Use Money Wisely
- Date: 2007-02-15 - Word Count: 725
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There have been so many times that our paychecks don't really seem to cut it. Even if some of us are earning more than what others do, we still encounter the same problems. We don't seem to come up with enough money left after we pay all of our bills.
Even though a person has received a promotion and raise after working hard and dedicating himself to his work, he is still left with money not even enough to diversify his portfolio and invest on other endeavors to augment his cash flow and assets. Perplexing as it may seem, there is a sound reason for that.
One of the major reasons is that the more we earn, the more we spend. Because we know we can now afford something we have always dreamt of having, we readily go out and buy it. The satisfaction of knowing that we can now afford to buy what we want spurs more urges to work harder, get more raise and buy more things. This is how poor people think.
Rich persons, on the other hand, do the opposite. The more money they earn means more money to put in their cash flow for investments. They are reluctant to purchase anything that can not be considered as an asset. Their money would just be standing in one corner and it might entail more costs.
This is where it gets confusing. What can one consider as an asset and as a liability? Robert Kiyosaki in his book "Rich Dad Poor Dad" simply states that every property that you have that provides a cash flow is an asset and everything that doesn't is a liability.
For instance, your home and your personal car is not an asset. This is because they require costs and maintenance. They don't provide cash flow but otherwise expenses. These though are liabilities that are acceptable. But we have to consider cutting or maintaining our liabilities to the minimum basic needs.
If we want to make it big, we should devote our time, efforts, and assets to grabbing more investment opportunities and find ways to increase our assets more. This is where a good financial education comes in. Through this, we will know which risks to take and how to find ways to finance our entrepreneurial endeavors.
This doesn't mean though that you have to live like a scrooge. There are also many ways where we can earn money while we spend. Yes, that's true, we can earn more when we spend more. But once again, this doesn't mean we have to splurge on everything that we see. We should be spending wisely.
What this means is that when we spend money for our basic and essential needs, we should incorporate methods where in we would be able to save our money. The more we save on what we spend, the more we earn more money. For instance, when we do our groceries, we can spend the same amount as we used to before, but we can also save some money, which means that we cut down our previous costs. What we save from those costs can be deemed as earnings as well.
How do we do this? There are countless ways. One of which is through our credit cards. We have heard a lot of horror stories wherein people get into huge debts because of going wild with their credit cards, that's why many financial advisers condemn credit cards. This is true, but only to those people who can't seem to control themselves.
But if you look closely, there are many credit cards that offer many promos and discounts. Having at least two credit cards would allow you to use your cards alternately depending on which one would be sending you the bill at the last possible time. Through this, you will be able to use your money in other endeavors before having to pay for them.
With many rewards being offered by different credit card companies these days, you can be able to use them to your advantage. Just remember to always watch out for the interest rates and calculate first your costs. What may seem as a sweet promise may bring about a bitter end.
It is important to use Money Wisely, to be successful financially.
To your success,
Ada
Check on an Automated Money Maker program at http://www.preenroller.com/activelifelearner
Get free access to learn from Successful Gurus at www.activelifelearner.com
Even though a person has received a promotion and raise after working hard and dedicating himself to his work, he is still left with money not even enough to diversify his portfolio and invest on other endeavors to augment his cash flow and assets. Perplexing as it may seem, there is a sound reason for that.
One of the major reasons is that the more we earn, the more we spend. Because we know we can now afford something we have always dreamt of having, we readily go out and buy it. The satisfaction of knowing that we can now afford to buy what we want spurs more urges to work harder, get more raise and buy more things. This is how poor people think.
Rich persons, on the other hand, do the opposite. The more money they earn means more money to put in their cash flow for investments. They are reluctant to purchase anything that can not be considered as an asset. Their money would just be standing in one corner and it might entail more costs.
This is where it gets confusing. What can one consider as an asset and as a liability? Robert Kiyosaki in his book "Rich Dad Poor Dad" simply states that every property that you have that provides a cash flow is an asset and everything that doesn't is a liability.
For instance, your home and your personal car is not an asset. This is because they require costs and maintenance. They don't provide cash flow but otherwise expenses. These though are liabilities that are acceptable. But we have to consider cutting or maintaining our liabilities to the minimum basic needs.
If we want to make it big, we should devote our time, efforts, and assets to grabbing more investment opportunities and find ways to increase our assets more. This is where a good financial education comes in. Through this, we will know which risks to take and how to find ways to finance our entrepreneurial endeavors.
This doesn't mean though that you have to live like a scrooge. There are also many ways where we can earn money while we spend. Yes, that's true, we can earn more when we spend more. But once again, this doesn't mean we have to splurge on everything that we see. We should be spending wisely.
What this means is that when we spend money for our basic and essential needs, we should incorporate methods where in we would be able to save our money. The more we save on what we spend, the more we earn more money. For instance, when we do our groceries, we can spend the same amount as we used to before, but we can also save some money, which means that we cut down our previous costs. What we save from those costs can be deemed as earnings as well.
How do we do this? There are countless ways. One of which is through our credit cards. We have heard a lot of horror stories wherein people get into huge debts because of going wild with their credit cards, that's why many financial advisers condemn credit cards. This is true, but only to those people who can't seem to control themselves.
But if you look closely, there are many credit cards that offer many promos and discounts. Having at least two credit cards would allow you to use your cards alternately depending on which one would be sending you the bill at the last possible time. Through this, you will be able to use your money in other endeavors before having to pay for them.
With many rewards being offered by different credit card companies these days, you can be able to use them to your advantage. Just remember to always watch out for the interest rates and calculate first your costs. What may seem as a sweet promise may bring about a bitter end.
It is important to use Money Wisely, to be successful financially.
To your success,
Ada
Check on an Automated Money Maker program at http://www.preenroller.com/activelifelearner
Get free access to learn from Successful Gurus at www.activelifelearner.com
Related Tags: money, financial, robert kiyosaki, rich dad
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