10 TIPS : PERSONAL FINANCE AND INVESTMENT METHODS

As you read many financial books and blogs, you will find many different personal finance tips and tricks.

This can make personal finance look like a huge, overwhelming, and complex subject, but it is not.
It's so simple that I've broken down my personal finance base into just 12 quick points.

If you live on these 12 financial tips, you will have more control over money and you will live a much better life economically.

10 TIPS  :  PERSONAL FINANCE  AND INVESTMENT METHODS
10 TIPS  :  PERSONAL FINANCE  AND INVESTMENT METHODS



1. INVESTMENT KNOW-HOW: WRITE LESS THAN YOU EARN.


Yes, I know. Sounds natural.

According to CNBC, 78% of Americans working full-time will not be living on a paycheck basis.
Here's one fact:

It is easy to know that you should spend less than making money. Actually doing it is much more difficult.

However, if you want to get away from the payroll life that many people live in, you have to spend less money than you earn.

This is one of the most important but basic personal financial advice. To do this, you'll need to track you'r spend.  Record your purchase history or use the free personal finance app.

2. FINANCIAL TIPS: LEARN ABOUT BUDGETS.


You may hear a little bit of "budget," but you should not. Budgeting is not difficult and does not mean you have to stop enjoying it.

Because budgeting is simply making a plan for your money, you can better understand where it goes every month.

A popular and effective method of budgeting is to use the 50/30/20 rule.
How it works is that 50% of your income is commodities (bill, food, housing, etc.), 20% of your income is savings, and the remaining 30% is whatever you want.


This way you can disassemble your payroll, but you may need to make some adjustments to suit your lifestyle.


3. INVESTMENT KNOW-HOW: REDUCTION OF INCOME AND EXPENDITURE.


GeekLimit users on Reddit, one of my favourite personal financing tips, have an advantage!
This is a curious trick that can change the perspective you have about money and set a better budget.
It is all about dividing income and expenditure into daily values.
  • Income: 250,000 won per month = 83,000 won per day.
  • Expenditure: monthly rent 800,000 won = day 27,000 won.
  • Expenditure: 200,000 won per month = 7,000 won per day
  • Expenditure: Everything else (food, phone, gas, etc.) is $ 750 per month = $ 25,000 per day
In other words, you have about 24,000 won a day left.  Do you want to save $ 1,000 for a great vacation ?


I think you have to save 42 days for the money you spent. It means 42 days without paying a penny.
Do you want to buy a new $ 10,000 car? The money you spend is 416 matches.


This will tell you how long the purchase will take and how it will affect your spending ability.


4. MAKE MONEY FIRST.


This personal finance tip is another common tip that can have a big impact on your finances.
If you pay first, you will invest in your financial future, and in the future you will appreciate that.
So, why not just pay the end of the month? Is that much easier ?

Well, the first reason for making money is that once the money is sent to a savings account, it is much less likely to spend it.

If you wait until the end of the month to pay for yourself, you may not have enough money left!
In the future you will be very sad without money.  Make your future happy by investing in yourself !


5. INVESTMENT KNOW-HOW: HAVE A FINANCIAL GOAL.


If you want to achieve your financial goals, you must first find out what goals are important to you.
Having a clear investment goal can help keep you motivated and help you plan ahead to reach that goal.

Now, do not think that you need to set a ridiculous investment goal. If this is your first time thinking about your personal financial goals, start with the small ones and go up there.


We recommend that you present a few different goals in each of the following categories:
  • Investment goals to achieve within the next three months.
  • The investment goal to achieve in the next year.
  • Goals to achieve in the next five years.
This way you can expect short-term goals and long-term goals. Your short-term goal may be a small stepping stone towards a larger goal.

Here are some good examples of financial goals.
  • Save $ 1,000.
  • Buy a house
  • Start investing.
So, remember to set long term and short term goals and keep track of them as well!
Write them down somewhere and set a monthly date to track your progress.


6. FINANCIAL TIP: CREDIT CARDS ARE NOT FREE.


Credit cards are a useful financial tool for you, but not for free. When you buy something with a credit card, you borrow money from the bank.

If you do not return the money on time, the bank will start paying interest in the balance.

This debt can build up and become a monster if you do not pay back the monthly balance.

However, if you use your credit card responsibly and pay off your monthly balance, it is a good way to start getting credit.

