Today it is important to consider several things which some people, especially Romanians, might tend to think, concerning the way they should think and act about money. These have been observed based on my own experience and different lectures, studies and books that I have read concerning how to manage finances.
1. It’s good to have some money aside
There is the tendency to think that there is a stash of money that you need to have in some place, generally, proverbially thinking about different directions that those money might take.
Supposedly you fall sick, supposedly you decide to open up a business, supposedly you get fired, supposedly you need to have some securities aside for your old age. But the truth is you need to have several accounts, separately, and you need to have money for all of these directions and then some more. Therefore, the money for rainy days are not money for retirement. The money for retirement are not money for accidents. The money for accidents are not money for insurance. The money for insurance are not money for vacations. And all of these are not economies. So the truth is you have to have several accounts, separately, in which you have to save money. So, individually, you will have to take into consideration all of these necessities and save for each of them, not for just one goal. “Some” soundse very vague. Be precise and prepared.
2. Loan now, pay later
We live in a fast-forward society, that thinks of money as a commodity that can be obtained virtually instantly from a bank, based on the fact that many and each individual are/is employed and produce/s the same kind of money as the day before. So, there is the tendency of living on borrowed money and having the full experience now, better than tomorrow.
What about always thinking that now is going to be better than tomorrow? The problem with this thinking is that if you do think that your whole live is worth living now, better than tomorrow, it automatically means, that tomorrow, for sure, will be worse that today. So the people who work in personal development, prefer to do the opposite, to save money and not to loan money. Why? To make sure that tomorrow is going to be better than today. The way that you make tomorrow better than today is to give up something now, in order to receive something better and bigger in the future. There is such a thing as good debt: debt you make to create capital that multiplies and increases in value, but that’s not the kind of debt most people like to make.
3. If you recover all the money you have invested in a business, that means you break even and that’s a success.
That is false. If, from a business, you manage to get only the money that you invested, that means you have been working for free. In truth, in any kind of business, you have to take into consideration all the costs that you don’t see. All the costs which are in inflation, cost of opportunities, and you also have to take into consideration that having your own business, also might mean making more money that you would being hired. Usually, this is what some people consider. So, if all that you’re doing is just making sure that you get all the money that you invested from a business, that means that you should stop before it’s too late. And reconsider the situation.
4. Insuring the future for the family is the most important thing that you can do
Of course, it is important that you take into consideration the necessities, the needs and the wills of your family but I will tell you what is even much more important. That is to take into consideration the needs and the wants of the audience that you are serving. Therefore, it is important for you to always, always, always think of making your clients happy. If you put on the first place making your clients happy, then the family will enjoy your business. But if you put your family first, and think that there is a competition between the needs of your family and the needs of your costumers, it means the you do not have a good balance between the professional life and the personal life. Therefore, you are not a good businessman. So stop, before you hurt yourself. Change the way that you are thinking.
5. I will pay this as soon as I will have the money.
Don’t make assumptions about the time in which you will make payments. Always have some money aside in order to buffer up the periods in which you are waiting for liquidities.
You cannot make responsible decisions based on money that you assume you will receive in the future. The money you are contracted and hope to get are not money that you have gotten. So, better wait until you do have those money and something extra in order to make engagements for paying. This is especially true for personal expenses. Of course, we are not talking about big corporations’ finances. We are talking about small business ownership, entrepreneurs, freelancers, which have a limited budget and want to make payments as soon as they will have money. But making payments as soon as you will have money for it means that you might be running out of money when there is a situation that cause for that necessity.
These have been just some of my personal considerations about financial independence and what some think. I have been reading books and research, I have been listening to audio programs for the last 13 years and I have never found in one resource all that you have available in this article. Therefore, please take into consideration the fact that you need to take all this and verify it in you own experience.
Please come with your own experience and your own suggestions by commenting to this article.