Tag Archives: personal finance

4 easy habits that can increase your earnings

This article is about the habits and attitudes of rich people. What you are about to read are habits, thoughts and behavior that we have noticed in some of the richest people.
Fortunately, it all applies to you, starting today (especially No. 3).
We present them in the order of speed you can apply in your life:

1. Spend as much as you need, not as much as you like

This is the main reason why most people live at the level of modesty, some even at the poverty level.
They choose not to spend money strictly on what they need, instead they choose to satisfy more lusts and pleasures.
But there are people who refuse to satisfy all their pleasures. Instead, they save and invest. This makes the difference between prosperous and less prosperous people.
This is the typical case of the young man sitting in a studio apartment in a lively neighborhood, but he has an expensive car …

2. Refuse to care about what other “people think about you”

Whenever you make a decision, in the present case, a buying decision, based on what others think about you, you are taking a step towards poverty. You will never be able to achieve your financial goals if you care, first and foremost, about what others think about you.

3. Start educating yourself financialy

What do prosperous people do? They invest in tehiryself.They invest in their education. Since self-education brings so many financial benefits (and not just financial) … it is normal for them to invest in their own person.
The power of financial gains is even greater as investment in self-education and skills are getting bigger.
Education is the most valuable asset you can ever have.
More … is an asset that will never devalue.
On the contrary !
So, your financial gain will become bigger as you invest in self-education and personal development.
I recommend you go to trainings, seminars, conferences to expand your network and increase your revenue.

4. Choose a field of work that you like, but must be very well paid (both conditions are important)

There are colossal differences between wages, even in those areas that require similar efforts for training and education. Prosper people, before engaging in a field,they look at what financial gain that domain can bring in at certain amount of time. Then, depending on this, they choose their jobs or possible businesses. Our suggestion is that before you get involved in a job/business, do a market study and see which are the best paid areas, but also the least paid ones. The goal is to know which domain has potential and what domains should be avoided.

Little money or … poorly managed? 6 mistakes (and solutions)

How many times did you say to yourself : “If I had more money, then everything would be fine …”?
Well, if you were to have a brief analysis in the last year or the last 2-3 years, you probably have had “more money” and your income has been rising.
Something has changed?
Many people set a certain amount of money when they would have enough, they say, but when they ritch that amount, her/she observes, paradoxically, that it is still not enough and that they should have … much more.

Why is this happening?
Because the lack of proper financial management leads us to spend the more money that we have at our disposal.
We live in a society where consumption is promoted, even in an exaggerated way. You rarely happen to wonder why you bought a beautiful but unnecessary thing …

If you recognize yourself in the above ranges, then you are likely to recognize yourself in the following, where we underline only 6 of the most common mistakes we have noticed:

1. You are not setting up a budget

If you own a business or have a marketing affair, you probably planned a budget for an investment or a specific activity at a certain time. Setting up your budget helps keep your finances under control. You are the master of the situation. You will not be driven by money, to the intention to spend without measure and the panic of staying without money after.  So when it comes to a new home purchase, a vacation, buying a car, just set the amount you can fit. And the amount will be set based on the market price in line with the financial resources you have. So, the ideal is not to face a big budget hole after such a purchase.

2. You do not count on what you’ve spent before

When you spend on impulse, you ignore the overall picture. You go shopping and finally you realize that you have bought too many things (and implicitly, that you have spent too much). Ideal is to remember your purchasing history.
For example, if you bought a new phone this month, do not buy a new tablet. It’s possible that the two acquisitions together to make you a big hole in the budget. Another mistake is the purchase of similar products in a short time. Or in the early replacement of objects / equipment without necessity. A better management of the money you have can make the difference in the lifestyle and what you can afford.

3. You use your credit card to the maximum

If you own one or more credit cards, do not use them irrationally because … you still have to pay them. As said above, the ideal is to set up a budget for what you need and not to exceed certain limits.

