15 BASIC MONEY SKILLS Everyone Should Know

some people think to get rich you simply have to have money left at the end of the month but this isn't true this is just the start whether you're paid a little or you're paid a lot you might still just be jenny from the block but don't despair there are ways to boost your finances and increase your family's wealth status and to do that you need to think of money differently welcome to alux. com the place where future billionaires come to get inspired if you're not subscribed yet you're missing out let's take a look at 15 money skills everyone should know number one nobody got rich from saving money unless you're saving in the millions moving up in wealth won't just happen from having money saved it's what you do with it that determines if you turn it into wealth saved money in other words cash or liquidity is good for two reasons first it acts like a safety net if anything happens to your regular income it's advisable to have three to six months of living expenses saved up this will get you through until you can rally and earn again the second value of cash is it gives you access to opportunities if a solid investment property or business opportunity crops up you can take it and cash is king when negotiating a better price for yourself lock down the investment and begin building your wealth portfolio but more on that later number two wealth savings liabilities being wealthy doesn't mean how much bling you have or what car you drive wealth is having valuable financial assets or physical possessions which can be converted into a form that can be used for transactions so you're thinking but a maserati can be cashed out for dollar bills but the truth is that isn't really an asset it's a liability cars cost you money in maintenance insurance fuel and depreciation but an interest-bearing investment or a property is considered an asset and leads to your wealth over the long term they gain value and can be cashed out for more money than you put into it your following savings are what's left after you're done paying your expenses these can be put away to earn interest while you sleep or can be invested to grow in value and make you profit liabilities are things that you owe on or cost you money we mention the maserati but it can also be dead student loans your phone contract a home loan or a credit card even your lease agreement is a liability because in essence it's money you're signed up to pay to figure out your wealth you minus your liabilities from your savings plus assets and you can see how long you can afford to live without earning the longer you can live the wealthier you are number three make tax work for you small earners fear taxes and tend to pay more than they should just because they're scared the tax man will come knocking whereas the rich love taxes not not paying taxes we mean using them to their advantage to master money you need to use taxes to your advantage find out more how taxes work in your region and how you can use tax incentives to protect your wealth there are usually tax advantages for investing or putting away for retirement whereas you might pay more tax if you just save your money in your current account or keeping your property in a trust or a company might be more tax effective than owning it in your personal capacity the tax you save you can invest and then save for even further tax be sure to use tax like the rich dude to keep more of your money not part with it number four learn how to use other people's money another common mistake of the poor middle class is only using their own money there's a general fear to access loans and go into debt for sure it's a dumb idea to go into debt for a new watch or shoes or even a holiday but to access loans at a manageable interest rate might mean that you can increase your earnings for example perhaps you run a service which requires machinery or have a property business to upgrade your property or buy better machinery on a loan might end up meaning you can charge more for your rental or provide the service faster and be able to double your clients each time you weigh up a loan or a debt you have to be certain that the inflation isn't going to be uncontrollable and that you have enough business to cover the debt regardless of whether your business prediction takes place however if you do the sums and can charge more for an upgraded property or double your sales with a faster service then the loan repayment is affordable and you have a sustainable business which leads us to the next point number five you need to earn more not spend less not having enough money is seldom solved by cutting back in the end we get frustrated and end up with old spending habits once again while it's never wise to spend above your means the best way to have more money is to bring in more money perhaps this is through a raise or a job move or maybe a side hustle maybe your business has grown stagnant and needs a productivity boost when your mind is open to the idea that the world is abundant and you just need to tap into bringing more money in you'll start to open your mind to what you can do to bring in that extra income number six what are the basis points we're sure you've heard this phrase being thrown around the financial report section of a news bulletin well we're here to let you in on what all these technical financial terms mean so you can start decoding finance basis points are actually a real simple concept if you take one percent and divide divided by 100 then each of those one hundredths of a one percent are a basis point so in other words 0. 01 of a percent so why do we need them when talking about finance we have to be specific right down to the t it's most commonly used when talking about interest rates so they are used to ensure that even small changes are listed because a quarter of a percentage point can mean millions when you're talking about billions so next time you hear 50 basis points increase or decrease then you know the interest rate has gone up or down half a percent number seven know your dollar needs now that you've decided that you want to bring in more money to get more out it's time to work out how much money you actually need this will make it easier to ensure that when you start getting more money you use it wisely to grow your wealth and not just spend it more most banking apps nowadays give you the option of labeling your expenses and this spits out a great pie chart at the end of each month to see where you spend your money this way you can compare a real dollar and cents value per category because our estimates of how much we spend on items like entertainment and groceries are generally way off once you know these details you'll also be more empowered to know how much you have left to build your wealth number eight have a retirement plan the sooner you have a retirement fund the sooner you can retire it's as simple as that most countries have some form of labor force retirement benefit in the u.

