Wednesday, July 22, 2015

10 IMPORTANT THINGS I LEARNED IN ATTAINING FINANCIAL KNOWLEDGE

This year marks my decision to be financially literate.

It all started when I had attended a seminar held here in Hong Kong called, "Rich Dad Poor Dad". Like any other free meet-ups made available in most countries wherein finance is the name of the game, it was the usual 2 hour motivational lecture by this woman who had been into the deepest, darkest hole as a result of her bad decision making, lax prioritization and irresponsible lifestyle. Needless to say, it leaves her penniless, hopeless and desperate until she mentions attending the very same thing we (the audience) are attending. Her story touches all the necessary buttons to set us all into an awakening. To sum it all up, the story telling part resonates to most of the middle class (which to my estimate composes 65% of the attendees): continuously in a situation of being overworked and underpaid. Dramatic as it may sound, it set us off to a mode of action in just an hour.

With an expert knowledge about these people who go to seminars, the staff knows that one way or another, this 65% is in need of enlightenment from their own current financial situation. While the rest were dragged to attend because of their curiosity, including me, its motive was quite established with a pang.

Through the rest of the seminar, the lady introduced methods that she followed on how to get out of the draining misfortune. The one I attended focused on real estate. It encouraged all the way to invest the money they are saving. The clue was to look at the rate of return on investment as to which tool you'll embrace and work on.

May I say that in the end there was selling of the "help" that you should need but it was enveloped as a form of investment on education. As a writer, I continuously research. Included in reading books and studying statistics, I consider reviews, comments and forums concerning a specific topic that I need to know about before I write my own input. Because of that, I know there are a lot of free information in the Internet that I can hold of. This convinced me that right before I entered the room, I was just after the satisfaction I would get and the refresher on the methods I stubbornly keep up with. I just wanted to be aware further more. So, I have set myself to hold my credit card very well and to let the information settle before I make a move... or a swipe.

I was successful in not doing so.

But I came out from that free seminar, rich in resources. Books, links, inspiration. And the one that I benefited from the most were the books, "The Rich Man in Babylon" and "Think and Grow Rich".

Now reading these books had kind of made me learn 10 very important things:

  • Set a S.M.A.R.T. goal. I know some may have come across this abbreviation a thousand times but just for the sake of reiteration, let me give you what this effective acronym stands for: 

              S - specific; M - measurable; A - attainable; R - realistic; T - time-bound
       
         These meanings are pretty self-explanatory. But there's one thing you need to do after coming up with one, you write it down and recite it as often as you can, stating it as if it happened already, claiming it and considering it as done. Mine was to have Php50,000 within a year, even declared it in front of my husband (despite the book's advice to just make a commitment with yourself) just to give myself a sense of stronger responsibility to live up to my word. He challenged me why not 50,000 Hong Kong Dollars? And so, I added it up.

  • Never lay all your eggs in one basket when it comes to investments. - There are different investment tools and the more you are well versed on them, the more you'd be able to calculate the risks that come along with each.
  • Understanding the concept of the 8th wonder of the world called "compounding interest", you may think that time is not your ally anymore. But think about the present learning as a gift and consider "now" as the best time. Countless years may have been wasted before but there's no other best time to start than today.
  • Learn from those who had gone the path already. Easily put, if you want to be rich, learn from the rich, the experienced. There are a series of steps that are usually presented in books but the most important is, if it's feasible and if it is actually doable. The only way to find out is if there's somebody who had tested and did it themselves. Follow that person.
  • Keep the three laws of money (save, invest and re-invest) intact in every financial decision you will have to make. Saving may be in a way of assets, bit coins, saving plans and is not limited to just keeping an amount of money safe in a bank.
  • Emergency fund is necessary as your safety net as you level up into investing. Establish this first before anything else so that come what may, you will have a fall back.
  • Never ever neglect paying yourself first. This is not through material stuff like buying yourself a new gadget, clothes or shoes come every payday. It is putting aside money for your retirement in the future. Paying yourself first is paying yourself for every non-working day you need to live for after retirement, keeping the same lifestyle like when you still had a job.
  • Habit forming will be your weapon in keeping up with your financial goals. 
  • In every investment you have to make, see to it that you separate your emotions from the very beginning. Because if you do, you're already 50% short on your ROI.
  • Anything that you do, integrity is the key. If you want to come up with a business, word of mouth will always pave the way to your success. If you're hard to work with and trust unworthy, chances are, people will talk negatively of you. Whether you're a boss or an employee, treating your subordinates right and respecting your bosses, having the appropriate work ethics can send you high rocketing into success. From there, you'd be able to give your goal a check, leading you to the road to financial freedom.

Right now, I have been awakened. Having a family had pushed me into planning for my own financial freedom. Let's see if it works.

Related posts:

1. GET INVESTED IN STOCKS FOR A RICHER LIFE - One of the many form of investments I've tried doing. Believe me, I was scared shit less of the term 'stocks' alone. But I had turned the risks into a calculated one, and slowly, it pays off. Read on why you should at least invest on a sturdy one like Facebook, Disney or Jollibee.

2. JOLLIBEE - why it's worth buying its stocks.

3. HOW FINANCIALLY HEALTHY ARE YOU? - Here are 6 steps on how to assess your financial status.


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