4. You live a luxury life on a low-cost budget

It is good to dream and have high aspirations. But at in the same time, it’s good to be realistic. Especially when it comes to the money you have.
Do not try to live a life of luxury, as long as your budget is falling at to a low-cost …
There are people who spend their wages in two days and then have to live until the next salary. Better try to save, in order to allow you moments of indulgence from time to time. And in the long run keep your realistic sense and do not put you at higher expense than you can take.

5. You do not save

We think we do not have enough money to save, but the more money we gain, the more we spend.
So, you can think that you may never have enough so that you can to put something aside.
When it comes to saving, do not think of colossal amounts. Any cent set aside is an economy. In addition, it is important to learn the habit of saving so that it becomes an integral part of your life and of your family.

6. You ignore your debts

One of the biggest mistakes made when it comes to money is represented by … ignoring debts. If you do not take them into account, that does not mean they will disappear on their own. Worse, they multiply. If you have a debt to the bank, interest rises every day. If you have a debt to someone else, it will not raise interest, but it will increase the frustration and mistrust as far as you are concerned. Do your best not to have any debts. There are psychic pressures that make your plans go worse.


4 mistakes that do not let you have more money

How many times did you happen to keep saying “if I had more money I would live much better!” Even if your income grew in time?
Many of us live this paradox!

What’s the explanation?

Actually, when we know that we have solid financial resources, we feel relaxed and do not put as much restrictions as when we know ourselves strained.
So, although we have more money in our account and in pockets (we gain more), we realize that we are confronted with the same problem.
Beyond that, we have certain habits that make us spend more than we need, and who do not allow us to have more money.

For instance:

1. You spend a lot on brands / label

We like brands. And we love to show them.
In the end, this is also the policy of the various producers: to create a desirable image with which the customer can identify themselves to buy.
Buying branded products is not a mistake.
But it becomes a real problem when we spend a lot of money in this direction.
Think, that finally, the brands do not define you. It gives you a certain status in society, it creates a good image in the eyes of others. But they are not talking about you completely.
When it comes to brands, focus more on the idea of quality.
Beyond the image it gives you, it’s better that the money you spend will bring you a high-end user experience.

2. You’re dying to have the latest gadgets

Somehow related to the idea of brands, we tend to spend a lot on the latest gadgets.
As the latest phone model appears, everyone breaks their savings to buy it.
Why are we doing this?
Again, because we like a lot the label. Before making such a purchase, ask yourself the question: “What other product can offer me the same quality (or similar) at a lower price?”. In this way you can get rid of a major investment that you will feel when you need it most. Do not throw all your savings on such a purchase.
Try to prioritize the things you need. Or that you want.

3. Pride does not let you take your second job

If you read biographies of rich people, you will find that many of them had all sorts of small jobs at the beginning of their career. And such people manage to raise wealth precisely because they have a mercantil way of seeing life.
They know how to use their time to earn money. And they often earned money with at least a second job.
Thus, wealthy people have grown up with care to have at least two sources of income. If one was lost, they were not found in financially distress.
So why not take a second job? It can be a project to work from home. Or it can be part time. Or a weekend job.
Opportunities exist in different places, it is important to identify and capitalize them.

4. You buy things you do not need

You have certainly moved from one place to another at least once in your life time. It has not happened to you to ask yourself, “Why do I have so many things?”
That’s because we all tend to spend on things we do not really need. And we collect piles of unnecessary things that in one way or another make us life harder, and we alter our wallet, too.
Before you buy a thing, try to pass a purchase intent through the following filters:

Do I really need this?
Do not I already have an object that can help me for what I need?
Can I borrow this from someone? (For example, a drill / reading book)
Can not wait until the product is on sale?

Such measures may seem minor to you, but buying only what you need and when you really need it will help you save.
In addition, you will see that you will not fill your house with all sorts of unnecessary things.
Because then you will not know how to get rid of them in an effective way (to give them someone else / to send them for recycling).

On what did you spend the most of your money and what solutions did you apply to get rid of waste?

10 secrets to be successful and make money

No matter what your occupation is, you probably also want to earn more money.
Whether you are an employee, you are dealing with an online store or any other business where you sell your products and interact with customers, it is important to truly understand the path to success.

