*How to Save Money*
Make money work for you Most people work for money while the rich make money to work for them this is one of the most important lessons you can get from rich dad & poor dad. the difference between rich people and those in the middle and working class is their perspective on money in general those with lower finances go to school to pursue an education that can land them decent paying jobs they work a nine to five job throughout their lives.
And work even harder to climb up the corporate ladder to earn more money This is a more convenient situation for most people because they need a stable job to survive not all people are willing to take risks because they are afraid to lose their only source of income they then end up working for money until they run out of time and in the end they still haven’t made enough.
“Whereas rich people become and remain rich because they made the money work for them What does this mean”
Whereas rich people become and remain rich because they made the money work for them What does this mean? It means buying assets that can generate income for you these assets include stocks bonds and most especially real estate this sounds like a great financial risk for most people in the working class and most are not willing to take them but this is one of the secrets of how rich people become and remain rich If you remain in one job your whole life working for other people you will continue to struggle financially whereas investing in income generating assets will help you save up more quickly as you have another source of income other than your regular job early retirement might not be so impossible at all.
“Six.Financial education is your greatest asset “
Six.Financial education is your greatest asset if you think money is your greatest asset then you are mistaken it is not the money but your mind that will help you generate more income Financial education is your key to wealth having the money does not automatically solve all your problems money is nothing if you do not know how to make them flow the rich became rich and stayed rich because they knew how to keep their cash flowing.
How many people have won the lottery then gone back to being broke after several years….
How many people have won the lottery then gone back to being broke after several years because they do not know how to handle their finances how many people fail with their investments because they do not know anything about marketing and sales. Some people have great ideas for business but fail to enact them because they know nothing about building one.
That is why the next tip is to work to learn and gain experience and not just to earn. Five. Don’t work for money work to learn People tend to focus on a specialization for a job that they will have for a lifetime they think this is enough as long as they have an income to pay their bills, but you should start changing your perspective about work when you work you should not do.
It solely for the money you should use your work as a platform to improve and learn more skills that you can use to improve your finances Find a job where you can learn about investing marketing accounting networking and public speaking you can use these skills to explore more opportunities to earn money and build up your finances investing and marketing For one will help you learn about the market.
And get more business ideas and opportunities accounting will help you manage your finances better and help you track where your cash flows and public speaking and communication will help you communicate your ideas more effectively and build networks with other people the more skills you have the wider business opportunities you will get to explore and with such a wide niche you can save up quickly Four.
Know the difference between asset and liability Rich dad Poor dad…..
Know the difference between asset and liability Rich dad Poor dad emphasizes the importance of knowing the difference between an asset and a liability an asset makes money for you but a liability is something that takes money out of your pocket assets add to your income while liabilities add to your expenses in that sense your goal should be to spend your money on assets and not liabilities take a car for example a car is an example of a liability because it does.
It will not add anything to your income
It will not add anything to your income even if you already paid it off you will still have to spend money on its maintenance and repair on the other hand an example of an asset that is great to have and invest in is real estate investing in real estate can help you generate more income quickly You can start from a small property then trade up to larger properties.
or you can rent out a small house to tenants and collect rental payments over time your income generating assets will give you a much higher income compared to your regular job the point is to know the main difference between an asset and liability can better guide you on what things to invest in and how to handle your finances.
Three. Pay yourself first paying yourself means setting aside a portion of your income for yourself before paying anything else this is one of the harder tips to follow but this is also what separates the rich from most people most people are used to budgeting their income by paying their bills first then the rest that’s left is what goes to other things in their savings this is reasonable for most people especially for those who rely on each paycheck to get by however.
if your goal is to save up and generate wealth the conventional way will not work because what happens after paying all your bills and expenses is that there’s barely anything left for your savings the amount would often be too small or nothing at all when there are unexpected expenses That is why you need to start paying yourself first add your pay to yourself to the expenses you need to cover every month keep a portion of your income for yourself even when.
it is difficult to do and it seems unreasonable then use the money that you paid yourself to invest or save it up to purchase more income generating assets this would give you a better cash flow over time if you’d like to know more about this concept of paying yourself Two. Reduce your expenses One of the most basic tips for you to save up quickly is to reduce your spending as much as possible when you reduce your expenses you have a smaller bill due at the end of each month so you have more money to keep for your savings and investments it is quite a simple tip but hard to do more.
So if you are used to spending your money freely But if you want to save up quickly you need to take better control of your spending habits and finances the key is to live and spend within your means learn to prioritize your needs and don’t impulsively give in to your wants buy only things that you actually need around the house you can cook at home instead of eating outside brew your coffee instead of buying an overpriced one look for better deals in the market to cut down your expenses You also do not need to have the latest gadget or the fanciest car remember that you must spend on assets and not liabilities.
If something does not generate any income for you then you might not necessarily need it it is good to reward yourself by buying nice things once in a while but you must also think about your long-term goal that is to save up and improve your financial situation and to do this you need to be in control of your money and live frugally because overspending will often lead to bad debts You have to know not all debts are bad debts getting a mortgage to buy an income generating property for example is good debt but when you overspend and end up having a high credit card debt that is bad debt reduce your spending and swipe your credit card less do not overspend even.
If you have the money in your account to cover the cost And lastly, sometimes what’s holding you back is yourself Rich dad Poor dad stated the main reasons why broke people stay broke these include fear cynicism laziness bad habits and arrogance you need to overcome these obstacles to reach your goal most people get stuck because of fear and cynicism they are afraid to take some risks because they are afraid to lose money but not taking any risk often means you are missing out on more opportunities successful people know that opportunities lie beyond their comfort zone nobody succeeds by staying afraid laziness and bad habits will also drag you down.
overcome and change your spending habits Try to be a little greedy there is nothing wrong with wanting something more make it your motivation how will you be able to afford it and do not be arrogant arrogance