Have you ever thought about how to improve your personal finances? I have good news for you because the following 4 tips are ways that are proven to improve your personal finances if you use them repeatedly.
- Focus on Building, Creating, or Buying Assets
The most effective way to accomplish financial independence is through financial education. Financial education tells us the difference between an asset and liability.
Assets put money in your pockets while liabilities take money from your pockets. The wealthy work for assets and not money.
The four major common assets that makes a person wealthy include:
2) Paper assets (stocks, bonds, mutual funds, etc)
4) Real estate
The chart below shows a huge income and wealth gap among US. Households according to U.S. Census Bureau of Statistics.
The wealthy continue to get more wealthier because they are using wealth building techniques like using assets to create wealth continuously with no end.
- Cash Flow Management
The foundations of wealth creation through cash flow management are listed in the following sequence:
-Produce income and/or profits
Most people have jobs while others have their own businesses but both produce money through wages or profits.
After making this money saving portions of it helps start the journey to building wealth. As you save you begin to study investing and opportunities to grow wealth. I had a friend I was talking to about investing and she didn’t know where to start.
I recommended she develop goals then explore a wide range of investing opportunities to see what would best align with her overall goals.
Once you make the money, save it, and study investments next you invest your saved money into investments.
- Set Goals
One of the most effective ways to improve a person’s life is to set goals. There are case studies that show that setting goals can enhance your ability to make more than those that do not.
Check out what this Harvard study reveal when people set goals. To sum it up here was the following results from a 10 year study starting in 1979:
- 3% in the class had written goals and plans
- 13% had unwritten goals
- 84% had no goals at all
The study explains that ten years later 3% of individuals with written goals had a higher net worth than the other 97% combined! To be exact, the 13% with unwritten goals earned twice as much as the 84% with no goals.
Even more incredible, the 3% with written goals and plans earned ten times as much as all the others put together. It’s a fact.
People who have clear, strong goals, especially written ones, are far more likely to succeed than those who don’t.
- Lifelong Learning
People often say knowledge is power. Well, this is not entirely true. The only time knowledge is power is if it is practical knowledge that can be applied to getting a desired outcome or result.
When you learn something, it is important to find ways to practice it in your life especially if it will make your life better.
Most people when they finish traditional school they stop learning and growing. Some are lazy while others feel so confident in themselves that they see no need to continue to learn.
This is a huge mistake. Many if not all wealthy people say that continued learning has played a role in their wealth and success.
This is a fact and if you follow wealthy people, they admit this in their interviews. Warren Buffet, a legendary investor and one the richest people in the world has the habit of studying an average of 5 to 6 hours a day.
Just imagine the knowledge he has acquired in his length of time in business. It is massive.
Average people can become wealthy if they follow and do what wealthy people are doing. It does not matter who you are or where you come from you can start now and begin your journey to wealth.
If you found this information helpful then join the movement of growing wealth creators here for a free ebook on wealth and prosperity secrets along with a BONUS free online course.