Our friends at Rich Dad Advisors have offered some great advice when it comes to making important holistic financial choices. They also offer a link to a free app providing you with easy-to-understand information about personal finance. Here’s their article:
Careless financial mistakes can add up and lead to a large amount of debt, bad credit, overdraft fees, and the list can go on forever. We have all made poor financial decisions in our life at one time or another, but the ones who realize it early and decide to start making smart financial decisions have a better chance at being financially successful. Taking the time to create some great habits could have a major impact on your life in the years to come.
1. Living beyond your means.
We all know that our income should exceed our outflows. However, many of us decide to bite off more than we can chew each and every month. The key is to know how to budget and have self-control. There are a couple basic principles that allow you to easily live below your means, such as making sure your housing cost is 1/3 or less than your take home monthly income. This leaves excess cash flow for bills and investments that will bring you dividends in the future. Second, don’t spend frivolously on items that have no return. Every major purchase this thought should cross your mind “what is my ROI (return on investment) on this.” Changing your mindset and developing solid habits puts you in the path to financial success.
2. Only focusing on one stream of income.
The most successful people have several streams of income coming in, usually it is monthly, sometimes it’s weekly, and if you’re really on top of your game it is daily. Today we live in a very progressive society and there are a lot of ways to make money. By having multiple streams of income you minimize your chances of going broke, and increase your chances of building wealth. Do not just focus on the full-time job and think, ok this is the way I am going to make money. Find what you’re passionate about, and figure out how you can monetize it. Opportunities are endless these days, especially with all the technology out there. And of course, as Robert Kiyosaki always says there is always Real Estate, a great way to generate passive income.
3. Wasting cash on bank fees and credit card interest.
Successful people have a full understanding of their banking! They realize that all the little bank fees a person can accumulate will add up! Be aware of overdraft fees and monthly fees. Know all the auto drafts coming out of your account every month, from smallest to largest, it all adds up. Essentially, know your bank statement like the back of your hand, and be able to recognize every transaction on there. Lastly, do not get caught up with paying interest on your credit card debt. Pay you bill in full and on time every month! Successful people make their money work for them and focus on gaining a return. To learn more simple financial tips check out this new financial app we love called Lite! Lite provides simple financial advice for all ages!
To download and learn more about the free financial app click here!
– Shadrach Vaughn
Contributing Writer | CEO + Co-Founder, Lite App
Our goal at Paradigm Life is to help people find their personal definition of holistic wealth. We want to share a model with you called the Perpetual Wealth System that allows you to grow your wealth, access cash value, and leave a legacy for your family. We are excited to invite you to take 2 minutes to sign up for a FREE, extensive eCourse called Infinite 101®. You’ll receive access to video tutorials, articles, and podcasts. It literally costs you nothing to become educated on this ideal financial strategy and start changing your wealth paradigm!
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Q: What is one key money mistake that successful people avoid?
A: Successful people avoid neglecting personal development and continuously invest in their own education and skill enhancement.
Q: How do successful individuals manage the risk of overleveraging in investments?
A: They practice caution with leverage, understanding the risks of excessive borrowing, and ensuring they don’t overextend financially in their investments.
Q: What approach do successful people take towards diversifying their financial portfolio?
A: They diversify their financial portfolios to mitigate risk, avoiding putting all their financial resources in one type of investment.