“Hey ‘friend,’ can I borrow a couple thousand? I ‘promise’ to pay you back next week.” Do you find it hard to say no? Do you let people abuse you financially? Do you keep letting people borrow money from you even when you know they never pay you back? I’ve had to watch my own mother suffer through that during the early years of my life so when I saw Chinkee Tan’s video, I just HAD to write about it. Never let people take advantage of your kindness.
Although I’ve made a budget plan before (Your Wealthy Mind Savings and Budget Plan), I thought that it might be a bit too difficult for those who just started taking care of their finances. This guide is intended for beginners and it will teach you how to budget and invest for wealth creation.
How can a mere budget plan that you can read in 15 minutes potentially change your life and bring you endless opportunities? Keep reading and you might just learn how. (That sentence was a clue by the way!)
After reading and following the advice of so many personal finance and investment books like “The Millionaire Next Door,” “The Motley Fool Million Dollar Portfolio,” “The Bogleheads’ Guide to Investing,” and several others, there are several lessons that come up again and again due to their importance. If you’re a beginner and you want to learn how to invest in stocks, then these are the 10 crucial lessons that you need to know:
1. STUDY FIRST
Warren Buffett, one of the wealthiest billionaires of the 21st century, said that “risk comes from not knowing what you’re doing.” Whether it’s from books, seminars, blog articles, or anything else, you must read and learn from the best investing guides out there. If you don’t you will likely waste money on “investments” that are doomed to fail, and you will also be VERY easy to scam.
Like what Jim Rohn said: “Formal education will make you a living; self-education will make you a fortune.” If you start properly educating yourself, you will most likely learn the next nine lessons on your own (and you will also learn several more valuable and advanced lessons as well).
Imagine a robot bumping into boulders, walking into walls, and falling off ledges while moving around the workplace. Because of that programmed pattern, it gets seriously damaged and needs repairs every week. Although it knows that being damaged is bad, it still can’t stop itself from bumping into walls or falling off ledges as those are what it’s been programmed to do. Humans behave in a similar way and knowing how to change that is the number one key to learn how to save money:
If we change our “bad programming” or bad spending habits, we will certainly stop damaging our financial future.
“The happiness of most people is not ruined by great catastrophes or fatal errors, but by the repetition of slowly destructive little things.” – Ernest Dimnet
“To those who use well what they are given, even more will be given, and they will have an abundance. But from those who do nothing, even what little they have will be taken away.” – Matthew 25:29 (NLT)
Brian Tracy wrote a chapter on the “laws of money” in “The 100 Absolutely Unbreakable Laws of Business Success” and one particular passage caught my eye:
“Money tends to flow toward people who can use it in the most productive ways to produce valuable goods and services and who can invest it to create employment and opportunities that benefit others.
At the same time, money flows away from those who use it poorly or who spend it in nonproductive ways.”
In short: You get more money when you use it well and you lose money if you use it wastefully.
That key idea seems obvious, but it’s mostly ignored by a lot of people, similar to how smokers know that smoking is bad but continue to do so anyway even if they wish to have good health.
Most of us know that wasting all our money on certain things is bad, but we do it anyway even if we someday hope to be rich.
What’s worse is, many of us don’t even know that we’re spending money unwisely!