Financial Habits You Need To Get Rich (Part 3)

The last instalment of this series focuses on teaching yourself, and learning how to do things that will benefit you, rather than others.

Learn How to Invest
This is one of the greatest assets that you can either teach yourself, or learn from the best.

Knowing how to invest your money to make more, or to increase its value in other ways is a great way to start making money that you never thought that you could.

Things like buying something that you can lease out the wider community (like a trailer) is a good example… you may have to pay a bit of money for the trailer in the beginning, but if you work it right, and you have people renting it every day for a set fee, you’ll find that you make your money back sooner than it took you to make it in the first place!

Stocks, the trade market and the virtual stock trading are other profitable places to make some extra money, and of course, there is always a start-up (however much less than an asset) and the rewards are slower to be seen.

But although this is the case, there are generally always rewards, given that you do your research…

Never Stop Learning, Researching or Reading
You may think that heck, you haven’t read an actual book since you left school, that reading is for nerds, or it’s just not for you cause it makes you sleepy; but once you realise that most of the more wealthy people in the world have never just sat back and waited for their fortune, you should start to think differently.

Those that want to be successful work hard to be where they are today, whether that be putting in long hours or dedicating an hour of a morning or night to reading a book based on their niche or interest area.

If you’ve read some of our other posts about good habit making, you’ll know that it takes 66 days to make a good habit. If you begin to get yourself into good habits (such as reading and researching) you’re likely to become addicted to knowledge and never want to stop, which is GREAT!

Don’t Focus On Other People
This is one of most people’s biggest downfalls – worrying what other people are doing, rather than what they’re doing.

Examining what your colleagues are doing to get them a promotion can be good, but once you’ve realised what that is, don’t focus on it, telling yourself that that’s what you have to do to keep moving forward.

You’re not a clone of them, you have to find your own strengths and weaknesses within yourself and work hard in these areas to make yourself stand out. Once you’ve done this, you may find yourself on top of the podium.

Sometimes it’s hard to think outside the box, or even begin to work out which direction you should take yourself to make more money, and that’s quite okay.

Begin researching (and reading posts like these) to try to set you in the right direction!

Don’t forget you’re always welcome to email us for help!

 

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Financial Habits You Need To Get Rich (Part 2)

Part 2 of this series will cover four big things to decrease your spending and hopefully make you realise that the things that you do now, you totally take for granted and honestly, don’t need as often as you may think.

Live Below Your Means
Okay, so what does this actually mean?

Living below your means is a typical thing that you may already be doing without realising.
It simply means that even though you have enough money at the time to afford a $35 steak for dinner, you opt for the $23 one instead, because you know you will still enjoy it without the hefty price tag.

It means that you don’t go out and buy a boat, or book a holiday, or shop for a new outfit every weekend. Even though you know you can afford things, doesn’t mean that you should have them.

Think of it this way, if I spent $70 on a new outfit every month, within a month I could have saved that $280 to put towards something much more rewarding, such as an asset (e.g. a trailer to hire out, bitcoin/virtual money, stocks etc.)

Don’t Waste Money On Unnecessary Things
It’s just a fact that the most common unnecessary purchases are clothes, food and drinks.

If you’re out and you have to buy take-away then so be it, but there are the possibilities to eat before you go, take your own, or find a supermarket close by where things are much cheaper.

Certain consumables such as iced coffees, soft drinks and chocolate bars are also a bank-killer, and even though they’re regularly on sale and they provide people with a quick pick-me-up, they’re unnecessary and an apple would do the same job for much cheaper.

Op Shops are also great to save on clothes, there are some people that are willing to give away just about anything, and you can find some real winners in second hand clothes!

Live In A Cheap House
This may seem like a huge no-no to you, but if your rent is $150+ per week, you should be searching for somewhere cheaper.

Even though you don’t want to be living in a run-down shack, we’re sure that a few extra cockroaches won’t harm you, there are plenty of cheap solutions to that.

As long as you’ve got a roof over your head and the facilities to live comfortably, the low price tag should be a blessing in disguise. The amount of money you can save over a few years may even be enough to put down a deposit on your own house.

Don’t Finance A New Car.
This is one of the biggest mistakes that anyone can make. Buying a brand new car from the dealership is a huge waste of money.

Why not?
We don’t want you wasting your money, that’s why! By the time that you drive out of the dealership, your vehicle automatically loses 10% of its value ($50,000 car is now worth $40,000).

Not only this, but after just its first year out of the factory, it has already lost around 20% of its value, and will continue to fall annually.

