Even the most successful business executives can fail in managing their personal finance. Not doing well on this area is not surprising. Financial literacy is not taught in schools. Robert Kiyosaki sees this as the primary reason why people are making wrong money decisions way into their adult lives.
Getting rich and acquiring wealth is just a matter of practicing healthy money habits. If there is the right way to do it (getting rich), there are sure-fire ways to struggle financially. So how not to get rich?
Note: changing how you think about money now can still recover the losses you incurred in the past. The key here is to confront your bad financial decisions and have the courage to plot a new course in money management.
Roll with the punches
In today’s global economic uncertainty you need to do more to safeguard your finances. Remember this is not just about you. Your family’s welfare is also at stake. What if you lose your job? What if you end up facing foreclosure? Do not wait until these will happen to you and you realize you have no existing plans to survive it all.
Write your plans in paper. How much do you plan to save every month? Do you want to pursue a business? When? How will you finance your business? What are your plans to pay for your kids’ college education? What kind of lifestyle do you want when you retire? Be very intentional on the details of your finances. The more thought you put into it the more refined your plans will be.
Whatever you do, do not just roll with the punches. Put up a credible fight for financial freedom!
Be content with savings
Saving is never enough. Leveraging your money to create wealth is the way to go if you want to maximize your earnings. Setting aside an amount and relying on the interests from the bank every month will never cut it. Inflation would easily eat up the meagre appreciation and you will end up wasting opportunities to grow your money because you are content with just “saving” money.
Look for great deals! Invest in stocks, buy properties and then earn from it. You can also use your savings to earn money from low risk businesses. Do what you can so that your money is working hard for you. Being content with savings will never work today. Leverage it for income instead.
Stay away from debts
Most people are afraid of debt and for good reason. But not all debts are the same. Swiping your card for the latest gadgets is bad debt. Securing a loan from the bank to buy a property that can give you positive cash flow is good debt. Self-paying loans are investments that can possibly give you passive income.
Do not stay away from all kinds of debts! Embrace good debts. Crunch the numbers, make sure you do the math, and if you can earn from a debt, take it and enjoy another income stream.
Use guesswork to track your spending
Unplanned spending is without a doubt the fastest way to financial doom. Create a budget and stick to it. Understand your cash flow, be very honest with your expenses, make sure to account all your liabilities. This is the first step towards financial freedom. You simply cannot be free from something you do not understand.
Live within your means, discipline yourself from excessive spending, and make sure you track your money. Where does it all go? Do the math, never guess. Having a solid understanding of your finances can help you spend better and save better.
Rely solely on your retirement plans
So you have your superannuation covered. Good. You are working for a handsome retirement fund. Sounds amazing. But the question is, when you retire, do you have complete control of your money? The answer is simple. No. You will be under the mercy of government regulation. You might have envisioned a nice retirement but with governments today trying harder to get hold of your money, you will eventually have less than what you need and want.
Invest in assets that can create good cash flow instead. One of the best ways to go about this is to put money in long-term investments, like real estate. Create a source of income that you have complete control even if you are retired. Work on building a healthy passive income so that when it is time to enjoy life, you can afford to do so.