Financially Smart People Improve Their Finances in These 6 Ways
#4 — They don’t get carried away by the media and the people they follow on Instagram
The path to success is so easy to follow.
It’s all about motivation:
Learn new skills
Work smart
Live below your means
Stay away from consumer loans
Pay off your house quickly
Save and invest
So you can retire comfortably and happily.
You have more freedom and choices in life. Anyone can do it.
Don’t buy on red, and don’t sell on the green. Invest for 30 years, not for 3 weeks
Buy, hold and buy again.
That should be your motto.
Imagine that someone bought Microsoft stock 23 years ago and sold it a few months later. Think about Alphabet, Tesla, Apple, Amazon, Bitcoin, etc.
With patience, you can only benefit from the stock market if you diversify enough and keep buying more. Then you can build wealth.
When stocks fall, investors tend to sell their shares. They buy on the green and sell on the red. This is a bad strategy. Don’t be like these people.
Buying is the strategy.
To get it right emotionally, it makes sense to put the same amount of money into the stock markets every month, regardless of whether it is up or down.
Don’t let society tell you what you should do with your money
Say no to social pressure.
People who are normally responsible act with their minds on vacation. Lack of planning is the reason. They want to scrape their face into the ground. So they come home with a problem.
Drained checking account or empty savings account.
You should not take out consumer loans for vacations.
Time and love are the most valuable things you can share with other people. Not meaningless things.
Vacations are important for the heart and mind. So are your finances. But spending doesn’t have to get out of hand.
You should be able to make your retirement savings while enjoying life’s beautiful moments.
Most people have the wrong priorities. First comes the vacation, then nothing for a long time.
Don’t be afraid of success
You deserve it.
Many people are afraid of success. You feel sorry for yourself. They suffer from consuming self-confidence.
They don’t do their best work, they don’t make smart investment decisions. You shoot yourself in the foot.
Change your attitude toward money.
Pay your debts. Debt is like a millstone around your neck, and at the same time like a log in your leg. You are unlikely to become financially free with a bag of debt.
Make an effort at work. Do your best and use a side hustle to build a third revenue stream.
Don’t get carried away by the media and the people you follow on Instagram
Spending money to impress others will get you nowhere.
It is human nature to want to impress others. I know how stupid it is.
I threw a big party at my apartment, invited the guys in my district, and spent a ton of money. I quickly regretted it. It was the stupidest thing I’ve ever done with the money.
Instagram and Facebook are full of people who want to impress with beautiful handbags, shoes, watches, cars, hotels, houses…
Luxury stuff is like a shot in the dark. It’s not rational. You will break quickly as the price increases. It doesn’t make sense.
You work smart, invest smartly. Build a fortune. Reap your wealth. Simple as that.
Being a landlord is like being president of the USA, it is not easy
A rental property can be a failure.
Landlords are responsible for repairs to their properties.
Earning an attractive return on a rental property can be quite a challenge, especially with the booming real estate market.
Real estate involves risk. Being a landlord is not as glamorous as people make it sound.
Landlords have to replace bathrooms, replace the back door, change the roof, clean, remodel. Fights and problems are more common than you might think.
According to one landlady who commented on my article: “If you rent you enrich the landlord? she said she has 3 houses on rent and doesn’t make any profit.
Half of all landlords achieve a gross rental income of less than two percent. this is a bad thing. Especially since you still need to deduct the home loan costs.
Not to forget the taxes you have to pay on the property.
You will not always find a responsible tenant. You have to think about vacancies, property tax, realtors, repairs, property management, etc. You must consider the work and time you have to put in.
The dream of home ownership can turn into a nightmare
Renting or buying a property?
Many people ask themselves this question.
Saving the necessary down payment on your own can be a challenge for many. Instead, it may make sense to rent and put the money into the financial markets.
You can also use this strategy to retire early.
You have to decide which path you are going to take. There is no right or wrong.
You can settle in a cheaper area to buy or rent something if it has become too expensive in your area and your job allows it.
Most people think that the advantage of buying is that they no longer have to spend money on rent. But this is a Baby Boomer thing.
You need capital to buy. You have to pay transfer taxes, a real estate agent, insurance, and mortgage interest. It is not easy.
After about 30 years of repayment, you no longer pay interest, but there are still costs associated with homeownership.
To be able to buy your dream home, you probably need a huge amount of money.
It is questionable whether this will become a permanent dream. Sometimes the dream home leads to a financial nightmare.
Sometimes it makes sense to own your own home. Sometimes it doesn’t.
Instead of investing huge amounts of money to purchase a house, you can also invest in the stock market or be a digital entrepreneur.
You must consider not only the monthly interest payments, but also the initial payment, closing costs, moving, repairs, furniture, and ongoing maintenance costs.
This article sums up this: what is often good for our heart, is often not good for our pocket. Manage your money with your mind, not your emotions.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.