Monthly Archives: February 2016

Tips to be a rich person

images (15)It has more to do with your attitude toward money.Just think of those who don’t fit the filthy-rich stereotype. People like Warren Buffett.As explained in the book The Millionaire Next Door by Thomas J. Stanley and William D. Danko, personal finance has as much to do with people’s traits as it does with money. Many millionaires, in fact, have frugal ways.Understanding how personal traits can influence your finances is an essential ingredient for building wealth.Here are 10 key traits:

1. Patience

Patience is one of the most important traits when it comes to saving money.This means waiting until the first wave of product hype has passed, keeping a car for an extra few years before getting another one and waiting until something you want fits into your budget instead of putting it on credit.Patience is often the difference between creating savings and being in debt. Having the patience to wait until you find a good deal is a cornerstone of good finances.

2. Satisfaction

When you’re satisfied, there is no reason to spend money on nonessentials. The sole purpose of commercials is to make you believe that buying a product or service will make you happier, wealthier, better looking or improve whatever isn’t bringing you satisfaction.People spend because they want to capture the excitement shown in advertisements. When you are satisfied with what you have and your life (not trying to live like those on TV), your finances will be in a lot better shape.

3. Organization

Being organized can make you more productive and ensure that all the many issues pertaining to personal finances are addressed.It means not paying late fees, not buying two of everything, knowing deadlines that can affect your finances and getting more done in less time. All these can greatly benefit your finances.

4. Discipline

You need the discipline to continue to save money for specific, long-term goals every month. Personal finance isn’t a way to get rich quick, but is a disciplined execution of your lifetime plans.

5. Reflectiveness

It’s important to be able to look at your financial decisions and reflect on their results. You’re going to make financial mistakes. Everyone does. The key is to learn from those mistakes so you don’t make them again, or recognize if you keep repeating them.

6. Creativity

The economy and our earnings don’t always match our expectations.Unexpected developments wreak havoc to elaborate financial plans. When this happens, changes are needed to deal with the new circumstances. Creativity is essential to accomplish this.Creativity allows you to make something last longer rather than purchasing it when you don’t have the money. It means juggling money to stay out of debt rather than simply paying with a credit card. It means finding a cheaper alternative when money is tight.In these ways, creativity plays a large role in keeping finances in order.

7. Curiosity

Having curiosity helps you learn, study and improve yourself.The curiosity of wanting to know more, to take the time to study and then take what is learned and put into practice is an important process that is driven by curiosity.

8. Risk-Taking

To build wealth, one needs to be willing to take risks. This doesn’t mean uncalculated risks. It means weighing all the options and taking calculated risks when appropriate.The stock market has risks involved, but over the long term, history shows that it provides good returns on money that is invested wisely. Those who fear risk altogether end up saving money in accounts that likely lose money to inflation in the long run.

9. Goal-Oriented

The importance of setting and working toward goals is obvious. If you don’t know where you are going, it’s difficult to get there. It helps your personal finances immensely if you have money goals and are motivated to reach the goals that you have set for yourself.Those who lack goals don’t have a road map to take them to the financial destination they want.

10. Hard- and Smart Working

Creating wealth and staying out of debt rarely comes about without a lot of hard work.Many people might hope that the lottery will solve all their financial problems. The true path to financial freedom, however, is to work hard to earn money while educating yourself to continue to have more value and increase your salary.You may not possess all of the above traits. But knowing them can help you make changes so that you nourish the ones that you have and obtain the ones you’re missing.

How to Be Richer In Your Life

The basics are so simple that anyone can get the concepts down in less than a day 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 thing. That still doesn’t keep millions of people from racking up credit-card debt.

1. Money Doesn’t Buy Happiness

I knew this in my heart when I was younger. After all, who can’t hum the tune of the Beatles song Can’t Buy Me Love?But my head often countered it in real life. It took me several years of working in a large corporation making good money, but not enjoying my job, to finally get it through my head that money in itself does not make you happy, and the accumulation of money will do very little for your happiness unless you know how to use that money once you have it.The happiness comes from the opportunities money makes available so that you can do the things that you want to do. If you have no idea what these things are, no amount of money will make you happy.

2. Goals Are the Key

I didn’t begin to make specific financial goals until my early 30s, and it kills me that I lost 10 years in this department.The old saying that if you don’t know where you’re going, it’s difficult to get there is never more true with your financial goals. It wasn’t until I took the time to write down my financial goals in detail that I began to find financial success.Financial goals give you something to strive for and give you clear knowledge on how you want to spend the money that you earn. They also greatly help you avoid impulse purchases and spending money on things that aren’t important.

