To be financially free comes with a big price, and most of it is centered on self-discipline, the ability of you to be in control of your emotions is a very great skill and does not come easy, it takes constant practice and tenacity to achieve the discipline that you need to handle finance. It entails you depriving yourself of some immediate pleasure for a future gain. The last statement shows that for you to be able to handle cash you must be a good visionary, because if you can’t envision the future, you won’t see the need to starve yourself of the little cares around you.
George Clason, a very prolific writer gave some of the disciplines one needs to practice in his book “The Richest Man In Babylon’’. It is a book more than fifty years old but because of the rich treasures embedded in its pages; it has being immortalized and have being a guiding principle to the rich. Because of the simplicity of his text we will be taking insight from his book, and as you read bear in mind these are the principles that made some people you admire today financially free:
Pay yourself first
One of the lessons learned from this book you should pay yourself first before spending. You can call it me tax If you like but you need to appreciate yourself for a job well done.
Live below your means
Controlling your expenditures enables us to make good use of the money we have left over after have paid ourselves. Budget your expenses so that you may have money for your enjoyment and to gratify your worthwhile desires without spending more than nine-tenth of your earnings. In his own words;” learn to live on 70% of your earning and save 30%”. This could vary with individuals but the least you should save is 30%.
Make your money work for you
This is more about investing your money and letting it work for you even though you’re not there.
Insurance Protects your wealth
This helps in safeguarding our wealth by absorbing potential loss and mitigating our financial situation. It is a proactive approach and one we should take and not forget.
Your home is your biggest expense
Your home is potentially the biggest expense you have to tackle and managing it smartly is something you have to learn in his own words; “own thy dwelling”.
Have a retirement plan
Setting aside money to be invested upon retirement is surely a smart thing to do. The earlier you start the retirement planning process, the better for you.
Invest in yourself
The best way to increase earnings is to invest in yourself; which is continually learning and striving to develop yourself and this has been made a lot easier since we’re in the information age where technology and information are readily available via the internet
Track your wealth
In order to know where you are financially, you need to face the truth of the current situation. It is done by tracking wealth and/or lack thereof. A major difference between wealthy people and those who are not is that wealthy people know their net worth while the poor do not pay particular attention nor care about their assets and liabilities.
Observe that from no 3 it involves you using your money, the problem most people have with saving is this; people save money only to use it on the mature toys I mentioned in our previous article, the essence of saving, is to invest the money on something worthwhile to bring back more cash for you, so money is basically a tool to work for you and not you working endlessly for. I will strongly recommend that we all should the text and read it, believe me when I say you will be very happy you did. This is where I leave you for today but I urge us all to practice these principle one at a time, don’t rush into practicing all you will get exhausted and probably crash on the way, start from baby strides before taking the giant steps. Like I always say, keep working towards success and I will definitely see you at the top.
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