember, making it fun is the final ingredient in this recipe for lasting prosperity.
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