Philosophy is defined as the most common beliefs, concepts and attitudes of individuals or groups. Therefore, financial philosophy is the development of general beliefs and attitudes related to money and business transactions.
When I started thinking about this article a few months ago, I suddenly realized that I just didn't have fun from the money I bought. Every new purchase becomes a cause of fear and anxiety, not a pleasure to buy resources.
My content is full of blog posts, and everyone is asking the same thing: What is wealth accumulation?
The decision to create wealth is for some reason: excessive debt, the ability to send children to college, the ability to charity, and the cultivation of poverty. Whatever the reason, when you reach a certain level of wealth, you will ask yourself the inevitable question. Why do I do this? Why do I need this money? The ability to answer these questions will likely eliminate even the best plans.
So how do you develop a lasting financial concept?
The awareness and awareness of personal finance begins with financial education and a commitment to continuing education, even if you achieve your goals. "Financial education" does not mean an MBA, but it does mean developing a personal finance library and maintaining the library over time.
By contacting Robert Kiyosaki and Ric Edleman, I determined that my house is not an asset. If I want to maintain liquidity, I should deposit it in various accounts for investment purposes rather than prepaying my home. Because I have developed the idea of maintaining liquidity, I have only added a tax deferred investment tool. Because of my personal understanding of the stock market, I only invest in stocks through deferred tax vehicles. Because I want to maintain liquidity and diversify my investment, I invest in positive cash flow real estate. I corrected Suze Orman's suggestion to repay consumer debt before starting the emergency fund, because I was tired of being broken, and I hope that the attraction law helps me create wealth.
So let's take a look at the personal financial ideas developed so far and the following behavior:
Philosophy 1: My house is not an asset
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Act No. 1: I saved extra capital for future investments.
Philosophy 2: Always maintain mobility
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Act No. 2: Limit the number of tax-deductible vehicles I invest in and deposit my funds into a high-yield savings account.
Philosophy 3: Limiting my exposure in the stock market
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Behavior 3: Invest in cash flow real estate, precious metals, start a home business.
Philosophy 4: Immediately launch the contingency fund and use the law of attraction to build wealth.
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Act 4: Even when I repay high-yield debt, I saved a small amount of money. The advantage is that I have started and begged to enjoy the habit of saving, so that when the short-term, high-interest consumer debt disappears, I have a destination for "new money".
Philosophy No. 5: Repay all consumer debt, including cars, credit cards and student loans.
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Act 5: Negotiate with the credit card company to lower interest rates, and then develop a plan to eliminate all three consumer debt sources. Close your excellent retail account and track all costs. Committed to paying off, then drive for 10 years.
For the above, I added the sixth idea: spending money for my personal pleasure is appropriate when appropriate.
Behavior #6: Set up multiple accounts that store a dedicated amount so I can choose to spend.
If someone has a personal finance philosophy, that is, all debt, even mortgage debt, is bad, he will repay the mortgage debt instead of saving extra capital for future investments. He will also sacrifice short-term liquidity by bundling funds that are not readily available in the house.
Every new act in the field of personal finance requires some form of sacrifice. Whether or not you choose to incorporate mortgage reduction into your personal finance philosophy, these ideas and behaviors will lead to an increase in wealth, so when financial pressures weaken, people will inevitably require five or ten years. "Why am I doing this?" "Why do I sacrifice for wealth?"
This is where I am today: at a time when my financial philosophy is in conflict. The need to maintain mobility conflicts with my sixth philosophy of spending money for my personal enjoyment.
How can you avoid this kind of conflict in philosophy? The simplest answer is to understand your "reasons" in improving your finances. Often, the decision to improve a person's financial situation was made at the height of the crisis, when there was little time or a tendency to ask "why" to ask a question. Just wanting to stop the pain is ample motivation. Therefore, the key is that as long as you reach a short-term financial goal, as long as you keep a certain distance from the problem, you will start asking the "why" question.
First ask yourself what you like to do. We assume that you like fly fishing or woodworking or spend time with your child. You may have completely eliminated your hobbies or reduced your time spent with your family to increase your income. Start adding your event as soon as possible. Maybe you want to change your financial situation so that you can take a sinless trip. Set up an account as quickly as possible to fund your trip and accept it without any fuss. Maybe you want to leave a legacy and give gifts to charity. Create an account so that you can now fulfill this desire instead of wasting it "someday."
Developing a lasting financial philosophy begins with financial curiosity and financial knowledge. Financial knowledge will provide information for philosophy. Philosophy will provide information for behavior, and finally, you must induce behavior through your long-term goals and passions to make your philosophy truly lasting. Determining your long-term goals and passions first ask yourself "why" to create wealth as early as possible, otherwise you will create monetary wealth for monetary wealth, and money wealth without purpose will not last.
Orignal From: Develop personal financial concepts for long-term wealth creation
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