About money, personal finances and how you can have a more prosperous life has been written a lot.
But if it were to make it as simple as possible, you would see that everything is reduced to just a few extremely effective ideas, because the Pareto’s principle applies to personal finances too: 80% of the positive results are obtained with only 20% of the efforts made.
So before complicating yourself with too many details, maybe it would be a good idea to consider those simple and effective things that will produce the best results.
Here are the simplest and most effective 11 truths about money that can bring you a more prosperous life:
1. Financial education is more important than money.
Be constantly preoccupied with learning about money: how to manage, how to invest and how to keep them. Day by day, you MUST be the “master” of the money and not the other way round. Once you understand how money “works”, improving your personal finances becomes just a challenge and not a stress.
2. Spend less money than you earn and save the rest.
You can get everything you want. Just adjust your earnings and expenses accordingly.
3. Do not try to impress with the things you have.
Only superficial people will judge you for the things you have. True friends and important people in your life, however, will judge you by your character.
4. You must start investing as early as possible – the younger you start, the more time you have to build your well-being.
If you start investing earlier, you will have more time to learn, gain experience, and recover your mistakes or unprofitable investments.
5. There are “good” debts and “bad” debts, be careful not to confuse them.
If you use a credit to buy properties or goods that bring you income and whose value increases over time, then this is a “good” debt, because it will help increase your prosperity.
But if you make credits for consumption, they will make you lose money because of the interest you pay and the depreciation of things bought, so they are bad debts. Although the two types of loans seem quite similar at first glance, they are actually very different and have opposite effects: one brings you money and the other takes them out of your pocket.
6. Live simply and surround yourself with positive people, not things.
The more you fill your life with things, the more they will consume more time and energy. The more “toys” you have, the more you have to pay and maintain, and in the end you will be less free. Instead of being the owner of these things, they will come to rule you. Just live simply and makes wise decisions.
7. Be always prepared for unforeseen situations, both financially, physically and mentally.
Make a plan, organize yourself and put aside some money for such situations.
8. Nobody takes more care of your money than you.
You do not have to have 100% confidence in someone else’s opinion about the value, profitability or safety of a particular investment (or business) than after you have studied the subject yourself and made the calculations.
9. Think long term and plan your future.
Learn to postpone the rewards you are tempted to give you right away. Weigh carefully all the important financial decisions you have to take. The future will arrive sooner than you think and you are the one who will bear the consequences of the decisions you will take.
10. Do not treat the money superficially and do not waste them.
You have to treat the money as you treat a good friend: with respect and gratitude, because once you have maked them, you must take great care to keep them.
11. Trust yourself!
Learn to listen to the “whispers” of your self and give them more attention than to the “cries” of your ego. You have the opportunity to create the life you want. You are never a victim of circumstances. You have the power to control your thoughts, actions and perspective on life.
Be optimistic and always look at the good side of things!