s this is called a 401k this might be sufficient for you but if not explore private retirement fund options there are a lot of tax benefits for putting your money into a retirement fund because most governments reward you for looking after your retirement needs and not becoming a burden on the state it's never a loss to invest in your retirement because at the end of the day it's money you'll cash out long-term investments like this rely on compound interest so the younger you start the less you'll actually have to pay as the interest will start to do the real earning for you number nine how to safeguard your money you might have heard of the term diversify and it all sounded very much like something people on wall street would do but that's not true for centuries people wanting to secure or grow their wealth have diversified buying gold art and property are firm favorites collector's items and valuable family heirlooms have also been a great way people have stashed their cash for a rainy day the only real threat here is theft or damage if not stored properly and if insured this isn't a great risk the real risk to your wealth is having all of it in one place and if the economy tanks or your country is hit with inflation or there's an economic crisis you could be paddling up creek having all your eggs in one basket kept by the same few financial institutions in your home country could spell out major financial laws enter cryptocurrency which is a tool used to safeguard money as it diversifies your investment portfolio between savings investment property and business this way you reduce the risk of everything being wiped out and while your investments rally after a dip you might find your property values are still increasing steadily and your wealth is still growing overall number 10 make money while you sleep to understand money you need to look beyond how many hours in a day you have to earn money money can make you money while you sleep that is if you put it in the right place even the smallest amount of spare change you should be putting in an interest bearing account this way while you decide your next money move the money is at least working for you in the same way investments are your money put to work or perhaps you can use a small amount of money to build up an arbitrage business that will also require a mostly hands-off approach one of the greats in teaching how to make your money work for you while you sleep is tim ferriss and his methodology of money making is in the four hour work week check it out on audible by using our free voucher at the link alox. com freebook number 11. use some sort of rule for your monthly income planning elizabeth warren has made some bold moves in her life as a career politician but she isn't your average politician she descends the ivory tower of policy into the practical when it comes to money matters she focused her time in senate with consumer protection economic opportunity and the social safety net the advice she gives to anyone wanting to get ahead financially is to spend your income by dividing it into three spend 50 percent of your income on needs use 30 on wants and 20 on investing this is also known as the 50 30 20 rule and is well regarded as sound advice number 12 don't make money your meaning if your plan is to just squeeze every cent you can from a dollar then you're missing the point gone are the days of driving up prices and driving down costs to make a quick buck to build a sustainable income you need to look at how you can add value to your boss clients or consumers when you add undeniable and unique value people are willing to pay you more naturally this doesn't give you complete immunity to financial loss or being taken advantage of but for the most part looking to provide value is a far better way to build wealth than trying to make a quick buck next up we're doing this a little different terms and conditions the three words that make us all run in fear when it comes to financial contracts it's a good plan to read your t's and c's and know what you're signing it's impossible to know the unique ins and outs of every contract but there are three items you should look for and understand before you sign anything number 13 know what to look for in the t's and c's number one banking fees paying bank fees is like going to the dentist a necessary evil but there are ways to pay fewer fees firstly some banks offer you a no fee bonus if you keep your account above a certain amount look out for this and try to maintain it next if you're paying a fee per transaction perhaps upgrading to the next type of account is worth the monthly fee if it gives you unlimited transactions for free also higher packages sometimes pay for themselves with airport lounge visits gym membership savings and airline miles or points number 14.

know what to look for in the t's and c's number two credit cards you really can hack the credit card system if you read the t's and c's many credit cards offer 30 days interest-free credit this means as long as you clear the card back to zero every 30 days you won't pay a cent for the free transactions and the safety net of having access to a little extra cash flow if you need it many credit cards offer free insurance when you buy certain items on them like free travel insurance when you book flights on your credit card so look out for these advantages and make your credit card a savings device rather than an expensive way to access a loan look out for any clause on inactivity penalties and rather swipe for a small item just to avoid this if you have to number 15 know what to look for in the t's and c's number three investment fees the main charge on an investment is the expense ratio if you're investing in a fund with a diversified portfolio this is most common this is basically the money that the investor charges for managing the fund it's a percentage of every dollar invested so if you invest one thousand dollars at an expense ratio of 30 basis points basis points huh huh that means you'll pay 0.