Most credit cards also have other benefits such as reward points, cash refunds or travel points.
So, should I have a credit card? Well, it depends on the situation.

If you are able to repay the full amount of your monthly balance, you should manage your credit card and have no problems keeping up with your debts.

Investment tips : Treat your credit card as a debit card. If necessary, pay the full amount each day. I try to pay back the balance every two weeks and not forget it.


7. GET OUT OF BAD DEBTS DEBT.


Debt means I owe somebody, and if I have seen gangster movies, I will never want to owe somebody.
However, not every debt is necessarily a bad debt.

So, what is bad debt?

Debt debt is the obligation of purchasing something that lowers value and does not generate any revenue at all.

Examples of bad credit are credit card debt or car loans.



What is good debt?


Good debt is the opposite of bad debt. A good debt is acquired so that you can buy something that will be financially beneficial in the future. That means you can make more money or make more money in the future.

Good debt usually has a low interest rate. Here are some examples of good debt.\


Student loan


Student loans are typically a very low interest rate, and going to school can raise salary as an employee in the future, so student loans are a good debt.

However, if you are going to college just because you do not know what to do after you graduate from high school, that would probably be wrong.

You may waste a lot of money studying areas you do not enjoy.
Then you will be stuck in doing things you do not want to pay for student loans. It's not interesting.
Mortgage loan (mortgage) .

This is tricky, but mortgage loans are generally regarded as good debt.
Usually, there will be free funds for investment because it is a long-term loan with low interest rates.
Interest on mortgages is also a bonus because it is subject to tax deduction.

After all, it is up to you to decide whether buying a house is the right thing to do. This is because the value of a house does not always rise as some people think.

Property taxes, utility bills, and home insurance costs.



Corporate loans



There are many online business ideas that can be started cheaply these days, but a small investment can be of great help to any endeavor.

Corporate loans are seen as good debt because they are aimed at increasing net worth.


8. INVESTMENT KNOW-HOW: PREPARE YOUR SAVINGS.


If I lose my job tomorrow, will I have enough money to buy a new job?

Emergencies always happen. It may not happen to you, but it is always good to prepare.
A financial emergency can not be predicted, but emergency funds can be prepared for emergency situations.

The best way is to raise money for 3 to 6 months living expenses.

So, if you lose your job tomorrow, you will be able to live your savings for three to six months while you are looking for a new job.


The following are general financial emergencies.
  • Retirement at work
  • Car problem
  • Home repair
  • Natural Disasters
  • Medical expenses or dental fees

9. FINANCIAL TIP: KNOW YOUR NET WORTH.



Net worth can seem like a tricky subject, but it's pretty simple.
Your net worth is how much money you have.


If you sell everything you own and pay off everything you have, how much money will you have?

That's your net worth.

Here is the equation form.

Net assets = assets (owned) - debt (debt).

Are you ready to calculate your net worth?

Here are some examples:


First, create a list of all assets (assets owned) and estimated values. Here are some examples of assets.
  • money
  • invest
  • real estate
  • car
  • jewelery
  • Other

At the bottom of the list, add the total value of all assets.


Then create another list of all the liabilities (the amount you owe).


Here are some examples of debt.
  • Card debt
  • loan
  • Student loan
  • Car loan
  • Other
At the bottom of the list, add up the total value of all the liabilities.


Now that you have the total value of assets and liabilities, you can see the net worth by connecting the numbers in the equation above.


Good if you have positive net worth. Keep trying to increase your net worth.


If you have negative net assets, you should look at your budget and make plans to increase your net worth.


If you are young and you have a large student loan, you do not have to worry about it as long as you do not even start working.


You should recalculate your net asset value each month to keep your financial state up-to-date.


10. HOW TO MAKE RICH MONEY: START INVESTING.


Investing is one of the best ways to increase net worth, but it keeps investing away because many people are afraid to lose money.

So instead of investing, I put the money in the savings account Good for you

 In order to prepare for an emergency, you have to save money on savings accounts.
The money in a savings account is depreciating over time.

The average savings account APY is only 0.06% (annual return), while inflation is about 1.7%.
This means that the money in savings accounts each year will have less and less purchasing power.


So, what can you invest to keep ahead of inflation?


Here are some investment options.

  • real estate
  • P2P loan
  • ETF
  • stock
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