Recently, I read the book ‘Rich Dad, Poor Dad’ and I felt astonished by the explanations given by the author about money that is misunderstood by lower and middle-class people.
We learn a lot about various subjects in school and college, but we are never taught about the basic finances that are necessary for living a financially stable life.
I want to share some important lessons that are very essential to knowing how to lead a financially stable life.
Let’s dive in.
Assets and liabilities
Most lower- and middle-class people don’t have awareness of what an asset and a liability are.
Since my childhood, I have been hearing this: It is essential to own a house, and it’s an asset.
The dream of most people is to construct or own a house. And for that, people take out loans and spend the rest of their lives paying the interest on the housing loan.
People think that owning a house is an asset, which is actually a myth.
So what is an asset?
An asset is something that gives us something when we buy it; it gives us a regular income for our entire lives unless we don’t sell that asset.
But owning a house can never be an asset because we pay for it until we live there, which certainly becomes a liability.
It doesn’t mean you should not buy a house. Definitely, one should have a house, but before buying a house, avoid taking too many loans and start buying assets that could pay for the loans on your house.
Always remember that an asset is something that generates money for you even if you don’t work, but a liability is something that takes money from your pocket.
So think twice about whether the thing you buy is an asset or a liability before buying it.
…
Keeping the expenses low
I have seen people who spend mindlessly without caring about the amount of money they spend lavishly.
People prioritize everything, but they will be ignorant about prioritizing expenditures.
Money determines our survival and lifestyle, and being ignorant about it can make us fall into the trap of credit cards and loans.
Many lower- and middle-class people work hard, earn a little money, spend it mindlessly, and finally fall into the trap of loans and debt.
What I feel is that people who don’t value their money don’t value their lives and the hard work they put in to earn that money.
It’s not about how much money one earns; the most important thing is how one spends that money, and intelligence and prioritization are crucial to being financially stable.
…
Work to learn, not to make money
In today’s world, people want instant success, money, and fame.
The money one wants to earn is just delusional, and the truth is the process we go through and the skills one learns to do a job and earn money.
I have seen many of my friends who are just freshmen want to earn money that an experienced person earns. I just feel pity for these guys.
They are all focused only on money, so I am wondering how these guys will learn the skills that are required for the job.
A person who focuses only on money will never earn that money.
The money one earns is never permanent, but the skills one learns will help him earn the money he dreams of earning.
So one has to focus on the process, improve, and enhance oneself so that money follows.
…
Giving helps you receive
The most helpful hack that can be used to earn money is to start giving money with happiness and exuberance.
Helping others financially must be done as humans, as this kind of gesture saves humanity.
I sometimes, when spending money in uncertain cases, feel frustrated. I ask myself, ‘Why am I now stuck in a situation where I have to spend money?’ I think everybody must have gone through this situation.
Start spending money happily. When you start giving happily, it will return to you happily.
A regret about spending money doesn’t do anything good to you, but it stops the flow of money for you.
…
Final thoughts
Money has become a crucial part of our lives; it has started ruling our lives in this modern era.
It’s important to be intelligent in spending, saving, and investing money. Everybody has different needs and lifestyles, and people must be careful about prioritizing their needs.
Saving money is equally important to how one spends it.
Think about investing the money in assets that can make one financially stable. Be safe with investing, as even it has risks involved in it.
Our lifestyle should not make us fall into the trap of debt, and one must enhance their lifestyles as they grow financially.
There are many people who want a rich lifestyle but never think about their financial status and finally get crushed by debt.
Choosing one’s lifestyle is important to regulate expenses properly, which is ultimately what I feel is one great way to be financially stable.
—
This post was previously published on medium.com.
***
From The Good Men Project on Medium
 |
 |
 |
 |
***
Join The Good Men Project as a Premium Member today.
All Premium Members get to view The Good Men Project with NO ADS.
A $50 annual membership gives you an all access pass. You can be a part of every call, group, class and community.
A $25 annual membership gives you access to one class, one Social Interest group and our online communities.
A $12 annual membership gives you access to our Friday calls with the publisher, our online community.
Register New Account
Need more info? A complete list of benefits is here.
—–
Photo credit: micheile henderson on Unsplash