3. Impulse Purchases Dash Dreams

I spent more money on more crap coming out of college than I would ever care to admit.Impulse spending (or spending money on anything that isn’t important to you and your goals) is the worst type of spending that you can do, yet this is how most people spend their money when they don’t have financial goals.It’s especially destructive if it also leads to credit-card debt. Impulse purchases come about when you aren’t really sure what you want in your life or what will make you happy.This is why advertising is so effective. Advertisements make you believe that buying a product or service will give you the happiness that you are seeking, when this is rarely the case.If you can learn to be patient with your money and avoid impulse purchases by knowing what your financial goals are, you will have made major strides in getting your finances in order.

4. Buy Memories, Not Things

A big con our society plays on us is that stuff will make us happy.I fell for it for far too long.When it comes to spending the money that you do have, buying experiences and memories with those whom you care about is a much better use of your money than purchasing material things. It’s not the house that you buy, but the home that you make with your family inside it that matters.When you look back on your life, you will remember the times, memories and experiences far above the things that you have purchased.Understanding this will ensure that you get much more value out of the money you spend.

5. TV Is a Dream Killer

I once believed that I didn’t have the time to do all I wanted to do, but it was nothing more than having poor priorities in how I spent my time, watching TV being one of those poor choices.I hear time and again that people simply don’t have the time to achieve the goals that they have. If you are the average person, that time you don’t have is being spent in front of your TV. If you want to achieve your goals and dreams, the first thing to do is start to wean yourself off your TV.You can’t imagine the amount of extra time that you have and all the extra things that you can accomplish when you take the time spent in front of the TV (or computer or whatever other form of procrastination you use) to work on the financial and other goals that you have.

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.I wish I had seen this seduction for what it was right out of college rather than four years into a career that wasn’t what I wanted to be doing.

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.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 make any mistakes at all over never learn from them.

Money In Secret That You should Know It

The basics go well beyond being able to open up a bank account or get a job. They entail knowing how to make a wide variety of financial decisions throughout your life. Understanding and applying these financial basics to the money you earn is likely to make you wealthy. Not having a grasp of them can leave you in a perpetual financial bind. Here are the 10 essential financial basics:

1. Credit Cards

In today’s world of credit, it’s vital to understand credit card basics. Credit cards can be an asset or a liability depending on how you use them.Learning the basics of how credit cards work — and how you can use them to your advantage, while not using them when they aren’t to your advantage — is one of the most important financial lessons that you can master to ensure that your finances stay in order.

2. Compound Interest

To grasp the full potential and power of investing, you need to understand how compound interest works and what it can do over time. Save $150 a month (approx $5 a day) without compound interest, and in 30 years you’ll have $54,000.Save the same amount with a return of 9% compounded interest and you’ll have nearly $275,000 after the same 30 years. When you understand the fundamentals of compound interest and time working together, you see how saving even small amounts for your retirement years can have a huge effect.

3. Risk

When it comes to finances and trying to grow the money you have, there will always be risk involved. Understanding that risk is part of investing, and you can greatly increase your wealty by taking calculated risks to correspond with different points in your. At the same time, being too risk adverse or taking huge risks with your money in an attempt to get rich quick will likely leave you retirement-poor.

4. Retirement Vehicles

The government provides a number of retirement vehicles that allow you to invest with tax advantages to encourage you to save money for your retirement. These include 401(k)s and IRAs, which can mean the difference between not being able to retire and retiring in the lifestyle you desire. Understanding how these tools work to your benefit and taking advantage of them to save money tax-free is an essential part of basic financial literacy.

5. Index Funds

When it comes to investing, the first and most basic strategy you need to understand is stock index funds. Over time, you will need to learn many other aspects of investing, but understanding stock index funds is the first fundamental part of using the stock market to grow wealth.It is a simple and cost-efficient way to get into the stock market when you may not have a lot of money or time to spend on investing, but it allows you to take full advantage of the compound interest discussed above.

6. Housing and Mortgage

It is important to understand the basics of housing and how mortgages work. For all of those who have been caught in the subprime mortgage crisis, this is one crucial financial lesson that they had not learned.As the number of different mortgages available to borrowers increases, understanding how these new mortgages work becomes even more essential. It’s important to remember that housing prices don’t always go up, and that you need to make sure that mortgage debt is not only affordable on a monthly basis, but also affordable over the life of the mortgage loan.

7. Taxes

Although they can seem completely overwhelming and incomprehensible, understanding the basics of how taxes work is important. By understanding the basics, you can make moves in your daily life that will actually save you money over the long term. It will also help you determine what documents and receipts you need to keep track of that can reduce your taxes over time.

8. Emergency Fund

Life will always throw unexpected curves into even the best laid plans, and realizing that this is likely to happen and being prepared with an emergency fund is an essential part of your financial literacy.Unexpected financial losses can occur, and having an available resource for these emergencies can be the difference between remaining financially healthy and finding yourself financially struggling.