On top of this value loss, you also have to pay insurance on the vehicle, which is generally about 10%+ of its value, which ends up costing you more than what the vehicle is worth.

Financial Habits You Need To Get Rich (Part 1)

There are so many things that you can do to create yourself a healthy bank account, but have you ever thought about how you can make yourself rich?

It’s not as easy as it seems, there is always hard work to be done, but if you want it, you’ll work for it.

There will be a few (10 to be exact) topics that we’re going to touch on through this series, hopefully it helps!

Create A Budget And Stick To It.
This may seem simple and relatively straight forward, but how many times have you gone to the supermarket and bought way more than what you originally went for, or you saw a cute dress so you told yourself you needed it, without having a solid reason?

This does so much damage to your savings to say the least.

By creating a budget, you’re allowing yourself to indulge in a few luxuries, but when the time is right… and when the time is right, we mean after the bills are paid, and your grocery shopping is done etc.

It’s super important to have a reasoning behind each of your purchases, whether it be as big as a car, or as small as a new pair of undies. You must ask yourself every time ‘why am I buying this?’ and give yourself a logical answer, not just ‘because I deserve it’ or ‘because there’s a sale on’.

Upon giving that answer determines how badly you need the item, which should either increase or reduce the want for the item.

Build an Emergency Fund.
And don’t touch it unless it really is an emergency!

By doing this, you’re preparing yourself for the unknown… some examples are along the lines of having to book an emergency flight or trip home, paying for an accident, or you know, unexpectedly losing your job.

An emergency fund isn’t for the small things like groceries or an outfit for a wedding you’ve known about for 12 months, it’s there for when times get really tough.

The best way to go about this is to set up an account and have a designated amount (maybe $50) automatically transferred into that account every fortnight.
After a while you may find that you forget about the account all together!

Increase your income
How you ask?

Well, it may be as simple as getting another little side job, whether that be bartending or Uber driving after hours, or you could venture out into the cyber world and create some online hustles that may not require as much work.

Things like that include starting a blog or a vlog, writing an eBook and selling it, peer-to-peer learning (writing a course to sell etc.) and the list goes on, there are a whole range of ways to make more money on our site such as the Making More Money Part Series, and the Passive Income Part Series.

Your Kids and Their Habits

Teaching your kids the right habits is the key to their greatness. But there are so many aspects of parenting that you have to think about right? Their health, manners, personal skills, their strength and resilience, all that sort of stuff… but have you ever thought about what you let them play and how that’s forming them? That’s what we’re going to be focusing on…

At a glance, what are your children’s top-played, most favorite games on their/your tablet or smartphone, and are they beneficial to their long-term learning? There are so many games out there, both hard (board games) and soft formats (apps and other electronically supported forms) that you can obtain for your kids to play to increase their awareness of business, stocks, money, spending, and creation. They’re specifically created to be fun, engaging and interactive so that the children are in an environment where they’re challenged to contemplate what they will do with their money and how it will affect them further on into the game.
Associative games such as Monopoly, Catan, Ca$hflow and Million Dollar Challenge are just some board games that relate to a real-world sense (check them out here:
http://www.businesspundit.com/10-best- business-board- games/). If you encourage these forms of games and make them enjoyable to play, they will teach your kids how to be more money-wise and to really think about how they’re going to spend their hard-earned cash.

 

Alternately, stationary games such as those played on the PlayStation or Xbox like Call of Duty or Grand Theft Auto really just teach kids how to be violent and steal for a fun instead of being persuasive and influential. These sorts of games are not something that excels a child in any aspects, they aren’t created to help your children to get further in life or to for higher education where these business-like topics will become more prevalent.

Alternatively, there are multiples of apps that can be downloaded that focus on working to serve customers in an eatery to make money, or planting crops to create living off a farm that are also a great way to introduce your little ones to the real world, they have to think about how they’re going to make money, and if they get it wrong they don’t get paid, and can’t continue on until they’re fit and able to create the masterpiece that the game has asked for. It’s not all about a virtual world, however, make sure to take that world away from them for a period of time, turn the news on through dinner and see whether they take notice or ask questions.

Exposure to the world is important to kids, they need to know what they’re faced up against, how they can create a better place and change the world, one step at a time…
And remember, they need to be the ones to save us when we’re too old to run fast enough to escape!

How Compound Interest works.

How does compound interest work? Business and compound interest go hand in hand, but which interest is better?

