“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!
One of my more popular articles is the one about How to Get out of Debt (more specifically, get out of bad debts). I believe an ounce of prevention is better than a pound of cure, so it’s better to avoid bad debt from accumulating than to keep digging yourself out of it.
So how do you avoid bad debts? Here’s a mindset that’ll help!
As I’ve mentioned in several of my articles, aside from just working to earn money, you also need to Save and Invest if you want to be financially successful.
Now, I’ve already explained why I don’t want to recommend particular stocks on another article (Read that one if you want to know how “Investment Advisors” can manipulate you), but I CAN teach you what I’ve learned from OTHER investors through their books and research!
“Fools say that they learn by experience. I prefer to profit by others experience.” – Otto von Bismarck
Now, you don’t need to be an extremely wealthy super-genius to become an investor. All you need (aside from a broker like BPITrade or ColFinancial if you live in the Philippines) is some money, discipline, and applied knowledge.
It’s the holiday season again and excitement fills the air as employees eagerly await their 13th month salaries and Christmas bonuses!
This holiday, many will soon find their payroll accounts FILLED with cash… that will all be spent in less than a week.
I’m sure you know how that feels. Happy and motivated when you see those big numbers in your payroll… and depressed the next week when you realize that you’ve spent it all.
“It’s not how much you earn, but how much you keep.”
That’s the main reason why many of us don’t achieve more. Every time we earn more, we WASTE more, and we go back to where we were. Two steps forward, two steps back.
So HOW do we stop wasting our 13th month pay and bonuses? How do we put it to better use, while STILL having fun? We’re here to learn that now!
Troubled by your empty wallet and bank account?
Let these 7 Wealth Quotes inspire you to change that!
1. “Being poor is a frame of mind. Being broke is a temporary situation.” – Mike Todd
2. “Empty pockets never held anyone back. Only empty heads and empty hearts can do that.” – Norman Vincent Peale
3. “Beware of little expenses. A small leak will sink a great ship.” – Benjamin Franklin
By my last count, I’ve read over 100 books and each one contained precious bits of wisdom that I use (consciously or not) to this day. I may not remember most of what’s written in those books, but they had all been valuable.
I’ve written an earlier blog about how valuable great books are (see “From Books to Riches”), and I’ll say it here again.
I don’t know any other investment whose cost is so far removed from its value aside from a Great Book.
Remember: You can achieve ANYTHING you want in life… ONLY when you LEARNED how to do it.