Here are some “secrets” you need to keep in mind to be successful and make money:

1. The most important thing: You must be able to offer a quality product or service that as many people as possible want to buy.

2. Put others first! You have to satisfy the needs of others, to help them fulfill their own dreams, and in this process YOUR dreams will also be fulfilled.

3. You must own or control at least one product. To make a lot of money, you have to come into the market with something only you can offer. You must have exclusive control of (at least) one product or service. This must be something people can not find anywhere else. It’s good to be something that many people want.

4. Money brings money. You need to be prepared to spend money (on ads, promotions, etc.) to earn money. If you do not invest money in your business, if you do not “plant the seeds,” you will not really be able to get a rich “harvest.”

5. Focus on advantages! Your customers do not care how extraordinary your company is or what wonderful person you are, they just want to know how your product can help them.
How it will meet their expectations, how they will benefit from it and how it will improve their lives, make them happier or richer, etc. They will buy what you sell only if they feel they will do better by buying from you.

6. Give something for free. Of course you will not make money by offering your services or products for free, but the word “FREE” is still ranked No. 1 in the top of the best words to use in commercials.
If you can provide a free sample, free information or a free catalog, people will come to you for the things you offer for free and if you do the right thing they will be impressed and will want to do business with you.

7. Treat them properly! You have to give your clients the feeling that they can trust you, feel confident that you are right and that you will offer them quality products or services. In addition, they need to know that they can get their money back if they are not happy.

8. You will need help. You must use the services of dealers, distributors and agents. It is impossible to reach everyone through your own efforts.
Your dealers will have bigger sales than you could ever have alone. Your dealers will reach people you can not reach. Who are the most suitable people to recruit as dealers? Your own satisfied customers!

9. Reinvest 30%. You must always keep some of the profit to reinvest it back into your own business. Use this money to buy multiple ads, print multiple catalogs or flyers, send multiple notifications (written or online).
This reinvestments of money in your own business will make them grow and “multiply”. If you do not do that, you will never get to really earn a lot of money.

10. Always keep your eyes and ears open. Find someone who already wins how much money you want and … do exactly what he does!

10 tips for start-up investors on the capital market

If we want to invest in the capital market, it is very important to have patience and not to act on emotional impulses.
We need to control our emotions and not let ourselves be influenced by the subjective aspects when trading on the stock market.
Greed and fear are the biggest enemies of investors. If you’ve decided to sell a title at a 25% profit, respect that threshold because otherwise it’s possible to lower your profit as a result of further corrections. And the mutual is true, if you have set a loss of 15%, do it, otherwise it is possible to record a larger loss.

10 tips for start-up investors on the capital market:

1. Do not invest in the stock market the money you need right away. Do not plan what to do with the money you will earn from your stock investments, because the stock market is unpredictable, and no matter how much experience you have or how many growth signals you may notice, the market may contradict you and fall.
It is not advisable to invest in the money programmed for important events such as schooling, medical interventions or other projects, because you may have less pleasant surprises.
It is recommended to invest in the amount of money that you may be deprived of for a period of time. It is said to “forget” about the money invested in the stock exchange. That does not mean you do not watch the market because it will do all the work for you, but not include that money in the next financial plans.
Also, do not invest in reserve money set aside for unpredictable situations, because it may not be to your advantage to sell whenever an emergency occurs!

2. Do not invest the borrowed money on the stock exchange. Borrowed money is interest-bearing and must be repaid within a certain amount of time. If the stock market does not confirm your theories, you will have to take money from other sources to cover any losses and to repay the borrowed amounts.That way, you may unbalance your budget over a long period of time and it will be quite difficult to recover financially. Reimbursement of borrowed money, which you have not benefited from due to decreases, creates a lot of stress and you will remain with a negative image about the capital market.

3. Investments on the stock exchange start with small amounts. It is much more comfortable to start trading small amounts in psychological terms because potential losses can still be small. All trading principles and rules are the same regardless of the amount you invest, whether you are a start-up investor or have a low-value portfolio. It is much easier to gain experience with an account with less zeros because you are more relaxed and you can learn from your own mistakes.

