Developing a Knack With Money
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In today’s culture, many people find themselves endlessly struggling to manage their finances. They often work more just to spend more and, as a result, end up where they’ve always been — trapped! But it doesn’t have to be this way. When I first arrived in America, I had $92 to my name. Today, I’m proud to say I’m in the top 1% of earners nationwide. You can be too if you learn to take control of your money. Here are some ideas and principles to help you make a quantum leap in your finances, get ahead of the game and escape the economic rat race for good!
The most important step you can take to manage your finances is to make a budget — and stick to it. According to a recent Gallup poll, 65% of Americans do not budget. It’s a shocking fact, but many people have no idea where their funds go every month. They don’t control their money — it just disappears through their fingers with a series of small and seemingly inconsequential decisions. This is where a good working budget can change everything. Set aside what you need for living expenses every month and then invest and save the rest. It’s critical to create a surplus like this. You can’t borrow your way to a fortune!
When it comes to investing, my top tip is to invest in what you know. If you can’t pronounce it, don’t invest in it! I still believe that real estate is the single greatest investment there is. But it’s vital to remember that there are only two reasons to invest in real estate: cash flow and appreciation. People often try to have both, but that’s a mistake. If you try to hit two targets, you will invariably miss both, so decide the purpose of your investment and then stay the course long term. As Warren Buffet once said, “Only buy something that you’d be perfectly happy to hold if the market shut down for ten years.” For optimum results, know what you own, know why you own it, re-evaluate annually and then re-examine your strategy every three years.
Remember, you have to take care of the dollars so you can take care of the hundreds. You have to take care of the hundreds so you can take care of the thousands. And you have to take care of the thousands so you’re able to take care of the millions!
Listen to episode #150 of “It’s a Good Life” to hear more tips and advice on managing your finances. Click here to listen.
Brian Buffini
