Albert Einstein already knew that ‘The most precious things in life are not those you get for money.’ True words from someone who did not place great value on material things throughout his life. Yet even the greatest critic of consumption knows: living without money is nearly impossible in today’s world. Especially in our line of business, handling one’s own finances well is extremely important. While some people have a good feeling for numbers, others avoid facing their own finances for as long as possible. But only good planning will lead to success. And in order for you to keep your finances under control in the future, we have collected five helpful bits of advice in this article.
1. Create basic capital
Every sustainable financial plan starts off with creating a solid basic capital. A regular income is essential for this. Always put aside 30% of your income immediately. This money is kept in a separate account and may not be touched by you. 10% of your income, however, you may spend on whatever you like. With the remaining 60% you will cover your overheads.
2. Keep a household account book
Stay on top of things! This is one of the most important basic principles in the world of money. Whoever only ever consumes without keeping an eye on their expenses will hit a financial shortage sooner or later. An effective tool to keeping your finances under control is keeping a household account book. Note your income and expenses meticulously in a small book and you will see that it will become increasingly easier for you to stay on top of your finances.
3. Invest your money smartly
Once you have acquired some basic capital it is time for you to let your money work for you. Despite low key interest rates there are still profitable possibilities for investments today. No matter whether in the shape of a savings book or equity fund, there are options for everyone. Yet the golden rule is: only agree to banking business that you truly understand! Inform yourself through your bank advisor and do not take any unnecessary risks.
4. Protect yourself against losses
Nothing is worse than losing the greater part of your hardly earned money due to risky financial business. Thus, never place your entire capital in one basket. High returns are usually linked to high risks. If you enter into such agreements, then only use money that you can make do without. It is more advisable to invest your money in different, secure forms of investments.
5. Think of the future!
Finally, you should ensure that you also have financial reserves in the future, for example by investing in real estate. Homeowners are not only capable of generating a passive income by letting living space, but can also relieve following generations financially.
With these five bits of advice you will turn into a financial expert. Should you have further ideas on the topic of finance, let us know and contact us via: email@example.com