4. Start with a demo account in which to create a virtual portfolio. This will help you better understand market mechanisms and build your own information and analysis system. When you start to gain knowledge and figure out how the stock market works and are happy with the returns you get from the virtual portfolio you can start trading on a real account. You can still keep your demo account to test new strategies and make changes to your portfolio, which you are not sure you want to do in the real market. You will gain confidence in yourself and the capital market will no longer seem an unacceptable field. It costs you nothing to make a demo account, but you can gain a lot of experience.

5. Do not invest in complex financial instruments at first. Another important tip is to approach the market from simple to complex. From the basic investments that you know and know how it works and how you can gain, diversify your portfolio with more and more complex financial instruments as you gain experience.

6. Do not wait for the best price. When you have decided to sell or buy, do it at the market price. The capital market is dynamic and constantly moving, and no matter what plans you have, the market will try to contradict you. If you are a long-term investor, small price differences should not be the reason why you can delay a transaction. The more you expect the titles you are targeting to reach a certain price, the more you risk losing your earnings, or even worse, you can record higher losses.

7. Set up an investment strategy and respect it. Once you have identified the type of investor you are and your attitude towards risk, you can begin to make a strategy for future investments. The most important thing about the strategy you set is to respect it and not to change it frequently. If you oscillate between two or more strategies, you risk not to get the expected results. Discipline is one of the most important qualities of an investor, be it beginner or advanced.

8. Do not invest all the amount available in a single financial instrument. The likelihood that all the financial instruments you invest in will decrease at the same time is rather small. By allocating financial resources to different destinations, you can cover the potential loss of some of your investment through the gains made by others. No matter how tempting an investment is, do not bet on a single card!
Diversification can make a difference between a winning investor and one who still expects his investment to become profitable.

9. Invest in the long run, so downtimes will have time to recover and on long-term you can make profit.

10. Invest in blue-chips. Blue-chip shares are the most liquid stocks with high capitalization and consistent financial results over the years. These shares have increased their value over time, due to the confidence shown by investors, confirming each year without disappointing their shareholders. These shares are usualy part of a number of stock indices, which once again demonstrate their quality of capital market stars.

Last but not least, when investing in the capital market, you must always be informed and not invest based on rumors. Any information needs to be verified from multiple sources and as far as possible these sources must be reliable.

Do not forget that in order to be an investor you need to spend time on this activity and become actively involved in decision-making.

From savings to investments

Many people confuse the terms saving and investing. To save is to create a reserve of money that is kept at a risk as low as possible, even close to zero, while investing means putting the money saved to work in your favor to increase their value and to help you reach your financial goals more easily.

Savings to be affordable and to conserve their value are usually kept in financial instruments with increased liquidity and low risks, such as bank deposits or treasury bonds, these instruments being characterized by low returns. Earnings of savings are in the form of interest and the aim is to cover at least the inflation rate.

The qim of investments, on the other side, is the achieving of high returns by increasing the value of the invested capital and making profit, assuming an acceptable risk. Thus, the financial instruments used are from the least risky ones, such as bonds with a relatively low risk, medium risk (shares and peer-to-peer lending), and derivatives that have a high degree of risk and which are especially addressed to professional investors.

In short, the purpose of savings is to preserve capital at low risk and low returns, while the purpose of the investments are to increase the value of the capital invested in variable risk and return conditions depending on the financial instruments chosen.

The capital market is a dynamic way to invest the saved money. If you do not have the necessary knowledge to start investing on your own, you can contact a specialist. Before you start investing, you need to go through some essential steps:

– First of all you need to start your financial education. You can not start investing before understanding how the financial markets work and what are the characteristics of the financial instruments you want to invest in;

– You need to know what your risk appetite or maximum risk level is, according to which you will choose the right investments for your risk profile;

– You need to set your investment goals, including the time frame for which you want to invest, in order to create a diversified portfolio that meets your needs;

And last but not least, you need to determine what liquidity you want, so you can have access to your money when you want it.

