I am no expert. I may have been blogging about financial management but I assure you my basis are pure experience, research and readings. But though I may have less qualifications to pass as a financial advisor, my passion and my advocacy for people to start taking advantage in their age, is what makes me have a powerful voice in the finance and business section.
For today's post I'd love to share a list of Important Lessons when it comes to managing your money that almost every Financial Advisor will Teach You. The authenticity of these lessons are high for I myself have known these secrets to really work and have read from numerous books how valuable these lucky seven principles are.
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1. Time is the most crucial part of becoming rich. Have you ever heard of compound interest? Well these two words are the powerful reason why as young as you are now you start investing your money rather than piling it up in your alkansya. The earlier you save the bigger the return of your lifetime investments.
2. Plan, plan, plan and plan again. If you are very serious to be financially capable then you will be extra careful as to where your money goes. This force you to plan really well on your big financial decisions. Create a roadmap of your long term goals not just financially but for your life overall. Set your priorities. Develop an emergency fund and if possible create a fund for every part of your dreams. Allocate the amount that you need to save in order to achieve that goals.
3. Income - Savings = Expenses. Financial advisors will surely teach you the only secret formula you need to master in order to be successful financially: Once you receive your paycheck... pay yourself first. This means you will remove your money for your tithe, savings or emergency funds before you allocate to your expenses and not the other way around.
4. Think Long Term- Do not ever invest on financial vehicles that promise high returns. Think long term when it comes to your investments. The longer your money stays the higher the compound interest thus the richer you will be. Money earned in an instant will fade in an instant too.
5. Understand where you'll be investing to. Life today is harder than it is before so value your investments. Research more and do not settle for investment vehicles you just heard out of nowhere. Ask your bank and they'll surely be able to help you. There are certain investment vehicles that suits one's financial capability.
6. Live within your means. You can't stay living like a one day millionaire for the rest of your life. There will always be a hard time so gaya ng langgam dapat laging handa sa tagulan. Don't let yourself be in debt specially with credit cards because the compound interests also happens to debts. Be frugal and stay as simple even if you get a raise.
7. Diversify. Don't stop in just one financial vehicle. Aim to diversify your investments. there are a lot of investment strategies that you can do such as opening a mutual fund, investing via peso cost average and creating a UITF account.
The way I see it financial management becomes much easier because financial advisors are now easier to reach. There are blogger such as Ms. Liyanne of The Wise Living and Ms. Jillabs or Frugal Honey who share their knowledge through their blog posts. I learned a lot from these people so it they are like my angel financial advisors.
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