There are two different forms of interest that you can have through the banks: Simple Interest, and Compound Interest.

How it works

The difference between the two are small but are most certainly different. Generally, compound interest is often used in business transactions, investments and financial products intended to extend for multiple periods of years. Simple interest is mainly used for easy calculations: those generally for a single period or less than a year, though they also apply to open-ended situations such as credit card balances. (Investopedia, 2018)
In short, Compound Interest is the interest that the original investment (money put into the bank) earns, PLUS all of the interest earned on top of the interest that has already accumulated over time. The best way to describe Compound Interest is ‘Interest on Interest’. An easy way of looking at the difference between Simple and Compound

Interest can be seen below:
Simple Interest: the interest earned on the original investment only
Eg: $100 with 5% interest ($5 interest)
Year 1: 5% x $100 = $5
Year 2: 5% x $100 = $5
Year 3: 5% x $100 = $5
This equals $15 interest over 3 years

Whereas Compound Interest: the interest earned on the original investment plus all interests earned
previously
Eg: $100 with 5% interest compounded annually
Year 1: 5% x $100 = $5
Year 2: 5% x $105 = $5.25
Year 3: 5% x $110.25 = $5.5125
This equals $15.7625 interest over 3 years.
Why is compound interest better than simple interest?
This is simply because it earns you more money, and adds up to more profit in the long run.
If you’d like more information, send us an email and we’re more than happy to help you out.
answer any questions you may have about Compound Interest.

 

How Students Save Money

Most of us have been to school, we all understand that being a student it can be hard to save money. Follow this post to understand how students can save more money.

Putting away $2 a day can create so many pathways throughout your future…
Worried about your retirement? Start putting $2 away every day.
Worried about a mortgage? Start putting $2 away every day.
Want to be able to take you and your partner, or your family away on a nice holiday? Want to buy a new laptop? Just want to save your pocket money? Put $2 away every.single.day.

It may surprise you how much difference a small gold coin can make to your future. There are so many success stories that come through the news, while you’re scrolling Facebook, checking your Instagram newsfeed, and yes, they all had their own way of creating their fortune, whether it be a following that turned into a global movement, a single act that turned to something much, much bigger than even they anticipated, or they just pursued their dream as hard as they could. Every single one of us can be one of those success stories, you just have to find yourself, and what you want to do.
For most, money is what we want, right? Well, here’s a way that you can have money, whether you’re a scrooge or a big-time spender, there’s always something that you can put away to make your future that little bit more secure.
Look at it this way: if you start putting away $2 a day when you’re 20, that will equate to $14 a week, $28 a fortnight, $70 a month, $840 a year, and $4,200 over 5 years… That’s a nifty little sum to be sitting on by the time you’re 25, just for putting $2 into a jar every day.
How do I make myself put away money?
One of the hardest things about saving money is getting started. There are so many questions, if’sand but’s around how you can afford to save money in this day and age, but there are also some simple answers…
Buy un-openable money tins:
These are absolutely brilliant, especially the huge ones! You can’t have any weak moments, and more importantly, you won’t have any grimy little fingers sneaking cash! Scatter them over the house. One in the bedroom, the kitchen, the living room, the laundry (that’s where most of the
change ends up, right?!), don’t forget the car either!
Make it a family thing:
Additionally to the ones scattered over the house, buy a tin for each family member, write their name on it, colour code it, whatever works for you and put them in a central spot so you can monitor them. Express the importance of saving from a young age, and implement chores at home so that they have an incentive to work towards – they know they’ll get paid – but make sure they put part of it away.
Specifically give their pocket money to your kids in coins if you can, so that they have to decide what they’re going to do with it. It will surprise you how they think, and budget in their heads without even knowing it, and they might shock you when they’re a millionaire by the time they’re 35… All thanks to you!
Don’t have $2 on you?
Surely you have some form of cash on you, $0.50, $1.40, $5 note, $10 note? Whatever you have, put it into the tin. It’s better to put something in there than nothing. It’s all about that habit that you have to get yourself into for it to become a daily thing. It’s important to put something in that tin. Over time it will all even out, if you put 50 cents in there one day, maybe you’ll have $2.50 on you the next day and $1.50 the next, chuck it in and you’ve got yourself $5.50 in three days. It’s all about
routine and persistence. You’ll thank yourself later.

From putting away $2 away a day can also be drastically increased by compound interest. Don’t
know what that is? Check out the link below to read all about it

Get educated on topics like, finance, passive-income  and business  at Investercom.com