Since money is the single most powerful tool we have for navigating this complex world we’ve created, understanding it is critical.“But Dad,” she once said, “I know money is important. I just don’t want to spend my life thinking about it.” This was eye-opening. I love this stuff. But most people have better things to do with their precious time. Bridges to build, diseases to cure, treaties to negotiate, mountains to climb, technologies to create, children to teach, businesses to run.
Unfortunately, benign neglect of things financial leaves you open to the charlatans of the financial world. The people who make investing endlessly complex, because if it can be made complex it becomes more profitable for them, more expensive for us, and we are forced into their waiting arms.Here’s an important truth: Complex investments exist only to profit those who create and sell them. Not only are they more costly to the investor, they are less effective.
The average income earners dream of a better life for themselves. A life with lesser work hours and enough money to enjoy life. However, often, they need to gain the skill or know-how to accomplish this dream of wealth creation. Most individuals either hope for one big promotion or a big break to catapult them to their dream financial status. Nevertheless, the reality is that to create wealth; one must look outside their salary. No salary earners ever became a millionaire on their salary alone, meaning they must think outside the box.
Moreover, one must ensure they are free of debt by all means. Debt is the biggest hindrance to creating and sustaining wealth. There is no such thing as "good debt"; this is a myth created by marketers to make quick bucks on commission. It is always better to pay off the debt ahead of schedule and to rid oneself of debt; one must avoid it because saving is impossible when they have to worry about debt. Saving isn't restricted to taking money from the job and putting it away. Of course, one can do this, but there is a much more sustainable option - investing.
"Stop thinking about what your money can buy. Start thinking about what money can earn. And then think about what the money it earns can make.- J.L. Collins"
Like other investment instruments, the stock market cannot assure perpetual gains all the time one invests. There is as much certainty that it will crash as it will bounce back. The trick is knowing how to navigate the rocky terrain. People lose money in the stock market for various reasons other than wrong timing, such as:
There is a surefire way to get the best from the market - well, the possible best because no one can beat the market. There is another side of the coin, bond markets; bonds are less volatile and risky compared to stocks. The returns might not be suitable as stocks, but bonds are traded the same as stocks, with an interest rate that helps regulate the market's worth. Interest rates on bank cash deposits will never beat inflation; putting money in moderate and high-risk investments is the only way to beat inflation over the long term, but with a relevant strategy. Many also invest through retirement funds that assure a safe, comfortable, and wealthy retirement. If you are lucky, the firm you work for will already have a retirement plan for you, so you don't have to worry about the market.
Once you've started investing, saving, and doing less work, you might ask the following question: "Do I have to wait for retirement?" "When can I use this money, and how much can I use at a time?". Based on a study, the answer is 4%; one can withdraw within 4% of their savings/investments in stocks and should be in the safe zone 8.5/10 times. However, we must remember that it takes more effort to invest in gathering wealth than it does to preserve it. To make wealth, we must lay down sustainable and innovative financial plans that will generate considerable profits in the long run. But that is not all; making wealth is not the only step to saying wealthy. You also have to avoid debts by all means. To build wealth, you must make intelligent financial decisions.
“In the dark, bewildering, trap-infested jungle of misinformation and opaque riddles that is the world of investment, JL Collins is the fatherly wizard on the side of the path, offering a simple map, warm words of encouragement and the tools to forge your way through with confidence. You'll never find a wiser advisor with a bigger heart.” -- Malachi Rempen: Filmmaker, cartoonist, author and self-described ruffian.
