Things About Money You Must Know – If you barely have any money to your name but still end up with a heap load of expenses every other month this article is for you. If you are on a financial journey with defined goals, then this article is for you. If you want to learn more about money, this article is for you. If you just stumbled on this article by accident, it still is for you, so don’t close it yet, get ready to learn truths about the money you’ll wish you knew sooner! Now let’s begin shall, we?
Things About Money You Must Know
1. Spending Money Can Save You Money.
I know you are probably thinking, wait what? How does spending money save you money? Give us a minute to explain. See, when you spend money on the right things, it could save you a lot of money in the future. Sometimes spending more money can save you a heap load of additional costs in the future. For example, if Vanessa chooses to buy a $15 bag from China and by the way, no shade at all to Chinese products they have some legit items. And person Mary buys an original North Face backpack for sixty dollars. You’ll find that Vanessa will have to buy another bag before the year ends due to the wear and tear of the item, while Mary could use the bag for another couple of years.
Another example would be if one person opts for an all-inclusive medical cover and the other only for an in-patient medical cover. The person with the in-patient cover only will end up paying more money to the hospital for outpatient visits compared to the other one who pays a higher yearly insurance premium amount but incurs zero medical costs. By choosing a higher more costly insurance cover, this person ends up saving a lot of money!
I hope it makes sense now!
2. Investors stay Rich Borrowers Stay Poor
They say give a man a fish and he will come back for more, but teach him how to fish and he will sustain himself. The same applies to the concept of borrowing money. If you keep on taking loans and borrowing money you end up in a serious debt situation. What happens is you will take a loan to pay for whatever expenses, then take another to pay for more expenses, and when the last one is due you end up taking another loan. This cycle will keep going on and on until one day you realize you’re stuck in a trap where you have to borrow money to survive.
While taking up multiple loans can make you poor, such a lifestyle fills up the pockets of the rich. Most rich people will stash up some money in interest-earning saving accounts in banks. The same money is what the bank will use to loan people.
The people will then have to pay interest on the loans and some of that interest is deposited in the rich or anyone’s saving account. We aren’t saying you should never borrow money, but, only do it wisely. Borrow money to purchase assets that will appreciate, borrow money for your business and only borrow money that you can afford to pay back comfortably. The key here is first having a plan to pay back the money before you ever borrow a cent. If you always find yourself asking for a pay advance, this is a red flag and it probably means you are living above your means. You should limit the amount you borrow and instead look for small investments you can make to grow the little you may have.
3. No One Cares About You but The Money You Can Bring
For some people, this may be a hard pill to swallow, but it’s 100% true. Don’t lie to yourself that you are so important and your life matters so much to those around you! The reality is no one cares about you. Your boss sure doesn’t care about you, they only want to see the numbers you can bring in. Your employees don’t give a hoot about you they only want their paycheck at the end of the month. The investors you want to fund your business don’t care about you; they just want their money back with interest.
The government and all other politicians don’t care about you at all! you are only useful when it comes to voting and paying taxes. It’s a sad reality but what can you do?
All that everyone cares about is what you can do for them and the value you are bringing them. It could be your money, time, or even company. The only people who may care about you are your family and friends. Don’t take this personally! This applies to all of us myself included.
So, how does this relate to money? You see, to make a lot of money, you need to create some value in this world. Creating value is the only way to amass wealth, well, unless your parents are super rich and plan on leaving you an inheritance is in the millions. For most of us, we have to work to create wealth, the old fashion way; hard work! So back to the main point, If you’re an employee your priority is ensuring you do your job effectively while ensuring you are bringing maximum value to the company and keeping your boss happy at the same time. The reality is, most employers don’t care whether you’re a nice person or not, or how kind you are, they only care about how much value you bring to their business.
4. Your Friends and Family Won’t Pay You Back
Stop lending money to your friends and family. This is a tough one, saying no to people is frankly hard and it’s something a lot of people including myself still struggle with. I know of countless situations where a friend or one of my siblings would ask me for money, and because I don’t want to be rude or look selfish, out of guilt I would give them what they are asking for as long as it’s not an insane amount.
According to Finder.com, after surveying 1,417 participants on whether they had borrowed money from friends or family within the past 12 months, they found that more than 1 in 3 or 38% borrowed money from friends and family. And according to the same survey the borrowers stilled owed about $3,239 in loans to friends and family. So it’s unlikely that they’ll pay you back. And from my own experience, very few of them do. When any of my friends or family ask me for money I lend it to them, as long as it’s not a substantial amount with the acknowledgment that I probably won’t get it back. Money is a sensitive topic, it can easily divide families and break apart old friendships.
Whenever you’re dealing or transacting money with family or friends, be cautious. Money has a strange way of stirring and bringing the conflict to situations. If you are leading money, always find out why they need the money first before giving it to them.
It could be a serious need, or something trivial (in which case I wouldn’t give them the money).
Also, ask yourself can you afford to loan them the money and not have it repaid or will it affect your finances? Before you help a friend or family member, always make sure you are taking care of yourself first. Evaluate the risks because 80% of the time they won’t pay you back! Instead of giving them money, you can share with them some of our videos saving and making money.
5. It’s Harder to Stay Rich Than Becoming Rich
The Forbes world’s richest list looks similar every other year, right? To some extent this is true, but when we take away the common names, the Buffet, Bezos, Gates, you’ll be shocked at how often the list changes. At least 70% of the people on the list lose their status every other year. Most of them say getting rich is easier than staying rich. There are so many ways of getting rich, you can start a business, invest wisely, get lucky and win the lottery or inherit a ton of money. However, staying rich requires a few things that not everyone has, these include; modesty, self-awareness, and great discipline to say the least.
6. Time is Money
One of the biggest differences between the wealthy and the poor is that the latter don’t understand the finiteness and value of time. You see, money is entirely dependent on time management. Think about this, if every single decision you make in life is dictated by the need to protect your time and increase value output, you will certainly become rich at some point in life.
On the contrary, most people have zero regard for time management. A good example is; you will see people wait in line for hours to get a free burger. Many people trade their lives away stuck in a 9-5 job. People will waste hours waiting on Black Friday deals to save a couple of hundred bucks. You will often see people argue online over trivial matters.
These people don’t see the value in their time, and for those reasons, and of-course others the money trail won’t follow them.
Let’s see an example of how important using your time wisely could benefit you! Remember 2018 Coachella when Beyonce headlined the show and took the world by storm! She had to work continuously for ten hours a day for six months straight to perform as well as she did. She spent a significant amount of time practicing, just for one show performance. However, it earned her about $60 million. Now, that’s an exemplary use of time!
7. The Money you Have is a Direct Reflection of The Value Provided
This is painfully obvious! The amount of money you have either in savings, investments or earnings, is a direct reflection of what value you have added to the world or failed to create This is why people like Mark Cuban and Bill Gates are rich, they built companies that have created crazy amounts of value and have directly affected the lives of millions of people around the globe.
If you flip burgers all day, no matter how good you may be at it, you haven’t made a significant enough impact in the world, and as much as it hurts this will be reflected by the zeros or lack thereof, in your bank account.
We are not belittling anyone’s job. Everyone is important, but if you’re still working for minimum wage ten years later, you don’t understand how value and money works, and shortly don’t be surprised if you are replaced by a robot. Instead of being hurt and getting triggered, think about this equation: Making Money is equal to providing value, then seeing what value you can create in life.