5 Money Rules That Will Increase Your Net Worth
If you don’t have a personal finance strategy, there’s a chance you will never get wealthy. The average millennial earns $40-$50K a year and has $20-$40K in student debt.
But the high achieving millennial earns up to 7X more than the average. The same is true for people of all ages. The difference between average earners and above-earners is huge.
Once I realized that I got serious about money. But I didn’t focus on making more money—a mistake that many of us make. We always think more cash is the solution to everything.
“All my problems will be solved once I have a little bit more cash on hand.” Sorry to disappoint you, but that will never happen. As your bank account grows, your problems will too.
Yes, earning more is important. Not only for your bank account but for your career development. As you get better and have more experience you can earn more.
But we must stop thinking that the solution to all our problems is more money. We’re better off by creating a strategy that helps us to manage money better—that alone will help us break away from the average earners. To do that, I’ve created 7 money rules for myself.
Here’s some common sense: It takes more time to make money than to spend it. You work thousands of hours to make a certain amount of money. And then, you can drop it all on a new car, luxury vacation, watch, or anything else that you desire.We all know that, right? And yet, we keep on spending money like it’s nothing. I know this is something your granddad probably said, but the easiest way to grow your bank account is NOT to spend it all.
It’s solid advice. The ancient Stoics knew about this too. This is obvious by now. Desireless, avoid debt, and save as much as you can. Personal finance is called personal finance for a reason.
Your money strategy depends on your age, personality, a place you live, education, experience, etc. A person who lives in Manhattan probably can’t buy an apartment. It’s overpriced, and renting is probably smarter.
Buying an apartment makes more sense in a city with lower real estate prices. In that case, renting is more expensive. No matter what you do, always make sure you have enough cash so you can make an investment if you spot an opportunity.
How much in savings is enough? That’s up to you. What figure makes you feel comfortable?This article is for people who do NOT want to become professional investors or traders. We invest for the long-term—not to make money today or even in a year.
My investment strategy is focused on the long-term. But that means I also need to generate income today so I can pay the bills. How do you do that? That’s your short-term strategy.