So that your life purpose does not become debt repayment .. 10 financial tips for entrepreneurs | leadership

Have you ever thought that it is very difficult to manage money? This is partly due to the fact that we did not learn lessons about money in school.

In a report published by the Spanish “Embrandiando Asturias” website, author Diego Ortez provides valuable financial lessons that will help you understand how to get rid of money.

inflation

Inflation is mainly related to purchasing power, and the higher the inflation rate, the lower the purchasing power. In other words, inflation refers to how high the prices of goods and services are on average; For example, if the inflation rate is 10%, it means that the prices of products rose by an average of 10% during the year.

Inflation is linked to currency devaluation; The higher the exchange rate of a currency such as the dollar or the euro, the lower the value of your currency. To counteract this, you need to start saving with dollars to protect yourself from inflation and the devaluation of the local currency.

compound interest

Compound interest is the secret of the fortune of many millionaires, who do compound interest is to multiply your money over time / the more time passes, the more chances your money will grow.

But what is the reason for this growth? The interest generated by the invested capital becomes part of your principal, and the interest is higher each time.

For example, if you invest $ 10 at a rate of 10% per annum, you will have a profit of $ 11 the following year. Upon reinvestment, your capital will not be $ 10, but $ 11; Your annual profit becomes $ 12.1, and so on.

Invest early

The author stressed that it is necessary to invest early so that you can generate more profit from compound interest and develop a wealth-building mindset from an early age. And if you have not yet invested, it does not mean you have lost your chance.

Although your money will not have much time to grow, it is best to start investing today and not keep procrastinating.

Many think that making a fortune is a difficult goal to achieve, and that only a few are happy, but they are wrong; The comparison is clear: if you want to build wealth, you need to save and spend less than you earn, invest your money wisely regardless of your job, and take advantage of the benefits that build up over the years.

Debt good and bad

Not all debt is bad; There is a certain type of debt that allows you to benefit and help you achieve financial growth.

One of the financial lessons that no one taught us in school is to understand the differences between the two types of debt, which is an essential basis for creating financial prosperity.

Bad debts are meant to satisfy short-term needs or whims that do not generate future profits or returns. Bad debt is all emotional purchases and things you buy because you do not have the money for it.

And unlike bad debt, good debt allows you to raise capital to generate additional income, such as debt earmarked for investing in a project.

Cryptocurrencies

Cryptocurrencies have changed the global economic landscape thanks to the “Blockchain” technology that guarantees greater security in capital transactions around the world and privacy without relying on governments.

It is therefore necessary to know how and how many of these cryptocurrencies work, what different investment options are available and how to invest in digital assets. In addition to Bitcoin, there are hundreds of cryptocurrencies, investment platforms and wallets for storing cryptocurrencies.

credit cards

A large part of the country’s economy is driven by credit, finance and consumption. And if a credit card is for you an extension of your ability to pay, and you’re using it to buy things you do not have money for, it’s a big financial problem. Conversely, if you understand that these cards finance you for 30-45 days, and that if you make smart purchases that you can pay for, these cards will offer you great benefits.

Long-term investment

A Chinese proverb says, “The best time to plant a tree was 20 years ago, and the second best time is now.” This logic also applies to your investments.

We often feel guilty because we did not start investing our money early and we think it is too late and we will not get the expected results, but the best time to invest your money is now, you have to start today and have a long-term investment horizon.

When you think long-term, you stop reviewing the daily volatility and focus on the value that these investments add. You can open up new investment opportunities that take a little longer to earn.

Real wealth is created over time thanks to compound interest and assets that generate new sources of income, but we never learned this lesson about money in school.

credit history

Credit history plays a vital role in our personal finances. A good credit history creates a positive image of us at banks and financial institutions; If we have a good credit history, it means we will be able to get credit more easily and access new resources.

And if you think that not paying your debt on time, or worse, not paying it will affect your credit history, then you are wrong, and you should check your credit history to avoid future surprises.

save concept

The vast majority believe that the rich are people who brag about their money and spend it recklessly and lead a lavish lifestyle, but the common factor among millionaires is that they lead a frugal lifestyle and do not care about appearance, and are more interested in to make money grow for them rather than spend it on luxuries. What’s the point of making a million dollars profit if you actually spend double that amount? Therefore, it is important to learn how to control your expenses and lead an economical lifestyle.

The importance of investing in the development of your financial culture

The author stressed the need to start investing in the development of your financial culture, whether by reading financial books, signing up for training courses, reading articles on the internet, tips or any other resource you have.

If you want to avoid these economic problems, start educating yourself, understand how money works, and learn the basic concepts of investing.

If you start today, you will have many tools at your fingertips to make informed decisions about the future, you will begin to see money as a way to achieve your goals, and you will understand the available methods to your financial freedom. to reach.

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