Written by: Ketan Kulkarni
Money is here to stay! It’s among the most discussed topic in the world! They say money makes the world go around! It’s something you simply can’t avoid unless you live completely off the grid! It just means that money is a necessity. It’s the key to living life on your own terms and simply cannot be neglected.
But when asked about money many people often (i) avoid the topic (ii) or think about what they don’t have (iii) think about how they can be strive to make more (iv) hate their current financial situation or (v) simply discuss how they can’t have what they want! Some other people simply show their resentment towards money or even despise money as root cause of all evil.
We have discussed mastering money before. And a lot of people find wasting money hard. They feel like they are drowning in the sea of financial literacy.
People say that they don’t have the time. They don’t have the interest. They don’t have the capacity. They would rather prefer is someone else manages their money. They don’t want to do it. Its not their priority. They have tried and failed. They don’t understand what to do. They are too scared. They don’t know who to trust. They don’t understand the money jargon. They claim they don’t have the mindset. Some say money isn’t important. They find it just too hard!! And there are millions of reasons why they don’t do it.
So many people shy away from excellent money management and continue to have low financial literacy. We discussed a number of financial myths previously.
But does financial literacy have to be hard?
Not really. A few basic steps can catapult us toward financial literacy.
Get started, no matter where you are today!
Simply start… That’s the most important thing. Don’t delay. It is really important to get started as soon as you can on your path of financial mastery. The further you delay, the harder it gets and the longer it takes. As shown by many experts around the world, building a financial base takes time, so do the investments.
The graph below shows Person A and B. Person A invests “1” at year zero for a certain return. Person B invests the same amount “1” at year 10. Despite same rate of return, at year 30, person A is at 64 and person B is at 16. It is clear that person B will take additional 10 years to reach 64. Meantime, the person A would be at 256.
This is important to start one’s investment journey as soon as possible.
Pay yourself first
This means that once you receive your income or pay, invest first. Automate it. Data suggests that saving 20% of your gross income will catalyze one’s nest egg. If not possible, one should aim for at least 10%.
Have a budget
For most people, their expenses often catch up with their income and often exceed their income. In many developed countries, the levels of individual debt are at unprecedented levels.
Making a written monthly budget is a necessity. There are many online/free resources for the same. Additionally tracking one’s budget and periodic updates are important.
Stick to your budget
Many people have a monthly budget but do not stick to it. They succumb to capitalistic marketing or instant gratification. Sticking to one’s budget is important. If you want to have a vacation or an expensive gift or anything alike, you can plan for it and save for it.
Start developing financial goals
It’s never early to start setting financial goals, no matter how small or large. Establishing goals is the first step in understanding your finance blueprint and then establishing a pathway and process to achieve them. It is important to remember that money is a means goal to achieve your end goals in lifestyle, health, career, hobbies, relationships and other areas of life. Its essential to ponder and establish your financial goals to support all areas of your life.
Buy your needs not your wants
A common financial mistake is to buy your wants rather than needs. If your expenses and priorities are misplaced, it is easy to accrue debt. Buying expensive needs may set you may steps back in your net worth and overall financial plan.
Start acquiring assets
It is important to start accruing financial assets sooner than later. There are many different types of assets including paper assets, real estate, alternative investments, insurance etc. Each person needs to assess the assets they need according to their financial plan.
Reduce bad debt
Any high-interest debt that does not support your asset-building and overall financial plan is bad debt. Common types include credit card debt, or high-interest loans taken to purchase your depreciating assets.
Start some long-range planning
It is never too early to start long-range financial planning. It is important to assess your finance and career trajectory, your finance needs, your retirement plans, your lifestyle expenses, and active and passive income.
Continue to acquire financial skills
It is essential to continue to invest attention on financial literacy and grow your skillset. As you grow more comfortable with your skills, you can participate more actively in in your finances and their management. Many people self-manage all their investments and assets.
Start examining your money mindset
Above all, it is crucial to assess your money mindset, your relationship with money and your thoughts and emotions about money. It is essential to develop your finance blueprint and evaluate and mend your relationship with money.
Financial litearacy doesn’t have to be hard. We can all do it!
For more information you can visit www.thelegendaryquest.pro. You can subscribe to receive a free life satisfaction questionnaire.
About the author Ketan Kulkarni:
Ketan Kulkarni is an international award-winning physician, entrepreneur, a clinician researcher (>125 published papers), a finance coach, author, an avid learner and networker, a traveler, an art enthusiast and antique collector and a music buff.
The Legendary Quest:
https://www.amazon.com/Legendary-Quest-Professionals-Excellence-Fulfillment/dp/B09TWPHFFR/ref=sr_1_1?crid=25K7XCWQWPD6I&keywords=the+legendary+quest&qid=1669732777&sprefix=legendary+quest%2Caps%2C117&sr=8-1
