My name is Laurențiu Mihai and I want to welcome you in the community of people who wants to know more about money. I am writing about financial educations since 2012 and I am doing this with passion and devotion.
Taking a holiday in a foreign land works well on multiple levels.
Travelers get to experience new sights, sounds and smell in just about every place they visit, and they also tend to return rejuvenated.
By planning your finances ahead of time, you minimize the probability of getting nasty surprises, and you also get to make the most of your money.
Create a Budget
Unless you have an abundance of money, making a budget, especially when going on an overseas holiday, is the best place to start.
Account for the major expenses that include airfare, accommodation, and local transportation. You also need to factor in how much you might spend on eating out, partying, and shopping.
Inform Your Banks
Before you leave, inform the issuing banks of the debit and credit cards you plan to take with you about your travel plans.
It is not uncommon for banks to temporarily block cards when used overseas because they view them as suspicious transactions. Informing them in advance ensures that you have access to your cards as and when you need them.
Read Travel Advisories
Governments of countries such as the U.S., Canada, and the UK issue travel advisories for people traveling overseas.
These advisories provide any applicable information regarding currency restrictions. They also provide up-to-date information about safety and security.
Keep Enough Cash
While most countries the world over are going toward being cashless societies, only a few are anywhere close to being completely cash-free.
Make sure you have enough cash to carry out everyday transactions. In some countries in South America, Africa, Asia, and Eastern Europe, you might also need cash to pay for accommodation, local transportation, and eating out.
Make Payments in Advance
If possible, make some of the larger payments in advance, before you depart. These could be toward your accommodation or local car hire.
This way, you may pay using an overseas money transfer carried out through a specialist company such as TransferWise, OFX, or WorldFirst, and benefit by getting highly competitive exchange rates while paying little to no fees.
Use Cards Carefully
You might be tempted to use your debit or credit card on multiple occasions. However, determine just how much you will end up paying as fees ahead of time.
For instance, using a debit card to withdraw money from an overseas ATM might require that you pay a fee to the ATM operator.
Using your credit card to withdraw money from an ATM is not advised, given the cash advance fee and the fact that you pay interest from the word go.
When you use your Visa- or Mastercard-branded debit or credit card to make payments, you benefit through the exchange rates that these companies provide. If you are asked whether you wish to pay in the local currency or your home currency, always select the latter.
Receive Money Using a Specialist
When overseas, if you need to receive money in a hurry, consider using the services of specialist money transfer companies that have agent locations. Some of your options include WorldRemit, Ria, Western Union, and MoneyGram.
When going on an international holiday, it does not take much to plan your finances in advance. What it does do is provide peace of mind, and you may also end up saving some money in the process.
Jon works as a researcher with iCompareFX. This website gives its users an easy way to compare some of the world’s top overseas money transfer companies. When he’s not working, Jon likes listening to music from across genres.
For a long time I wanted to write this article and I hardly refrained myself from doing it. I hear daily too many stories about money from friends / acquaintances even if I do not agree with them.
I am part of the young people’s category and I am very glad. I want to enjoy this age as much as I can, but I will never neglect the financial part, because regardless if I want it or not, it will always influence my life.
Many decisions we make now will influence us when we will be 40-50 years old, this is why it is good to care about our money and to try to control them.
If you are young, read carefully the rows below. If you have passed the young age, read the article and forward it. Help those around you manage their money better.
Let’s start the list…
10 financial education mistakes young people do
They have reached a pretty good wage and started to accumulate debts.
Yes, those with small wages seem more prudent and take a better care of their own money. They are those who will get by with less money and will not make many mistakes with the money because they do not have many.
The problem occurs in case of those who started to win more: 2-3-4 thousand lei per month and their worries regarding the financial status are already gone. They start buying apartments for 30 years because yes of course they will get by, they start to buy good cars, latest generation phones, designer clothing and so on because they “can afford it”.
They are the type of person who, if they earn 2000 lei per month, they will spend 2000 lei the next month. They are not thinking at all about the future and not even a second about the fact that all the loans they took are supported by a job which can disappear quite easy.
Financial planning (personal budget) is a funny notion.
Let’s not talk about budgets because we are already entering into some complicated things. Budget = a mathematical things which will take up my entire time, plus I am too lazy to fill it in all the time.
