This is the tools we wished we had earlier on to build our wealth, listing in insight what worked as well for us as well as the mistakes we made you can hopefully learn from and avoid. We wish it will serve as a blue print to become a financially independent every day millionaire you’ll be able to replicate!
Financial literacy is key to understand how your money can work for you, so you can better manage your money and grow your wealth. A lot of it is common sense, which is often missed and sadly in most western education systems is not taught in school, while it’s critical knowledge, fundamental to build one’s prosperous future.
We’ll list here the main posts that we hope, will help you understand the basics of personal finance, brush up your financial IQ and start your investing journey on the right foot.
- Defining Asset vs Liability
- Is Debt Bad?
- What Are The Main Investment Types?
- The Importance Of Investing And Investing Early
- The Power Of Compounding
Once you understand the basics of how to sensibly allocate your money, you’ll need well money. A good first step is understanding where you can save money, because it’s usually readily actionable and it’s a good way to plug the main holes in your budget before earning more money. After all what’s the point of earning more money if it’s just to spend it without taking the opportunity to have it working for you?
An important step towards financial independence is to reduce spending to free up capital to pay down debt if any or to boost savings so it can be invested. For most people the main expense categories are housing, transportation and food. Finding ways to reduce these expenses will go a long way and can dramatically shorten the amount of time it takes towards financial freedom.
We could dive deeper into more ways to save money, but at some point you can only save so much. Focusing on the biggest expenses will give you the biggest bang for the buck. Once you get your spending under control, your time will be better spent in finding ways to earn more money rather than trying to save every penny you can.
Increase Your Income
By now, we hopefully have a good understanding of the basics of personal finance and we have our spending under control. It’s now time to find ways to increase our income, so we can save more to invest more and eventually become financially independent.
- Target Higher Paying Jobs
- Increase Your Income From Your Day Job: Ask For A Raise!
- Always Try To Get Some Equity Compensation
- Beware Of Lifestyle Creep
With enough income and being conscious to not fall for lifestyle creep, we should now have some disposable income available to invest. The income from investments is what will allow us to no longer need to work for money.