"Do what you can, with what you have, where you are."
-Theodore Roosevelt
Loans and dept
There are many ways to interpret "good money management", for some people this means save every Pennie you can muster, for other people it means just stay out of debt.
Well let me just start of with saying debt it's self is not bad, in fact getting debt and quickly paying it off works well on your credit report.
There are two types of dept, productive debt and unproductive debt, let's have a look at some examples of productive debt shall we?:
Mortgage
Loan for high interest savings or pension
Business development
Stock investment*
Now let's look at some unproductive debt:
Loan for a holiday.
A car.
A new 3D HD 64 inch TV.
Down payment on rented accommodation.
A loan to pay of more loans
Do you see the pattern there? Productive dept, In the long run will give you more in return rather than unproductive which you will only end up losing capital on.
So we have now established that you will not be getting loans for unnecessary porpoises, we can all rest peacefully in the knowledge that our money is not flushing down the proverbial toilet.
Fund and actual income.
When you get your pay what is the first thing you do? Well the first thing I do is pay all my bills, after that I add money into my savings, that leaves a bit of cash for food and my self. I cannot stress this enough so I will italic it - don't spend ALL your money, and don't save ALL of it.
If you save all your money you leave nothing for yourself and life becomes very, very boring. On the other hand if you dwindle all your cash away in crap you find you your cash is going down that proverbial toilet again.
Let's say that rent/mortgage and bills is 40% of your monthly income, 20% goes to food then 30% goes into savings, the last 10% is you money, do what ever the hell you want with it. Go see some films, get an experience days, buy some nice cloths, hire an escort for a while or just roll around in it.
This word is very important so I am going drill it into your mind,budget budget budget budget budget budget. Making a monthly budget is the most important part of effectively spending and saving. It is easy enough to make a budget, the hard part is sticking to it. I have seen many people (my self included) say "I need to save some money I am spending too much" they make a budget but then slip back into there old spending habits. My personal way of dealing with this is to spit my income into three bank accounts, one for savings, one for rent bills and food and one for me money.
unnecessary spending
do you really need that new handbag or that nice umbrella you found by the checkout? the answer is... drum-roll please.... no!... the biggest waste of money is on useless crappy impulse bought items that you will use once and then forget about. Next time you go shopping every item you pick ask yourself "do I need this?" (not out loud people will think your a bit nuts) if the answer is no then put it back. Lets have an example, you are in your supermarket and you pick up a pint of milk and you ask your self "do I need this?" "yes", good put it in the trolly, then you pick some expensive looking tea bags "do I need this?" "no" put it back.
Now if you do want to spend it out on something nice go ahead, what's life without its pleasures right? but that the money you spent out of your "me money" that I mentioned earlier.
Risk management and gambling.
Let me just make this clear: I do not support gambling, Gambiling addiction is a serious problem and should not be taken lightly, you must fully know what you are doing and must never bet with money you need.
Okay, the good people of the UK are one of the biggest gamblers in the world, with hopes of that "big win" so why aren't we all millionaires? I will let you into a secret you have more chance being struck by lightning than winning big, ever heard the expression "the house always wins"?
say your at a casino, there are the slots, roulette, blackjack and poker ring games, which ones will you be drawn to? first the slots because they have a massive £1000000 jackpot sign over them, i will tell you this now, you will never see that sweet mil, the odds are stacks so far against you you are might as well hand your cash into the casino owners hands.
the next one you go to is the roulette, you have a 1:36 chance for it to land and any one number. the only sensible bets would be black, white, odds, even, 1 to 18, 19 to 36.
the quickest way to lose all your funds is to place all of it on one high odds bet, you are more likely to win 2:1 bets 36 times that win 1:36 once.
Personally I avoid those types of games all together and that includes sports betting, - that's just another waste of cash unless you put in countless hours studying your team's skill but for most punters that wont even cross there mind.
Now the only gambling games that I play are ones that require a mix of skill and luck, more specificity, poker and blackjack. to be honest with you I never win much, I get back properly as much as I put in, but then my out goings are not minus figures.
don't worry this little rant about gambling is going to lead to something. Many I have talked to have had pretty much this response to gambling "oh no I don't waste my hard earned money on that like a fool," but when I mention the stock market there eyes gleam with "investment" but they don't seem to realize there is not a lot of difference between a game of blackjack and the market. (this next point is important read it very carefully,) you need money to make money but profit is not possible with out risk, the higher the potential profit the higher the potential risk. Don't get me wrong investing in stocks is a great way to provide extra or main income but don't just dive in heads first, do research, lots of research. they say that 95% of traders fail, there are many reasons why they do, the main one is they get suckered in to the idea of easy bucks, they understand how the market works and lose a very large amount of cash.
I take an interest in the foreign exchange market, I have been studying it for just about two years and am only starting to get grips of it, over night millions do not happen it takes alot of time and effort.
that concludes Money management- the brief key to success, I hope that what I have written has helped you in any way, now go out young grasshopper into the big wide world safe in the thought that you wont blow all your money at once with a lady of the night. :D
0 comments:
Post a Comment