Exactly, here is where we go into issues like: we are spending too much in the city, we are eating too much out, we accumulate debts, we buy everything cool and we do not care about tomorrow.
We are always sure that tomorrow will be a better day. (Many times this is not true) – Emergency fund = 0 lei.
When we are young we know (100%) that everything will be always ok. We have a good immune system, we think we are full of energy and we do what we want.
But many times, it happens that very difficult experiences hit us, which can be solved with money: someone in our family has a problem, our car breaks down, you have a problem and you need doctors and many others and here comes your capacity to get money.
Of course, the emergency fund is something taboo for young people and it is not taken into consideration at all. We are never thinking about less pleasant events because life is pink.
Unfortunately, life is not always pink and an emergency fund could be an extremely good solution for unpleasant events in your life.
We support ourselves from a single income source.
Wage/parents (as the case may be) = single income source. Most are living in a bubble where everyone is happy with his/her income and does nothing besides job to live better.
In the happiest case, we change our job for a better wage or for an easier working environment, but we are not thinking at all at other possibilities.
Passive income is only for the big ones and cannot be accessed by all.
If the income source falls, God help us go over it easier, but we are not doing anything beforehand.
Over 30 years = a beautiful house.
House = the only investment we have learnt from our parents. I have nothing against this type of investment, I do have something against those who barely have a wage of 1500-2000 lei net and they already took a 30 years loan because “I NEED AN APARTMENT”.
No, you do not need it, but the education you received taught you that. We must have our apartment, ours. Just so you know, if you buy it on a loan basis, it will not be yours until you return the entire loan.
Recommendation: If you are buying an apartment/a house, try to pay it in 7-10 years. Save as much money as you can since the beginning, pay a higher advance, try to earn more, pay your instalments early.
Economic crises are cyclic, you can never know when they strike and LOAN + REAL ESTATE = KNOCKOUT!
“Financial education books are for single women…” – a comment to one of my posts from a young man.
Firstly, I was shocked when I heard this. He is already born with a financial education, but I do not know where this idea came from, that single women are those who are in need of financial education and these books are meant only for them.
Secondly, I believe that this type of books (more professional) can help us most in life.
Yes, we will find out information that fits only for America, but the idea is to transpose everything in our Romanian environment. Financial education books can be a start for your friendship with money.
You will find in there concepts (maybe many of them theoretical), but it all depends on you if you implement them or not.
Unfortunately, young people do not read financial education books because it is not COOL. They are boring and they do not want to fill their minds with “stupid stuff”.
But these young people will reach and age of 35-40 years old or more and they will say “I WAS SUCH A FOOL FOR NOT TAKING MORE CARE ABOUT MY MONEY, MAYBE NOW I WOULD HAVE HAD MORE”.
Investments on the stock market are not for me. It is too much to learn.
Unfortunately, investments on the stock market are still branded as being very complicated and only the smart people can access them.
Yet this is not true at all. Anyone can really invest if one has A LITTLE TIME and is INTERESTED to learn.
Yes, you cannot invest if you know nothing. But everything in this world can be learnt. You can learn how to invest your money on the stock market and you can make a passive income source out of it.
Car = the best investment.
I think it is pointless to tell you that a car IS NOT AN INVESTMENT. It is a whim for many young people and many of them want the most expensive one.
Their behaviour is consumption – oriented, instead of being earnings – oriented.
Yes, we are much happier when we buy certain goods than when we earn money. Unfortunately, this is a truth that applies for many people and we can hardly see it.
A wage or any other earnings, when they come, it seems normal, but when we buy a pair of shoes, it is then when we seem happier. Maybe we do not even need them, but we are happier.
What it would be like to change that and be super happy each time when we earn money.
If you talk about money / financial education with your friends, they will laugh at you.
Hmm, I think this is the saddest. To be young, to have not even the slightest idea on how to manage your money, but to laugh at those around you who started to learn more about investments, to read books from this area or to create an emergency fund.
I would advise these young people, who are always laughing at those who want to evolve, never to go to my blog. I want 100 people interested in this area more than 10,000 people who always laugh at this concept and who will cry when they are of old age because they did not learn about it when they were young.
With these being said, I hope you memorized at least some little things among the above mentioned. You can read it again to realize these mistakes once more and you can even send it to your friends.
Many times, the change comes once the environment changes. Be yourself the one who teaches those around you.
