Want to make money? Want to keep the money in your pocket and save money for any eventuality? I leave you the three pillars for your financial success.
They do not guarantee success but increase their likelihood. The key is not to make money the engine of our lives and give it the importance it really has.
Control Your Money
The first pillar of your financial success is the correct organization of your personal finances. The most serious sign of financial turmoil is not knowing where to spend your money. Control your expenses. Know your consumption habits. Know your priorities and get to know yourself.
The organization of personal finances is much debated in my books “Personal Finance Manual” and “How to End Debts” whose reading I recommend. In these books I talk extensively about basic rules of saving, ways to better control money, and mechanisms that can drive us to control money without it controlling us.
Define Your Investment Strategy
The second pillar of financial success is the rigorous definition of an investment strategy and policy. We speak not only of assets to ensure short-term family financial security (the well-known emergency fund) but also of your investment portfolio to meet your longer-term goals, dreams or needs (such as studies of children).
When people hear about investments they are always tempted to say that it is impossible to invest because they either have no assets or have no knowledge to invest or both. Curiously, both justifications turn out to be just excuses that bring us immobility.
It is always possible to increase our assets (for example, debt reduction is part of the increase in assets). And it is always possible to acquire the knowledge to save money. At worst, follow some of our tips for saving money. You’ll see it’s worth it.
Master Your Emotions
The third pillar that assumes to be transverse to the different dimensions of life is the control of emotions. I do not believe that people can always be rational all the time nor do we want it to be so. However, speaking concretely about the investment world, it is crucial to control emotions and take a more rational stance in order to succeed in the long run.
We can not make the investment in a stock market in a game of chance and chance because generally the experience does not go well. And never forget that negative emotions tend to be twice as strong as positive ones.