So that the goal of your life is not to pay back debts.. 10 financial tips for entrepreneurs | management
Have you ever thought that money management is very difficult? This is partly due to the fact that we were not taught money lessons at school.
In a report published by the Spanish website “Imbrindiando Asturias”, writer Diego Ortiz provides valuable financial lessons to help you understand how to manage your money.
inflation
Inflation is mostly 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; If inflation was, for example, 10%, it means that the prices of products increased by 10% on average during the year.
associated with inflation devaluations; The higher the exchange rate of a currency such as the dollar or the euro, the lower the value of your currency, and to counter this, you need to start saving in dollars to protect yourself from inflation and depreciation of the local currency.
Common interest
Compound interest is the secret to the wealth of many millionaires, what compound interest does is multiply money over time/ the more time passes, the more likely your money will grow.
But what caused this growth? The interest generated by the invested capital becomes part of your capital, and the interest is higher each time.
For example, if you invest $10 at a rate of 10% per year, you will make a profit of $11 the next year. And when you reinvest, your capital will not be $10, but $11; Your annual profit becomes $12.1, and so on.
Invest early
The writer emphasized the need for early investment to earn more profit from compound interest and to develop a wealth creation mentality from an early age. And if you haven’t invested yet, that doesn’t mean you’ve lost your chance.
Although your money won’t have much time to grow, it’s best to start investing today and don’t delay.
Many people think that accumulating wealth is a difficult goal to achieve and that only a few are lucky, but they are wrong. The formula is clear: if you want to build wealth, you must save and spend less than you earn, invest your money wisely regardless of your job, and take advantage of the benefits that accumulate over the years.
Debt is good and non-existent
Not all debt is bad; There is a certain type of debt that allows you to benefit and helps you achieve financial growth.
Understanding the differences between the two types of debt is one of the financial lessons no one teaches us in school that is a necessary foundation for building financial wealth.
Bad debt is intended to satisfy short-term needs or whims that do not generate future profits or returns. Bad debts are all emotional purchases and things you buy because you don’t have the money for them.
Unlike bad debt, good debt allows you to acquire capital to generate additional income, such as project debt.
cryptocurrency
Cryptocurrencies have changed the global economic landscape thanks to “Blockchain” technology that provides greater security in capital transactions worldwide and privacy without relying on governments.
Therefore, it is necessary to know how and how many of these cryptocurrencies work, what are the different investment options available and how to invest in digital assets. Besides Bitcoin, there are hundreds of cryptocurrencies, investment platforms and wallets to store cryptocurrencies.
credit cards
A large part of the country’s economy is driven by credit, finance and consumption. And if your credit card is an extension of your ability to pay and you use it to buy things you don’t have money for, then that’s a big financial problem. On the contrary, if you realize that these cards finance you between 30 and 45 days and that if you make smart purchases that you can pay, these cards will provide you with great benefits.
A 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 didn’t start investing our money early, and we think it’s too late and we won’t get the expected results, but the best time to invest money is now, and you should start today and have a long-term investment horizon.
When you think long term, you stop looking at daily volatility and focus on the value these investments add. And you can open yourself up to new investment opportunities that take a little longer to pay off.
True wealth is created over time through compound interest and assets that create new sources of income, but we never learned this lesson about money in school.
credit history
Credit history plays an important role in our personal finances. A good credit record creates a positive image of us with banks and financial institutions. If we have a good credit history, it means that we will be able to get credit more easily and reach new sources.
And if you are one of those who believe that not paying your debts on time, or worse, not paying them, will not affect your credit record, then you are wrong and you should check your credit history to avoid surprises in the future.
The concept of savings
The vast majority believe that the rich are people who brag about their money, spend it recklessly and live a luxurious life, but the common fact among millionaires is that they live a frugal lifestyle and do not care about appearance, and are more interested in the money growing in their favor than they spend it on luxury. What’s the point of making a million dollars when you’re actually spending twice as much? Therefore, it is important to learn to control your expenses and lead an economical lifestyle.
The importance of investing in developing your financial culture
The writer emphasized the need to start investing in developing your financial culture, whether by reading financial books, taking courses, reading articles on the internet, advice or any other source you have.
If you want to avoid these economic problems, start educating yourself, understand how money works and learn basic investment concepts.
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 means to achieve your goals, and you will understand the methods available to achieve your financial freedom.
