5 Financial Advices You Never Heard in School

 

Invest time on Financial Education

We spent more than 10 years in learning academic subjects and don’t even allot 1 hour in reading books and attending seminars to gain financial education after we graduated from college. As a result, even if we have job and get promoted, we struggle financially. The first step to financial freedom is to learn.

 

Practice the Prosperity Formula

Millionaires believe in the “Pay Yourself First” concept. When they earn, they donate 10% of their income, set aside 20% as savings and spend what’s left, they budget 70% of their income.

 

Learn How Money Works

We cannot build wealth and retire at the age we wanted if we don’t know how money works. We can leverage if we know the power of compounding interest. You cannot build your retirement fund if you put it in a savings account in bank which gives only 0.20% rate of return (net of tax). There are investment facilities that can give you an average of 10% rate of return per year like mutual funds.

 

Increase your Cash Flow

If you don’t have enough cash to put in investments, even if you know the investment facilities, you cannot hit your financial goals. So discipline yourself to reduce your expenses. Don’t be an impulsive buyer.

Jim Rohn said:

“We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons.”

Build multiple income streams to increase your cash flow. Learn new skills and serve more to earn more.

 

Have Long-Term Financial Goals

Believe in the “Law of Sowing and Reaping”. Don’t save money because you want to spend it after 6 months for an expensive gadget. Don’t save money because you want to have a grand wedding after 1 year just to impress your friends. Money takes time to grow. Make sure to regularly save for the next 10 years to 20 years. If your goal is long-term, you can build wealth. This wealth will provide interest that will serve as your passive income. Passive income is permanent income. It comes even if you have already stopped working. When you have permanent income, you have option to quit your job and retire. When you have passive income, you can retain the lifestyle you have as if you have a job. Living on interest of your wealth is reaping what you sow in 10 years to 20 years of your life.