Financial basics, getting back to it sometimes makes any sense for us. Losing sight to simple things is easy when it comes to our finances. In fact, we start focusing on much complex methods for us to grow our wealth or getting involved on latest fad.
But the reality here is that, basic is the main foundation for our long term wealth.
The point is, before getting on the advanced items, you need to look back these five rules that we believed critical for you in growing your wealth over the next years.
1. Spend less and earn more
We believed that this is the main foundation in all of our financial advice. To tell you frankly, if these advice was being followed by people, to tell you, debt will not be an issue or if there is it would not be as much as what you have now.
Not just we, but everyone in the community “knows” the significance of earning more as to spending more every month. But the sad part, the statement “spend less and earn more” seems to be easy to say but difficult to execute.
If you want your wealth to grow in the long run, then your earning should be greater than the amount of money you frequently spend.
That’s a basic rule, but it creates a huge impact. So if you overrun income each payday, you need to earn more money or cut unwanted spending.
2. Prepared for Unforeseen Emergencies
“Life is a surprise”, we don’t know what can happen in the next hour or next day. The idea here is to prepare for emergency, no matter how it is.
This means that you need to set aside emergency funds, liquid assets, foods and supplies. You should be prepared for life surprise. So in time of trouble and you have emergency backup, this will reduce debt after the jam.
3. Protect Assets
You should protect things that you have. Getting an insurance policy will do. They can help you in case of unexpected jam in your life. We suggest that you should insure your car, your home and even family health.
If you have much extra, you can also acquire disability insurance. All these policies will protect not just your assets but including yourself and family in times of financial catastrophe.
Sometime you should grab opportunities, keeping your money in a bank with “high-yield” interest in savings account is not going to help you build a long term wealth.
Getting started with investment is not that hard.
You can even begin with little amount example $30 on a broker online. Over time, it can also be a good vehicle for you to build wealth.
5. Develop Yourself
Most people are missing this out, “investing on your personal growth”.
Many wealthy people in our world take time to be inform, learning new things and developing potential skills.
Meaning learning is a continuous process, it does not stop there after school.
If you want to boss earning, learn new methods in managing your funds effectively or develop a good idea for you to start a business, investing to yourself is important.