Personal Finances: Getting Ahead
Traveling down the personal finance road has been a journey to say the least. I'm appreciative of the lessons I've learned over the past years regarding this topic, even though the lessons I learned didn't come as a result of my upbringing nor from schooling. Instead, getting ahead financially was a skill-set taught by myself through self-education, discovering new truths on my own time as I learned and mimicked from several different thought-leaders in the space.
Dipping slightly outside of that vein, other pillars of my life I consider to be quite strong. Areas such as health, fitness, relationships, and spirituality are doing well and I am incredibly and continually grateful for the consistency in how they are performing. Of course, there is always room for improvement, but needless to say, I am quite pleased in regards to those areas that honestly, have come quite naturally.
The single area that I have not been strong at in the past is finances. I was never a saver like some people I knew growing up. When I earned a paycheck from a job, the first thing I would do is go to the video game store and purchase, well, video games. Not only that, but I also treated myself to anything else that I wanted because, why not? I was living at home and had zero expenses. My parents took care of almost everything so that I wouldn't need to. What else was I going to do with my hard-earned cash besides spend it?
During my personal finance journey over the past number of years, I discovered the book, Rich Dad Poor Dad, one of the best books I know of on finances. In this book, Robert Kiyosaki explains the importance of financial literacy and what people need to know to become rich, or simply to manage their money without falling into financial ruin.
In one of the chapters, about the middle of the book, Robert describes how to mind your own business. He does not mean that one needs to necessarily own a business if that's not what they want to do. Many people today would rather not own a business for one reason or another, and that is OK. The point that Robert wants to make clear is to build your assets while you work your job.
Keep your day job, but continue building your asset column.
Many people try to pay for their lifestyle out of their wages, only to fall deeper and deeper into debt, paying for things they can't afford such as an addition on their home or a new car from a dealer they simply could not pass up. Instead of spending your hard-earned money on liabilities that take money out of your pocket, put that money towards assets that continually put money in your pocket over time.
Invest in and/or earn assets. That is how you get ahead. Saving money is good and still recommended, but it will take quite a long time and the interest rates today are, well, in the negative percentages in some parts of the world. Counting on banks to make you rich is like counting on McDonald's to make you a hamburger, it's not going to happen. It is of utmost importance to mind your own business and build that asset column, reduce expenses where you can, and stop purchasing liabilities that take money away from your pocket each month.
The longer you can DELAY your instant gratification the better. One of the reasons why people have financial issues is because they want the new clothes, the latest gadget, or the new car right now instead of 1-5 years from now. The whole keeping up with the Jonses mentality is truly crippling and will only lead down a path towards wanting more while never being truly satisfied. Owning nice things is nice, but not when it comes at the cost of your bank balance falling into the red.
An additional tidbit that Kiyosaki mentions is to invest in assets that YOU LIKE. Stocks, bonds, real estate, cryptocurrency, etc. It is important to acquire assets that you find enjoyment and curiosity in because you will take better care of them and protect them. Plus, you will have more motivation to learn and build them up as opposed to assets you have zero interest in continuing your education.
Summary:
✪ Keep day job
✪ Don't purchase liabilities
✪ Keep expenses low
✪ Invest in assets
The biggest takeaway I received from the lesson, is the shift in the way I think and carry out my actions towards finances. My wife and I are now on a path that we are positive will take our family to new heights. Pursuing this new path allows me to be the strong provider that I've always desired to be, and I am truly enjoying the journey. I'm constantly learning and continually growing as there is always room for improvement, but I like where things are headed. ✦
Thank you for reading.
Related articles:
First Non-Correlated Asset Class in 4 Centuries
Digital Assets: Go Long or Go Home
Continue reading with a Coil membership.