Following a discussion at the radio from the other days I have started to think very much about what exactly this notion of “money” means for many people in this country.
I have seen many messages from many Romanians that were not very encouraging and I am sorry to hear these things.
I would like to talk a little about the 3 topics mentioned in the title and see if money is so bad.
Money has an extremely important role in our lives, even though many do not want to believe this aspect. We are happy when we earn money, but we are also very sad when we lose them. When someone asks us if money is important, many say no.
Before you say Yes or No, it is important to understand better what their role in our lives is and how important they are.
We want more money, we have this object, but we never asked ourselves the question why this money is important for us.
We can see quite often in our lives one of the most wrong mindsets in relation with the importance of money. There are people who always say that “Money is not important” or “money is everything for us” and so on.
I understand when you say that money is not important, but there are many people around us for whom it matters if we have or do not have money: if you want to take a loan, for retirement, for health, for family and so on.
We must understand that in the society we live in money is very important for a peaceful life.
My opinion is that health or family are more important, but money is needed for both. Family, education and health must come first among your priorities, but money help you keep them.
So, the argument that they are important is not absurd.
If we have reached the conclusion that they are very important for us, why don’t we give them a bigger attention?
Why don’t we learn to organise them properly and to know how can we make more money?
Why don’t we have a program to keep a record of them like we have the program to go to work or to go out?
Why don’t we learn to save and invest like we learn to play or like we learn a craft in order to go to work?
Why don’t we stop overspending like many of us are stopping when we eat too much?
These are questions we all must ask ourselves.
The problem is in the mindset, because many have embraces the NO and all they do is saying “I cannot spend too much”, “how much money do you have to tell me what to do?”, “I cannot earn more money”, “I have 3 children and I cannot come through” and so on.
After we learn how to pass over this mindset barrier, we will really start to know how to manage our money.
Money should be our servants. You can even call them friends, but I think it is best for them to be servants and to do whatever you want.
The important thing is for you not to end up in a situation where you care more about your money than you do about people. Unfortunately, this “disease” is often met in the poor people desperately trying to make more money and they end up “falling in love” with them.
You should never forget that money is your servant and you must control them to do exactly what you want. If you do not control them, they will end up controlling you without you even realising that.
Another “disease” we all have is that we will never see in a good light what people with money are doing. Unfortunately, this is also the fault of the political environment in our country and the way corruption has governed this country for so many years.
We always believe that those people stole or maybe they were lucky. I don’t want to talk about those who are stealing.
I want to deal with those who believe that having money is related to luck. “Marcel is rich because he was lucky his entire life”, yet he never won the lotto or gambled.
He simply knew how to organise himself so that he ends up rich/wealthy.
Having money is not about luck. It is about a lot of work, about mindsets, about the way in which you see life and how you answer to everything happening around you.
There are no shortcuts on your road to a prosperous life, nor luck. You make your luck by lots of work and effort.
After you end up having money, you must understand that they always need to flow. By flowing I don’t necessarily mean that when you have them, they must be spend up to the last penny.
By flowing I mean their distribution and the fact that you always have to figure out how can you multiply them in order to win more money.
We must invest more money in order to make more money and this is not possible if you keep your money in a savings account or if you take no risks.
In this endeavour the risk is unavoidable, but everything is about how much you risk and how much you want to win.
You don’t even need to get to the opposite side of this concept and be risk dependent to make these investments as a play.
The idea is that money must flow to make more money. It all depends on you now if you end up buying ASSETS or if you will buy liabilities that don’t bring you more money.
Learn from those who became rich. Watch them with different eyes and try to take only the best from them. You can set role models and, if you have initiative, you can contact then and ask how they are doing it. They will definitely help them.
Their financial flow is briefly shown in this article, but it is best to learn from their words.
All that is left for you to do is to believe harder in your strengths, to believe that money is not a bad thing and that we need them, to control them in your favour and to find out how can you multiply them.
All these are only up to you and to the change you accept or not in your life.
I hope that I have shown you some important things in this article and that I was of help.
It all depends on us to make our life more peaceful.
In the last 2 years I started writing multiple articles about investments and how to save smart for old age and, at the same time, I started receiving messages/questions on what are the best investments we can make.
I don’t always come back with concrete answers each time, because there is no quick and concrete answer for each. It is hard to make recommendations, after 1-2 e-mails, to say that you should invest in the stock market or in a mutual fund or in insurances, on the investments part.
