Introduction
A couple of months ago, I already released a comic post about financial literacy, which in fact was the same thing that you will hear now. But since you ask that, and since you so much need to scroll through the channel, then okay. In this post, I will once again describe a couple of key principles of financial literacy. In simple words - how not to waste money, but slowly and confidently save up for your comfortable existence. Everything is as simple as 2 + 2. But for some reason, many people think that being financially literate is the lot of the superintelligence. No. You just need to have a bit of willpower, develop self-discipline and the right mindset. And then each of you will live happily ever after, and most importantly - not in poverty.
Profit
Financial literacy is not about high earnings. Even a millionaire can easily squander his entire fortune if he does not follow one golden rule - spend less than earn. Basically, that's all you need to do. Of course, this does not shine for the conventional homeless. But if you earn just enough to be enough for a living, then you can already think of something with this. For example, save somewhere and then your balance will already be a small plus. But for now, remember one simple formula.In this situation, consider that everything is already quite good for you. The negative state of affairs, unfortunately, is the most likely scenario for the majority of the average citizen. It's all about appetite and greed that push you to buy what you really can't afford. Such purchases and expenses result in loans and debts, which make your budget balance a priori negative. Well, at least in most cases, if these are not some kind of calculated business loans that are taken for reasonable purposes. And by the way, loans / debts are not always evil. You just need to distinguish between a loan for an iPhone for show-off, and a loan for a work computer, which is your tool for earning money. The ideal starting point for getting started as a financially literate person is zero debt. If there are debts,
Accounting
Unfortunately, our brains are far from modern computers in terms of computing power, so any financially literate person will need at least a piece of paper and a pen, or better, a free application for tracking personal budget. You must clearly record all personal finances - how much money you have and what (on the card, cash, in various assets), how much you spend (food, transport, entertainment) and your income. Here you can, of course, write a short extract from "Rich Dad, Poor Dad", about what "assets" and "liabilities" are. But I think most of you are young guys who live paycheck to paycheck, so there is no point in burdening your young brains with a stream of unnecessary information. In a nutshell, an asset is a thing that grows in value over time = generates income (profitable business, rented apartments, investments). Liabilities - on the contrary, those things, the value of which falls over time = makes a loss. (car, equipment, expensive clothes). The bottom line is to invest money in assets and give up liabilities. That is why all sorts of services like car sharing are gaining popularity, since society in the Internet era is becoming more financially literate, but not entirely. So, back to accounting. Why is it important? First of all, in order to understand what kind of ass you are in. Joke. You need to count money to plan your personal budget, as well as understand how much you can afford to spend. Well, the second reason is economy. When you see all the expenses on paper, or even better if they are sorted by category, you can understand what you can save on. to invest money in assets and abandon liabilities. That is why all sorts of services like car sharing are gaining popularity, since society in the Internet era is becoming more financially literate, but not entirely. So, back to accounting. Why is it important? First of all, in order to understand what kind of ass you are in. Joke. You need to count money to plan your personal budget, as well as understand how much you can afford to spend. Well, the second reason is economy. When you see all the expenses on paper, or even better if they are sorted by category, you can understand what you can save on. to invest money in assets and abandon liabilities. That is why all sorts of services like car sharing are gaining popularity, since society in the Internet era is becoming more financially literate, but not entirely. So, back to accounting. Why is it important? First of all, in order to understand what kind of ass you are in. Joke. You need to count money to plan your personal budget, as well as understand how much you can afford to spend. Well, the second reason is economy. When you see all the expenses on paper, or even better if they are sorted by category, you can understand what you can save on. Why is it important? First of all, in order to understand what kind of ass you are in. Joke. You need to count money to plan your personal budget, as well as understand how much you can afford to spend. Well, the second reason is economy. When you see all the expenses on paper, or even better if they are sorted by category, you can understand what you can save on. Why is it important? First of all, in order to understand what kind of ass you are in. Joke. You need to count money to plan your personal budget, as well as understand how much you can afford to spend. Well, the second reason is economy. When you see all the expenses on paper, or even better if they are sorted by category, you can understand what you can save on.Saving
Savings are pretty straightforward. There is one thing that cannot be economized on - this is health. And this category includes quality food and medical services. But here it is worthwhile to understand that healthy eating does not mean daily trips to the restaurant. Rather, it is about the fact that you cannot go to extremes and eat instant noodles in order to save a couple of cents on vegetables and milk. What I need to save on and what I personally save on are luxury goods. And I assure you, these are the things that bury people in a deep hole in debt. Of course, the attributes of the brand new Iphone and Mercedes are dictated by Instagram propaganda, but being on it is like shooting yourself in the foot. I have a rule that expensive purchases by type of car should not exceed 3 monthly salaries. And this was not my idea, this is an ancient pragmatic calculation. In order not to fool you for a long time, just analyze how much you spend on clothes, equipment, beauty and other services. Then think about which of these you can give up so that your quality of life does not deteriorate. Well, the third thing that most likely is not worth saving on is emotions. Traveling, spending time with dear people - these are important things without which the game is not worth the candle. This is the last thing to save on. spending time with dear people - these are important things without which the game is not worth the candle. This is the last thing to save on. spending time with dear people - these are important things without which the game is not worth the candle. This is the last thing to save on.
Investments
Okay, we have decided on the savings and now we have a positive balance. What's next? And then money should make money. And as you guessed, we will talk about investments. You must admit that it is stupid to keep money under your pillow and wait until it depreciates under the influence of inflation. The same passive. But living without a pillow is also kind of dumb. So I advise you to keep from 10 to 30% of your funds in cash (it doesn't matter if it's cash or a bank account). Moreover, it is very important to diversify and keep money in different currencies (dollar, euro), if we are talking about paper, or in different banks on different accounts. Well, as for investments, then there is already taste and color. For me, this is a crypt, but I also do not disdain stocks. If your capital is large enough, then you can think about real estate or your own business. In general, the secret to successful investment is not to keep all your eggs in one basket. This is due to the fact that financial markets are very volatile. At one point, they can devalue your dollar, apartment, or shares of a well-known bank. Therefore, if you focus on one thing, then you run the risk of losing everything. It is advisable to own both Bitcoin and Tesla, as well as a couple of apartments for rent and a small chain of coffee shops. But this is the ideal. For ordinary guys, here is my distribution recipe: 30% - cash, preferably in foreign currency, 30% - stocks and 30% - crypt, and another 10% should be regularly put aside for a dream, or the development of your own business. Subject to such proportions, you will receive passive income and in case of something an airbag is available. And, of course, you will be satisfied with yourself, since by regularly postponing until the start of an interesting project, you will feel
Outcome
In general, all this writing could not have been read, because all financial literacy comes down to these simple points:- Positive personal budget balance (income> expenses)
- Financial accounting, analysis of income and expenses, on the basis of which we understand where we do not earn enough, and where we spend more than necessary (luxury goods)
- Investments and diversification of deferred funds
That's all. I hope this post helped you and put all the points in terms of managing your money. You just need to do everything according to this simple instruction. And of course, fight yourself on a daily basis. Without this, nowhere.
