Money & the psychology of money
JUST IMAGINE, IF we were all #financially_literate … What would be the results of that on our finances? What kind of financial decisions would we be able to make that would add value to our lives?
Let us just take one area:
IF WE WERE ALL #FINANCIALLY_LITERATE WE WOULD BE ABLE TO MAKE AND LIVE BY MONEY RULES
Who makes the rules? We do
Who obeys these rules? We do!
Who would benefit from this: We would.
What are the rules?
This rule says you put aside at least 10% of all you earn into a “wealth account” This money is only used to build wealth. It does not come out of this account unless it is going to make more money, and then it comes back.
This rule puts you in charge of ensuring you expend only what is beneficial to you in a measurable way. No wastage of any kind allowed.
This is a rule about which investment classes do you focus on for how long or to what end. You focus your investments until a measured level before you scatter elsewhere. You control your diversification strategy so that it doesn’t leave you too thinly spread.
4. The Protection Rule
Protection is about getting the right insurance cover for all your valuables. But is also more about the legal entities and tools that you should use such as incorporated structures and trusts. There is a great wisdom in using proper structures to protect your money than keeping it in your own personal name.
5. Debt and Liabilities Rule
If only more of us made and lived by this rule, we would not be overly indebted. Set a percentage of debt you are not willing to go over and stick by it. You can’t increase your indebtedness until you can expand your income. Don’t go into more debt until all previous debt is dealt with according to the rules. Place a limit on consumer debt and on investment debt.
6. The Sharing Rule
You would never share beyond your ability to give. You would set clear limits to your giving and stick by them.
7. The Commitment Rule
This is the guardian of all other rules. You commit to commit to your rules, otherwise you punish yourself …