Even with all these articles you read on different blogs about investments, you don’t need to perceive them as a quick, safe investment. You must read the information on blogs, transpose them for your knowledge and you must start reading about them.
Lately I have been thinking about the following:
Why wealthy people have ended up controlling money?
Why are they successful people?
How did they end up having successful businesses?
How did they end up earning the X amount of money?
How did they end up investing the Y amount of money?
And many other questions about how and what a rich man is doing.
One of the biggest investments they made and are still making is the one in their OWN EDUCATION.
THE BEST INVESTMENT IS IN THE OWN EDUCATION!
The answers I get from some of the people I talk to about this topic, when I tell them about savings, investments, personal budget, are the following:
“how much do you earn if you can afford that?”
“you can’t do anything with the minimum wage”
“we don’t have enough money to live”
“it is hard”
“at the end of the month I have no savings to invest”
“it is hard to invest and it is only for the rich ones”
I don’t think there was an answer to the question in the title which you would not have expected, but you must understand that this is the answer.
When you say investment, it must not be necessarily financial.
And investment can be time related.
In education, time is the most important resource you can invest. You must give yourself time in order to end up controlling your money.
No matter how much you want to learn to invest, until you are ready from the personal finances point of view, it is hard to make this step.
An investment in financial instrument needs quite a high level of understanding and management of the financial resources.
Financial education means:
STEP 1: PERSONAL FINANCES MANAGEMENT
STEP 2: SAVING
STEP 3: INVESTMENTS
It is quite hard to reach step 3 directly, skipping the first 2 steps. Most of the times, those who reach step 3 quickly are risking losing their money and don’t have a good control over them.
To reach step 3 easy, the step involving investments, you must go through the first 2 steps.
The first 2 steps consist in: management of the personal budget, budget preview, budget achievement, management of the decisions on personal money, strategies for saving and many others.
All these CAN BE LEARNT.
Even the biggest billionaires say that the investment in education must be the biggest of them all.
You must direct somehow your time and money on this path and you must always try to learn new things.
Investment in education means:
Reading all kind of personal finances articles (on all possible blogs),
Taking part in workshops / courses (paid or not) – not only for financial education, but also in those related to your specialty. Learn to be the best in what you do and maybe you will earn better at your job.
Having a mentor in Financial education or even in your specialty (paid or not),
Taking part to all kind of online programmes/webinars,
Buying books and reading them – here you can find an extremely large list of extremely useful reviews.
Meditating on all information you read.
Discussing about these information with your close ones.
You will never get to really understand investments if the personal management of money is not all that it should be.
And don’t forget!
AFTER YOU LEARN, YOU MUST IMPLEMENT EVERYTHING YOU HAVE LEARNT!
Even when we read books or take part in tens of courses, if we don’t implement what we learn, results are zero.
Education profitability appears when we implement what we learn.
I advise you to invest more in your education starting tomorrow. To read more books and to attend more courses.
Try to learn economy and to understand what can happen with your financial life following some fiscal/political decisions.
Try to overcome the “it cannot be done” mindset and try to earn more money.
I prepared for you 50 inspirational live quotes for you.
I hope this quotes help you to have a better life and a pretty smile on your face.
