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10 Basics Of Doing Well Financially

Having money is not all about earning large sums of money, however it is all about knowing how to manage it well.

Here are some basics of doing well with your money

1/ Work on growing your income.

The biggest holding in your portfolio is you- income that your career will generate over your lifetime. It’s easy to save money when you have a high income. You need money to make more money.

2/ Stay out of bad debt.

Debt has become easily accessible that it is ruining our future financial positions. People are buying things they can’t afford with money they don’t have to impress people they don’t like. Stay out of bad debt. Stop robbing money from your future self

3/ Have a high Savings rate.

You can build wealth without a high income, but you cannot build wealth without a high savings rate. It’s not how much you earn that matters, it’s how much you keep. Don’t save what is left after spending, spend what is left after saving.

4/ Budget your money.

If you do not tell your money where to go, you will always wonder where it went. If you do not budget your money, it will never be enough to cater for your needs. Impulse buying will always catch up with you.

5/ Keep track of your expenses.

Know where your money is going. “If you take care of the coins, the notes will take care of themselves.” We falsely assume that small expenses will not hurt our budgets until they accumulate to big amounts and do a lot of damage.

6/ Learn to be satisfied with less.

A high savings rate is only possible when you desire less. The only way to stay out of bad debt and to stick on your budget is by desiring less

7/ Buy Assets.

The rich buy assets, the poor buy liabilities. “Continually purchase a diverse set of income producing assets. Think of buying investments like you buy food- do it often. Make it a habit to invest your money like you make it a habit to pay your rent.”

8/ Be patient

“Time is the most powerful force in investing. It makes little things grow big and big mistakes fade away. It can’t neutralize luck and risk, but it pushes results closer towards what people deserve.”

9/ Spending is as important as saving

“Focus on maximizing your life enjoyment rather than on maximizing your wealth. Having money helps you achieve the more important goal of enjoying life. Trying to maximize money gets in the way of achieving the more important goal.”

10/ Money is never enough

“If expectations rise with results, there is no logic in striving for more because you’ll feel the same after putting in extra effort. It gets dangerous when the taste of having more money increases ambition faster than satisfaction.”

Courtesy of Gichuki Kahome

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