Choosing the right investments may seem like a difficult process due to the multitude and variety of available tools, but having a trustworthy partner with you, as it wants to be for you my-passive-income.eu, investments can become accessible to anyone who wants to become an investor .

Learn to invest in 10 easy steps

Investing is not as hard as it may seem. In principle you have to put the money to work for you so that you do not have to take your second job or work overtime to get more money. There are several types of investments that do not require large amounts of money to start investing.

Step 1. Put your finances in order. To start investing without looking at your financial situation is like jumping into the pool without knowing how to swim. Before you start investing, you need to evaluate your financial situation, know how much you earn, how much you spend and how much you can save to invest. Fortunately, you can start investing with relatively small amounts of money. The sooner you start to invest, the better your long-term results.

Step 2: Learn the basics. You do not have to be an expert in finance so you can invest, but you have to have the basics to make the best decisions. Learn what is the difference between the main financial instruments, shares, bonds, investment funds, deposit certificates, etc. You also need to know some basic investment principles such as asset allocation and diversification of investments to mitigate the risk and get the best results.

Step 3: Set your investment goals. Once you have found out what is the amount you have for investments and what are the basic notions you need to set your investment objectives. Although all investors want to earn money, your goals need to be more specific. Capital security, earnings, or capital appreciation are a number of factors to consider when setting your goals. What is best for you depends on your age, the moment of your life and your needs.

Step 4: Determine your risk profile. A decrease in the total value of your investments gives you the creeps? Before deciding what investments are right for you, you need to know how much risk you are willing to assume. Do you like car racing and amusement parks or do you prefer to read a good book in the quiet of your house? Your risk profile varies depending on your age, income, and financial goals. Find out how well you tolerate the risk before investing.

Step 5: Identify your investment style. Some investors prefer speculation while others prefer long-term investment. Once you have set your investment goals and risk profile, you need to see if the two are compatible. If you like racing cars, but you prefer capital security then it is better to tackle a conservative strategy. A conservative strategy involves investing in relatively low-income, low-risk financial instruments, while an aggressive strategy implies taking high risks to get high profits.

Step 6: Find out and understand the costs of your investments. It is very important to understand the costs of your investments because they can reduce your investment’s profitability. In principle, passive investments tends to have lower costs than active investments. Each type of investment has different costs. Before investing, be aware of all the terms and conditions that this investment entails in order not to have surprises later.

Step 7: Find a good consultant. To start investing, you need a trusted investment broker or consultant, with whom you can communicate very well and have professional experience and a good reputation. Establish some criteria that it has to meet and asks for recommendations. Schedule a meeting with him to see if he is the right person to guide you to the investment world and set the terms of your cooperation if you are happy with your choice.

Step 8: Choose the investments. Now you have all the elements to choose the investments that will be part of your portfolio. Depending on your investor profile and the consultant’s assistance, you can choose the investments that best suits your needs. To have a balanced portfolio, you need to diversify and allocate your assets wisely. With the asset allocation you will choose investments with different risk grades but also with different returns, from the safest to the least secure according to your risk tolerance. By diversifying, you will have a portfolio that will contain financial instruments from different categories and from diverse domains.

Step 9: Do not make emotional decisions. If you have not found out before, it’s time to know that emotions can negatively impact your investment. Do not let the fear and the greed to diminish your gains or increase your losses. Make an investment strategy and respect it strictly, otherwise emotions will influence your decisions and may be a greater enemy than ignorance. Greed can lead you to maintain a position in the hope that prices will increase even if the market is declining. And fear will make you sell a holding too early or keep a loss asset. If your portfolio does not let you sleep at night, it is best to reassess your risk tolerance to adopt a more conservative strategy.

Step 10: Evaluate and modify. The last step, as important as the others, on your investment journey is to evaluate and review your investments. Over time, depending on the evolution of financial markets, the structure of your portfolio will change, and you will need to make changes to it, to balance it again.

Start investing as early as possible and keep your interest in the investments you make. With time you will gain more and more experience and make wiser decisions.