A journey of a thousand miles begins with a single step. – Lao Tzu
There is no greater gift you can give or receive than to honor your calling. It’s why you were born. And how you become most truly alive. ―Oprah Winfrey
The reason people find it so hard to be happy is that they always see the past better than it was, the present worse than it is, and the future less resolved than it will be. – Marcel Pagnol
If you organize your life around your passion, you can turn your passion into your story and then turn your story into something bigger – something that matters. ―Blake Mycoskie
My life is my message. – Mahatma Gandhi
Don’t gain the world and lose your soul, wisdom is better than silver or gold. – Bob Marley
It’s better to be a lion for a day than a sheep all your life. – Elizabeth Kenny
Go confidently in the direction of your dreams! Live the life you’ve imagined. – Henry David Thoreau
You only live once, but if you do it right, once is enough. – Mae West
The greatest pleasure of life is love. – Euripides
The one thing that you have that nobody else has is you. Your voice, your mind, your story, your vision. So write and draw and build and play and dance and live as only you can. – Neil Gaiman
Change your thoughts and you change your world. – Norman Vincent Peale
I am thankful to all who said no to me. It is because of them that I’m doing it myself. – Albert Einstein
Keep looking up… that’s the secret of life. – Snoopy
Because of your smile, you make life more beautiful. – Thich Nhat Hanh
You’re only here for a short visit. Don’t hurry, don’t worry. And be sure to smell the flowers along the way. – Walter Hagen
It always seems impossible until it’s done. – Nelson Mandela
The first step is you have to say that you can. – Will Smith
Rise above the storm and you will find the sunshine. – Mario Fernandez
The first half of life is devoted to forming a healthy ego, the second half is going inward and letting go of it. – Carl Jung
There are two great days in a person’s life – the day we are born and the day we discover why. – William Barclay
The day you stop racing, is the day you win the race. – Bob Marley
When it hurts – observe. Life is trying to teach you something. – Anita Krizzan
Keep your face always toward the sunshine, and shadows will fall behind you. – Walt Whitman
Once we believe in ourselves, we can risk curiosity, wonder, spontaneous delight, or any experience that reveals the human spirit. – E. E. Cummings
The power of imagination makes us infinite. – John Muir
Follow your bliss and the universe will open doors where there were only walls. – Joseph Campbell
In the end, it’s not the years in your life that count. It’s the life in your years. – Abraham Lincoln
Life is a succession of lessons which must be lived to be understood. – Ralph Waldo Emerson
You can’t be brave if you’ve only had wonderful things happen to you. – Mary Tyler Moore
Life is the art of drawing without an eraser. – John Gardner
Everyone in life is gonna hurt you, you just have to figure out which people are worth the pain. – Erica Baican
Find a group of people who challenge and inspire you; spend a lot of time with them, and it will change your life. – Amy Poehler
Don’t judge each day by the harvest you reap but by the seeds that you plant. – Robert Louis Stevenson
Every moment is a fresh beginning. – T.S. Eliot
Everything you’ve ever wanted is on the other side of fear. – George Addair
Put your heart, mind, and soul into even your smallest acts. This is the secret of success. – Swami Sivananda
When I hear somebody sigh, ‘Life is hard,’ I am always tempted to ask, „Compared to what?” – Sydney Harris
The great thing in this world is not so much where you stand, as in what direction you are moving. – Oliver Wendell Holmes
Life has two rules: 1. Never quit , 2. Always remember rule 1. – Unknown
Many of life’s failures are experienced by people who did not realize how close they were to success when they gave up. – Thomas Edison
Our lives begin to end the day we become silent about things that matter. – Martin Luther King Jr.
I have seen people climbing up and down the ladder of success, and I learnt a lot from them. – Nawazuddin Siddiqui
You will always have ups and downs in your life and your career, but just stay positive and go for it. – Angelique Kerber
Transformation is a process, and as life happens there are tons of ups and downs. It’s a journey of discovery – there are moments on mountaintops and moments in deep valleys of despair. – Rick Warren
Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. – Steve Jobs
Death is not the greatest loss in life. The greatest loss is what dies inside us while we live. – Norman Cousins
Life is like riding a bicycle. To keep your balance, you must keep moving. – Albert Einstein
Remember your dreams and fight for them. You must know what you want from life. There is just one thing that makes your dream become impossible: the fear of failure. – Paulo Coelho
Learn to enjoy every minute of your life. Be happy now. Don’t wait for something outside of yourself to make you happy in the future. Think how really precious is the time you have to spend, whether it’s at work or with your family. Every minute should be enjoyed and savored. – Earl Nightingale
Witch quote do you like the most? Let me a comment below.
We are living in a country and in a time when we are surrounded only by myths. Everything we see, to the left and to the right, are myths and we believe in them.
When we find out the truths about the financial actions we make daily, we begin to ask ourselves questions. Few people end up finding the truths in their actions.
Usually, these people are those who made many financial mistakes and know what is like ending up in a personal bankruptcy status.
Hereafter, I will show you 25 myths and truths about money, personal finances and financial prosperity.
The 25 myths and truths are collected from the book Total Financial Transformation by Dave Ramsey. The book is considered a Bible for those who have debts and want to get rid of them as soon as possible!
25 myths and truths about your financial life
Myth:Advances in cash, loans with due date on salary day, leasing, title mortgage and consumer credits are necessary in order to help those with low income.
