Good morning! Today I am pleased to welcome Jonny Pean who is a veteran financial blogger with a vast array of blogs on money management tips, insurance, loans etc to his credit. With digital marketing as his forte Jonny Pean loves to explore the various facets of World Economy as well. His interest in finances dates back to the time when he had started his career as a finance writer around 4 years back. Let me know if you would like to guest post on Savvy Scot.
The root of successful wealth building lies in the antiquated notions that our parents have passed on to us— save money, work on a budget and learn to calculate your retirement costs properly. The value of proper financial management, imbibed in our childhood lays the foundation for a more consolidated financial future ahead. However, there is a subtle difference between just being at par with your finances and having a huge amount of wealth. It’s true that saving and investing are the two areas of focus while you’re planning your finances. But there is one major rule of making it big with finances—- taking risks. Yes, you’ve gotto take risks and to experiment with variant choices in a bid to “succeed” with your finances. Your control over money should be a result of you being able to take calculated risks.
Robert Shemin, the author of “How Come That Idiot’s Rich and I’m Not?” opines, Everything in life has a risk and a cost for doing it, and a risk and a cost for not doing it. Rich idiots focus on the risk of not doing something.” Quite true. Yes, you cannot really aim to hit the jackpot if you are not taking a shot at it, to start with! However, there are experts, who suggest that learning too much about finances makes you unnecessarily fearful about taking action—you’re possibly overwhelmed by the risks involved in commercial or financial experiments and this is something that holds you back from heaping on your funds. However, we will suggest—don’t take blind shots. Take risks, make guesses but make sure that it is backed by due education. For instance, getting in to stocks without being aware of its risks, would only be considered a dear mistake instead of a worthwhile shot at fortune. Striking a balance between awareness and your ability to take risks would be key. Here is some more of personal finance advice on ways to get rich.
Realize the true nature of debts
Realize that debt is a bad habit—at times- more than being a necessity. Simply getting rid of your present debts would hardly help. Realize that it has the power to enslave borrowers— so much so that there are instances of people committing suicide owing to the failure of debt repayments as well. And all those financial risks, so far been talked about here, can only be taken when you see your college expenses, car, house etc being paid in full. Learn the policy of stealth wealth. Stash away some money in bonds. Learn the art of keeping your financial truth away from your friends, family by avoiding taking debts from them and stealthily work your way up.
Anticipate your Retirement Costs
Keeping a tab on savings, having control over unnecessary expenditures, investments in bonds and planning your retirement costs— all this seems too much– right? But that’s how it goes. Continuing on our point that you need to strike a balance between calculations and impulse, we would like to stress on the need for saving up for retirement as well. Multiply your present costs with 25 and that’s what you would require in your post retirement days with the growing healthcare costs and possibilities of inflation. And whoever has told you that you can forego your future just in order to splurge now, might as well brush up his finance skills a bit.
Besides the ones already mentioned above, there is a bevy of other money spinning tips to be followed:
- Start earning from as early as possible and start off with a 10 percent (of your salary) saving goal—deposit them in a savings account since compounding interests are crucial for reaching the $1 million mark
- Make the most of your 401k
- Keep a minimum of 3 months’ savings in the savings account