This is an era of information explosion.
It is important to distinguish whether knowledge or information is absorbed.
It's not that the more you know the better,
You have to know what is useful.
For example, financial management requires learning early.
People need to deal with money almost all their lives.
Find out a few rules related to money early.
It will be a lot easier to live in the future.
Here are 10 money concepts you should know earlier:
1. It does not matter how much you earn, but how much you keep.
The way most people judge wealth is based on income.
But it can't be so.
Because unless you keep all the money you make.
Or use it further where it is useful in the future.
Otherwise, how much you earn is not the point.
Because you are not letting money add points to your life.
You are just working for money.
If you don't want to work for money for a lifetime.
Don't envy those who spend too much money every month but can't keep their income.
Keep as much income as possible under the basic life.
Don't over-expand your consumer spending.
Work hard to survive for a while.
You will live your life in the future more easier.
2. Reading books can accumulate wealth than watching TV.
Wealth management expert Thomas Corley survey the wealthy clients he serves.
It is found that 80% of people with higher income have the habit of reading.
Charlie Munger, Buffett's business partner, also said so.
The smart people he met in his life all have the habit of reading.
Although reading is not necessarily rich.
But reading more can open the boundaries of your thinking.
Increase knowledge and ability to solve problems in workplace and schools.
As competitiveness increases, income will naturally increase.
3. To buy a car 10 years later, the assets can be save as much as 1 million.
Take an 800,000 pesos car for example,
The first payment of 200,000 pesos will be paid off in five years.
After driving for 10 years, the remaining value of the car is 250,000 pesos.
If you move the money for buying a car to invest in a 5% bond fund on a regular basis,
In 10 years, you will save 1.19 million pesos.
The difference between this is about 1 million pesos.
And if this money continues to be invested, it will make even greater differences later.
Whether a car is a necessity varies from person to person,
It doesn't mean that you can't buy a car.
If your work or family DOES need a car.
That is the necessity of life.
But you should also avoid investing too much money in the car.
In economics, a car is after all a waste of money, not a durable good.
It must have fallen in price.
If you need to buy a car,
Be sure to measure the price of buying a car.
4. A price with zero interest rate does not mean that there is no interest.
Many products are sold at zero interest rate in installments,
Usually it is a high unit price product.
These prices do not mean that no interest is charged.
A lot of interest has actually been added to the price in advance.
Generally speaking, today's bargaining power is generally higher than that of credit cards.
This must be remembered to be reminded.
Don't buy something impulsively just because you can pay in installments.
What you want to measure is your purchasing power, not your ability to pay in installments.
5. A salary increase does not mean becoming rich.
A salary increase is a good thing, but if you spend more money every month because of a salary increase,
This is actually making yourself poor.
Please take note that:
Don't let the speed of improving the quality of life exceed your salary increase.
Save money first, then improve the quality of life, so that you can go one step further towards your desired life goal.
Whether it is achieving financial freedom early, or accumulating capital to develop your own business.
I want to develop a career other than my official duties,
Or want to have multiple occupations and incomes,
Having enough capital helps a lot.
6. Don't spend too much time struggling to spend money or not.
If you hesitate for a long time before buying something,
Or have been struggling,
It leads to unhappy spending money,
One thing to remember,
You may just not have the habit of budgeting,
When it comes to budgeting, some people may reject it,
But in fact, the function of budgeting is amazing.
It can help you buy things you really like.
Save unnecessary expenses,
And the mood is calmer when spending money.
I'm happier when I buy something.
Your focus will be on how much you can spend.
If it is within budget.
Spend your money happily!
Keep this principle, the easier you will be, and the more motivated you will be to make money.
7. Deposit at least 10% of income as a financial freedom fund.
Warren Buffett said that if you can't make money while you sleep, you will work until the day you die.
In order to be able to have income while sleeping,
The most stable method is to deposit financial freedom funds.
Invest 10% of your income every month.
Then don't use the money from now on until financial freedom.
Or as a future pension.
If you have the ability to save more than 10% better,
The more you save, the faster you will naturally achieve financial freedom.
But to remind,
If you still have a loan now,
First, pay off consumer loans as the primary goal.
8. Plan your trip a year earlier, you will save a lot of money.
When we are forced to choose, we almost have to pay a high price.
I only booked air tickets and hotels temporarily a few months ago.
More money is often required.
Plan air tickets a year in advance.
Or book a hotel half a year ago.
Not only is it cost-effective.
Also because of the early preparation of the cost of going abroad,
Instead of worrying about spending too much money in a foreign country, and come back without money to live.
In addition to traveling, you only need to save money for many things
You can definitely save money and save it.
For example, early bird tickets,
Regularly go to the store to supplement daily necessities,
It will be much better than temporary expenses.
9.Save money 5 years earlier, and wealth can be as twice as after 10 years.
Some things start earlier, the better. Investment and financial management is one of them.
In terms of investment, if you invest 10,000 pesos every month to a bond fund with a return rate of 5%.
After 10 years, the money will become 1.5 million pesos.
If it starts 5 years later, it will only accumulate to 660,000 pesos.
This is the difference between starting early and starting late.
The key is to start early, even if it is a few thousand pesos.
Because we need compound interest to help us save money,
And compound interest takes time to brew.
You need time to be on your side,
It takes time to wait for it.
Although the volatility will be large in the short term, as long as the time is extended, the effect of compound interest will appear.
10. Poverty and wealth are not absolute, but relative.
From a psychological point of view, a person feels poorer because he has no money than the people around him.
People with assets of 100,000 pesos feel poorer than those with assets of 500,000 pesos.
People with 5,000,000 pesos feel poorer than those with 10,000,000 pesos.
So If you want to be rich,
In addition to accumulating money in the pocket, your brain must also accumulate satisfaction.
If you just keep comparing with others,
You are just chasing money blindly.
If your purpose of making money is just to be richer than someone,
You will never finish.
You will never be satisfied.
* Learning financial management, the purpose of saving money,
you can live the life you want in the future,
Instead of living in someone else's life.