Just like life, money is unfair too. Sometimes you have tons of cash, while at times your pocket is empty. Have you ever wondered why this happens? Have you ever paid close attention to how money enters in your wallet and slips away from your hands? If not, we hope to make you think this, through our today’s article.
Well, there are some money rules that one should learn that will help in making money and lead to the path of a worry-free financial life. If you respect money and play the game of money by knowing these rules, you will see a world of abundant wealth and will make money work for you rather than working for it, as famously said by Mr. Robert Kiyosaki, the renowned author of Rich Dad Poor Dad. So, it’s essential to learn the rules of money to become financially secure in life.
So, here are the golden rules of money.
1. Pay yourself first
This is one of the oldest rules of personal finance. I know you must have read this in many money books or heard it as advice from someone, but when it comes to following this rule, we all forget and mostly fail. To pay yourself first simply means that before you pay your bills before you spend your money on anything else, you should set aside a portion of your income to save. The primary purpose of this rule is to instil the habit of saving, which would eventually turn into a routine for you. The first bill that you pay or the pennies that you spend each month should be to yourself. It’s not how much you make, but how much you save. So, if you develop the savings habit early, it can help you build tremendous wealth.
2. Learn how to invest
Before you invest your money, you should gain knowledge of how investing works. Investing is essential to multiply your money and make your money work for you. Hence, the time that you will spend on learning how to invest money will all be worth in the long run. Learn about the different ways of investing and explore investment avenues. Gain knowledge about the stock market, mutual funds, etc. Investing helps to grow your money, and achieve your financial goals such as Retirement, Marriage, Child Education, etc. But most importantly, remember, investing doesn’t always require a large sum of money to start.
3. Spend less than you earn
Spending less money than you earn will help you have more money in your piggy bank. It is one of the significant rules of money. The purpose of this rule is to live below your means. It can be done by cutting down unnecessary expenses and being smart about your spending. The best way to improve your spending habit is by creating a budget. A budget allows you to spend mindfully by determining where you want your money to go. Budget will help you to control your money while dealing with it and handle your money well.
4. Avoid Debt
Avoiding debt is one of the keys to becoming rich. There’s nothing wrong with borrowing money. If you want to buy a home, invest in education or start a business, it’s often necessary and smart to take on debt. Those are generally classified as good debt because they can go up in value. But we must be wise about taking on debt. Never borrow money to buy a car, electronics gadget, or anything else that goes down in value. Such things lose value very quickly. So never go into debt for depreciating assets. Before you go into debt, always think carefully. Remember that borrowing money is not free.
5. Know how money functions and economy works
Along with applying all the above rules, acquire the basic knowledge of how money functions and economy works. Why money exists? Who prints money? How the inflation and interest rate move up and down? Why do markets generally collapse? You don’t have to be an Economist here, but it’s good to learn the know-how of money and economy. Remember, your knowledge about money will help you in getting rich and help you always stay wealthy and financially free.
So, if you want to use the money to your advantage, you must learn and follow the above listed golden rules of money to become rich and most importantly attain financial freedom.
Ekvity Ventures LLP is a leading financial services provider that mainly emphasizes on Tailor-made solutions in the areas of Unlisted/Pre-IPO shares, Wealth Management, Insurance Planning and Mutual Funds.
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