Money is one of the most taboo subjects in our society. It’s something we’re not supposed to discuss, yet it affects every aspect of our lives. The reality is that talking about money can help us do better financially. When we share our experiences and knowledge, we can learn from each other and make better decisions. We gathered some rather uncomfortable money truths. We will briefly discuss each one and how it impacts your personal finances.
High income doesn’t equal high net worth
One clear thing is that few people get rich from high salaries. The most financially successful people are either investors or business owners. It’s important to remember that building wealth takes time, effort, and a willingness to take calculated risks. It’s not about making a lot of money quickly, but about keeping money long term. While a higher income gives you more options, it is not the determining factor in wealth creation.
Money is a tool
Poverty is incredibly difficult, and it’s much easier to focus on becoming moderately wealthy and using money to outsource things you don’t want to do. The idea of being able to pay someone else to take care of things like cleaning your house or doing your laundry might seem frivolous, but it can make a big difference in your quality of life. To that end, money is a tool to achieve more freedom than being a goal in itself. The value of money is in what we can do with it.
Focus on being rich, not looking rich
To be obsessed with looking wealthy is a sign of deep insecurity and is ultimately pointless. People are too busy to care about what kind of car you drive or how much your watch costs. It’s better to focus on building real wealth and achieving financial security. The unfortunate trap many fall into is spending money on looking rich. And once the money is gone, it’s gone.
Invest in yourself first
Investing in your skills is a much better way to build wealth than outsourcing your financial future to third parties through investments. You can charge higher rates and earn more money by learning skills that are in demand. This approach takes more effort and gives you more control over your financial future. While earlier, we said higher income is not the only determinant, it is a part of the formula.
If you can, start a business
Starting a business is a selfish act, but it’s also necessary to look after ourselves and our families. By creating a business that provides value to others, we can earn a living and have more control over our work lives. It’s important to remember that being selfish in this way can ultimately benefit others as well. Starting a business is not for everyone, but there’s really only one way to find out if it’s for you.
Ask better questions
Asking $30,000 questions is more useful than obsessing over $3 expenses. By focusing on the big picture and asking questions that can lead to meaningful change, we can make more progress in our financial lives. It’s easy to get bogged down in the details, but keeping our eyes on the prize is important. The quality of your life will be determined by the quality of questions you task yourself to answer.
You learn to manage finances
Finally, it’s important to remember that we all start out as financial dummies. None of us are born with a natural understanding of finance and money management. However, by investing in our financial education, we can become more knowledgeable and make better decisions. Being bad with money is an excuse that should not be tolerated. We can all learn to be better. Everyone you see who is good with money learnt to do so. The key is to start now and make learning a lifelong habit.
In conclusion, talking about money might be taboo, but it’s important to break that taboo and have open and honest conversations about our finances. By building real wealth, investing in our skills, and making smart decisions, we can achieve financial security and enjoy a better quality of life. We may all start as financial dummies, but by investing in our financial education, we can all become financial experts.