Learning how to properly manage your money like the rich, may sound challenging. But, it is actually a very simple approach. If well mastered, it will help you be better off, with your money. That is because you’d have mastered the art of money management.
The rules set up a winning strategy for those looking to improve their finances and stay ahead. Interestingly, Tom Ferry leverages personal experiences to make them less abstract.
Tom Ferry, takes us a little further with the presentation. He uncovered all the tricks utilized by the wealthiest for generations to make them available for all.
Most importantly, learning how to manage your money with the highlighted strategies are not only tight to the wealthiest. Any person can implement all those strategies, successfully if they are disciplined and focused. Irrespective of their income, level of education, or social status. Of course, you have to be pragmatic, level up every step, and set the right mindset.
Being effective with your money implies much more than just making more money and spending less. Money management goes far beyond that.
Indeed, the main goals of good money management behavior should be:
- Living a decent lifestyle
It takes a long strong will to keep yourself from blowing up everything you’ve earned. That is because of the influence our society puts on us. Vacation, houses, cars, etc. All of those things that make us appreciated and value by our current society; might sound great but pose a greater risk to our finances. Indeed, if not well managed we run the risk of burning everything.
- Preparing for your retirement
This should be one of your top priorities.Perhaps an obsession, from day one. When you have that constantly on a corner of your head, it forces you to be careful.
- Building wealth
It is essential to understand wealth not from the official definition but inherently from a personal history and from an individual story. For instance, if in the past you couldn’t afford food on your table and now you are able to afford good quality food and pay your utility bills; from your point of view, you are on your way to wealth.
- Holding on and passing on assets to the next-generation (Generational wealth)
An asset is by definition an item that generates revenue. In like with that appreciation, a real estate property with a mortgage is not an asset but a liability.
Obviously, this is not the only way. There are many other strategies and solutions available. If you have had success with a different strategy please share in the comment section.
However, most of the strategies highlighted works well if you are a real estate agent or an entrepreneur. Nevertheless, here are 4 simple tips that any ordinary citizen can implement to improve their money management habits.
Manage your money with these 4 Tips
- Open a long term savings account
Drop into that account 5% of your monthly paid check every month. Then, block the account for 30 years. That means you will be able to make deposits but no withdrawals for 30 years. The account will serve you as your own personal retirement fund.
- Emergency fund
Make sure you have at least six months of your fixed expenses in your savings account. The money will cover your expenses should anything happen. At least you know you can pay rent, pay for food,pay your utilities, and cover your bills for six months.
- Open a difficult time savings account
This account gives you an extra layer to protect yourself against any potential unexpected and sudden challenges. It is like your personal insurance. Drop-in any arbitrary amount but I will suggest around 1% of your monthly paycheck. After sometimes, that extra $100, will come in handy for example when you have a really difficult month.
- Opportunity fund
This just some extra savings to play around with. Whenever you see an opportunity to make money or to help a person you can always tap into the account. For instance, buying stock during a red day or somebody you know is putting up an amazing product on sale. It is helpful to have that extra money to look out for opportunities.
Nevertheless, you want to put yourself in a position where you have balanced finances. Irrespective of your goals and social status. It is just a matter of setting the right mindset and expectations for yourself. Finally, keep in mind it is not how much money you make, but how you manage what you make. If that wasn’t the case then, we wouldn’t have self-made wealth.