7 things learned from the richest people in the world

What can the richest people in the world teach you?
Very simple – probably you immediately realized – can teach you how to get like them. That’s rich.
Because we all have the ability to find our own way to prosperity. Only some have already reached “destination” …
You would be surprised to find that the richest people on the planet are not at all “super-humans”. In fact, they are not very different from ordinary people (obviously, if we do not take into account the size of bank accounts).
But they still have something special: a different way of looking at the world, which allows them to identify opportunities and turn them into a successful big business.

Here’s how they are structured and what the richest people in the world do:

1. They really like to do what they do.
They do not generally compromise, but they are pursuing a career in a field that really means something to them. In other words, they apply the “choose your profession, which will make you joyfully awake every day.” And if they do not find a job to satisfy their aspirations, then they invent it
Due to the fact that the rich do only what they really like to do, they dedicate themselves to their work, continue to look for ways to develop their professional lives and do not waste their time on nothing.

2. Progressing permanently.
Whether it’s the latest advance in technology or a better way to communicate with their team, the very rich are constantly learning and keeping in touch with the newest directions of development to improve all aspects of life.

3. They are constantl ymaking  changes.
The truly rich often analyze the situation in which they are at one point and the direction in which they want to move and then make the necessary changes. Instead of being stuck in a company (or in a relationship) that does not really satisfy them, they prefer to go and look for better choices.

4. Getting totally involved.
They voluntarily dedicate their time and energy to those activities in wich they strongly believe. Very wealthy people always praise the efforts made by employees and truly appreciate those who work for them.

5. “Bad luck” is not part of their vocabulary.
The rich believe strongly that the notion of “bad luck” does not exist and that the situation they have at a certain moment is the result of the choices they have made in the past. They are involved in many positive things: doing physical activity, eating healthy, working hard and reading a lot. All this helps them identify new opportunities to earn money.

6. They ask many questions.
The very rich always ask questions and they are very good listeners. They are motivated by the desire to learn and understand the things that happen in the lives of other people. Some of their best ideas come from these conversations, because they really “listen”.

7. They do not have “wishes” but they set “goals.”
We often hear people saying, “I want to be rich,” or “I want to find another job.” The richest people have come to this because they have set some goals, not because they have made wishes.
Many of them set out each year an important goal they want to achieve. They do everything they can to avoid the loss of time, so they make daily lists of things to do wich they finish.

7 mistakes with money that rich people do not do + 7 tips

One of the characteristics of successful people is that they know how to efficiently manage their personal finances and not make big mistakes with money.
But they were not born scholars.
They invest in financial education and thus understand how they can avoid the main threats and mistakes that stand in the way of prosperity.

Here are 7 mistakes with the money that rich people do not do and 7 tips:

1. DO NOT spend more money than they gain.
The main skill in money management is to spend less money than you earn. Some of the planet’s richest people have applied this principle in full.
For example, Sir John Templeton, one of the largest investors in the world, saved 50% of his income, even when he earned little. But if you save that percentage of income seems too much to you, it’s no problem. You can achieve financial success and save only 10-15% of your income, or even less.
Tip: Learn to spend less than you earn.

2. DO NOT focus on price, but understand the importance of value.
The price you pay for what you buy is just a part of the overall picture. Successful people also think about the value of the goods.
When investing, they consider the possibility of increasing these businesses. As far as personal things are concerned, they are always interested in the quality and lifespan of these products, not just their price.
Tip: Buy quality products that last for many years.

3. DO NOT throw money on interests and commissions, know how to manage bank accounts.
A credit card is very expensive because of the high interest you have to pay. Successful people are very careful about commissions, such as how much they pay for using the ATM or other transactions.
These commissions are easily avoided if you understand how the system works and you can choose a great bank account.
Tip: Review your account statement once a month, and you’ll understand the charges and fees charged by the bank.

4. DO NOT forget to adjust their financial plans after a major change in their lives.
Did you get married soon? Waiting for a child? These are a few important financial steps that successful people manage efficiently.
It is essential to make financial adjustments when the circumstances of your life and your family change significantly.
Tip: At least once a year, you should carefully analyze your life and financial plans (preferably with a financial specialist).

