The best practices to know how to manage your money are doing these 5 actions: save 10% of everything you earn to invest; reinvest all the performance of your shares; never spend more than you earn; flee from financing with small instalments and high interests; Investigate public securities, investment funds or stocks.
So how do you manage your money in the best way?
- Save 10% of everything you earn to invest
There is a point of view held by many billionaires and financially very successful people, which is this: “pay yourself first.”
Before someone uses the phrase as an apology to mislead others, it is good to explain well.
This attitude, additionally guaranteeing the edifice of a wealth, creates a much healthy financial custom. And do not think that you’re going to starve to set aside more than 9% of the money you make.
2 Reinvest all the performance of your investments
Let’s go back to the 10% it is been talked about in the previous point. If you think that in the future they will serve to return them in trips, cars or any item that is your dream of consumption, you are deceived. All returns must be reinvested. The idea is that you build a wealth and not just that you save a certain amount each month. Your heritage is your real wealth, the rest is illusion. There is no use having a gigantic salary or profit in your company if at the end of the year you have nothing saved.
3 Never spend more than you earn
This is obvious advice, right? Well not so much. Most people know that they shouldn’t spend more than they earn, yet they keep making the same mistake over and over again.
The apologies and justifications for repeating the mistake are the most varied, but keep in mind that sooner or later, it is necessary to face reality.
- Avoid financing in small installments and high interest rates
When you want a consumer good, you are often attracted to low-fee financing. However, it is good to open your eyes wide. The vast majority of the time, fees represent high interest.
It is enough to put yourselves in the shoes of the company that is selling the product or service: they need to acquire profits and the financing is nothing more than a loan. In other words, it also needs to be advantageous for the borrower, otherwise the negotiation would not make sense. So stay tuned! In general, the less time it takes you to get out of financing, the less interest you will pay. Not to mention that this will allow you to better manage your money.
- Look for information on public titles, investment funds or stocks
If you follow the recommendation of the first tip to save 10% of all the money you earn, you will soon have a good amount to invest. In this case, it is good to start looking for ways to apply the money. The valuenetworksandcollaboration.com is the perfect option for money management.