Three
mysteries of money have baffled people from time immemorial:
1-Why
do a few people have most money and most people have very little?
2-Is
there a reliable way to make all the money you need?
3-Can
money buy happiness? If not, what’s the point of it?
The wealthiest 20 percent of Americans own 84
percent of money.The planet’s top 20 percent corner 85 percent of money. These
numbers are shocking. Money is more
powerful than governments.
Money
is a means, not an end. Money is for freedom, not slavery; for security, not
worry. Unless money is used to give you greater freedom and happiness,
accumulating money is a burden.
Be
specific. You want to be free of money worries? Fine, but what does this mean?
Enough to live with no income for six months? Two years? Having a particular
sum of money in the bank?
How
can we attract money?
If
we never save money, we will always be poor, no
matter how much money we earn. Most people have very little money
because they don’t save. People with the most money have typically
saved and invested it for many years. Compound interest multiplies savings in a
breathtaking way.
Can money buy happiness?
Yes, if you’re poor. “Money is better than poverty"
If we’re starving or homeless, money can
bring a better life. But
beyond a certain point a surprisingly low point more money doesn’t deliver more
happiness.
More
money can be a trap, leading to more spending, more commitments, more worry,
more complexity, more time on administering money, more desires, more time at
work, less choice about how we spend our time, and degradation of our
independence and life energy. Our lifestyle locks us into our “workstyle.”
In
earning money, we sell our time, which is really our “life energy.” The effort
to make a living consumes our life. We underestimate how much life energy is
being consumed by our work. We overestimate what we are getting in return.
That’s a bad bargain.
When you break the link between work and
money, you give yourself the opportunity to discover what your true work is it
may turn out to be totally unrelated to what you are currently doing for money.
Through
saving and accumulating money, we avoid trading our life energy for money. With
enough investment income, we can stop depleting our life energy through
unfulfilling work. We choose our work and our hours. By doing what is important
to us and what we enjoy, we multiply our life energy.
We
might decide to use savings to subsidize our ideal life-and work-style. Maybe
work six months a year, then travel round the world or undertake a project with
our family. Or work three days a week, routinely enjoying long weekends. We
might take a pay cut and work where we want, or become our own boss.
Use
time and money intelligently. Make
less go further. The quality and value of time soar once we control them.
There
are many difficult ways to save. Budgeting is one. Budgeting doesn’t work
because unexpected expenses always blow you off course. Happily,
there’s an easy route to saving.
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The basic route to making the money you need
1- Save
and invest 10 percent of your income before you receive it by having it
automatically channeled into a savings account.
2- Do
this as early as you can in life which means NOW! Frankly, this is 95 percent
of the advice that anyone needs. This is the easy way to end your money
worries. No other way is remotely as powerful.
3-No
investment is as good as paying off your credit card debt.
4- The next best investment is to “retire” all your
other debts. Start with the most expensive. Even though mortgage ,property
bond , interest rates are now very low, it’s almost impossible to find an
investment as attractive as paying off your mortgage, when you have the savings
to do so.
5- Cut
up your credit cards. You’re bound to spend less. If you need a card, get a
debit card so you can only spend what you have in the bank.
6- Be
more selective in buying things. Only spend money on the few items that really
make you happy. Spend more on the 20 percent that gives you 80 percent of
pleasure, and less on the rest.
7- Ask
yourself, “Do I really enjoy this item I’m spending money on? Is it really in
the 20 percent of items giving me 80 percent of satisfaction from spending?” If
not, cut it out. You’ll have more money for the best 20 percent of spending and
more life energy too ,you won’t need to spend so much time earning.
8- Go
for cheaper items that deliver most of the benefit. A two-year-old car may be
95 percent as beneficial as a new car, at just 60 percent of the cost.
Second-hand furniture may cost only 20 percent of the new price.
9- With
spare cash, buy assets that promise income or an increase in value: for
example, any sort of land or property, art, or collectible items. Pick anything
that delights you and appreciates.
10- Save
half any pay raise. Increase your automatic saving before it hits your bank
account.
11- Spring
clean each year get rid of the clutter. Give away the small items, sell the
valuable ones, and invest the proceeds.
Take the action NOW
You’re
at a crossroads.
You
can go ahead and instruct your bank to deduct 10 percent of your monthly income
and put it into a savings account. You can then look forward to a life without
money worries. Or
you can do nothing.
Go ahead. Do it now. It takes five minutes to
arrange. The benefit, for the rest of your life,, will be enormous.
Imagine you’ve freed yourself from money
worries, perhaps even accumulated a small fortune. How is it going to make you
happier? How far will your new-found riches deepen and improve your friendships
and relationships, which, as we’re about to see, add the most joy to life?
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