5. They are NOT satisfied with a fixed income but always seek ways to increase their income.
Some people will never ask for an increase in salary, or they will simply be pleased with a 1-3% increase. Unfortunately, such a rate of growth is lower than inflation, which means that it virtually reduces your purchasing power. Instead, successful people are constantly looking for new ways to increase revenue.
Tip: Go to courses that improve your professional training and try to contribute with ideas to increase the productivity of the company you work for.

6. They DO NOT claim to know absolutely everything about money.
Successful people know that the world we live in is very complex. When it comes to personal finances and money, there is a lot of information available. That’s why successful people like Warren Buffett know their limits and focus on their strengths.
Tip: Continually improve your knowledge of money and investment. If you have not done already, read the most important books in this area.

7. Do NOT take unnecessary risks.
Warren Buffett has remained famous because he said “the number one rule is never lose money.” But all types of investments have a certain degree of risk.
So successful people use two important tools to avoid losses. They understand the role of insurance (buildings, cars, life, etc.) to control certain risks, but also the great importance of diversifying investments.
Tip: If you are not too sure you understand how a certain financial instrument works, just act slowly and ask questions until you really get it.

The best way to make savings in 6 simple steps

Making savings is not at all a common activity in our “modern” times …
On the contrary, most people are only interested in buying the things they want as quickly as possible, and for this purpose they often resort to credits. They thus end up paying much higher amounts for objects whose value decreases continuously from the first day and which they will soon want to replace with new ones.
This way of thinking is very wrong.

On the other hand, putting some money aside, making some savings, and ONLY THEN buying those things is a more responsible and effective way to act. Plus, having some savings available – as they say, those “white money for black days” – is a very useful thing in this times of uncertainty that we are crossing. Because those who make savings on a regular basis will be less concerned about any unforeseen events and will be able to cope more easily with such negative circumstances.
The problem, however, is that even if they want to make savings, many people would not be able to do so in an efficient way, because the vast majority of them apply a wrong method: they want to save what is left after they have finished spending on a month. This is a mistake, because there is usually nothing left to save, as spending is at least as high as income.

So what do you have to do?

Here’s the best way to make savings in 6 easy steps:

Well-known investor Warren Buffett, one of the richest people in the world, strongly believes in the habit of saving, although he has a fortune of several tens of billions of dollars. He says, “Do not save what is left after spending, but spend what’s left after you’ve saved.”

And Robert Kiyosaki, a successful investor, author and speaker, who became famous thanks to the bestseller “Rich dad, Poor dad”, advises us in his direct way: “First Pay Yourself!”

So the best way to make savings can be implemented as follows:

1. Know yourself.
First of all, write down your earnings and spending in recent months carefully and analyze them to really understand what your money is doing.

2. Make a plan.
Set realistically a certain amount you want to save each month. Many specialists generally recommend 10% of revenue, but may be more or less depending on your personal situation.
Even if you save only 2% or 3% of your income, you will see that in the long run you are MORE gained than not doing anything.

3. Savings FIRST.
The first thing after you earn the monthly income, put those savings into a separate account that you do not touch. Now there are banks that can automatically do this for you, with the amount you set.
Try to “forget” this savings account, in order to avoid the possible temptations that may arise …

4. Make the spendings only AFTER the savings
Carefully plan the costs you have to do to fit the amount you have left. Try to get used to the idea that these are the only money you can spend.

5. Be consistent.
Follow your plan every month. In this way, your savings account will grow and you will be more motivated to continue.

Making savings is extremely useful. But if you want to become truly prosperous and, in the long run, even financially independent, then this is not enough.
You have to find more profitable ways than bank deposits to place your savings. That means you have to invest.

So, first informe yourself about your risk profile, because there are plenty of opportunities to get better returns than bank deposits. For example bonds, properties renting, peer-to-peer lending. Not to mention investment in capital markets.

The most important thing is to make it a habit to constantly look for serious and profitable investment options, because in the long run, only they will help you build a more prosperous future.


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