Truth: These examples of deception and incorrect loans are meant to take advantage of persons with low income and to bring benefits only to owners of the companies granting credits.
Myth: If you loan money to friends or family, you are doing a good deed for them.
Truth: If I loan money to a friend or a relative, the relation will be tense or destroyed. The only type of relation that will prosper is master – subject type.
Myth: If you play the Lotto or you gamble, you will get rich.
Truth: Lottery and gambling are a tax for the poor and those who do not know how to calculate.
Myth: Debt is an instrument and should be used to create prosperity.
Truth: Debts imply some considerable risks, most often they do not bring prosperity and rich people do not use them as often as we are lead to believe.
Myth: Refinancing gets you off the interests and you remain with only a single smaller instalment.
Truth: Refinancing is dangerous, because all you do is to treat the symptom.
Myth: I do not have enough time to set up a budget, a retirement plan or an action plan in ral estates.
Truth: You do not have enough time to to nothing.
Myth: “Three months with no interest” means, practically, using other people’s money for free.
Truth: Three months with no interest is not the same as cash.
Myth: Car instalments are a way of life; you will always have an instalment to pay.
Truth: What millionaires are used to do is to drive a second hand car, but in a good running condition; this is how they got to become millionaires.
Myth: Sophisticated persons make purchases in leasing. It is good to buy in leasing goods which value is decreasing, profiting from the taxation advantages.
Truth: Consumer protection, well known experts and a usual calculator will tell you that a car bought in leasing is the most expensive way to use a vehicle.
Myth: You can make a good business if you buy a new, with 0% interest.
Truth: A new car loses 60% of its value in the first four years; this does not mean 0% interest.
Myth: You need a credit card to rent a car, stay in a hotel or make shopping online.
Truth: A debit card is as good for all of these.
Myth: The debit card has more risks than the credit card.
Myth: If no one would use credits, our economy would crash.
Truth: No, it would prosper.
Myth: Everything will be ok when I retire. I know I do not have savings yet, but everything will be ok.
Truth: Things are not going to solve themselves!
Myth: Gold is a good investment and will protect me if the economy crashes.
Truth: Gold has a quite weak history and is not used when the economy crashes.
Myth: Life insurance with a savings fund, the same as the full life insurance, will help me be rich when I retire.
Truth: Life insurances with a savings fund are one of the worst financial products out there.
Myth: I will declare myself bankrupt and start from zero; it looks very easy.
Truth: Bankruptcy is a painful event which changes your life for worse forever.
Myth: I do not use cash because it is dangerous, what if someone robs me.
Truth: You are robbed every day if you do not take advantage of the power cash gives you.
Myth: If I make my will, I will die.
Truth: You will definitely die – so it is better to have a will when it actually happens.
Myth: That Banker and that Legal Executor were nice, they are treating me nicely.
Truth: Bankers and Legal Executors are not your friends.
Myth: I can buy a financial history optimisation set and all mistakes from my past will disappear by miracle.
Truth: Only the incorrect data can be excluded from the financial history; anything else is a hoax.
Myth: The divorce decision says that my wife/husband should have paid the debt, so I will not do it.
Truth: Divorce decisions do not have the power to erase you name from the credit card and from mortgages, so if your wife/husband does not pay, get ready to do it yourself. You continue to be a debtor.
Myth: Raising money for funeral or children college is a good investment and protects me from inflation.
Truth: Funeral services paid in advance and support funds for education offer a low profit and are putting your money in other people pockets.
Myth: Have a 30 years mortgage and swear to yourself that you will pay it as if the deadline is in 15, so that you have room for movement, if something happens.
Truth: Something always happens.
Myth: You cannot buy a house with cash.
Truth: Let’s bet on that!
These are the most important 25 myths and truths which I have taken from the book.
The book is a practical guide of financial education and financial transformation. I recommend everyone to read it and, especially, to turn it into a good plan to implement.
More details on “Total financial transformation” by Dave Ramsey can be found HERE.
In the end, I will leave you with a question and I expect your answer below:
What mistakes have you made in your financial life?
First of all, I would like to blow away a myth which can be found almost anywhere, which sounds like this “If I would have a bigger salary, I would get the financial welfare”, which is not true, once you have a bigger salary, your life standards will grow automatically.
This happened to me, when I was smoking (I am not smoking anymore), I used to smoke cigarettes that cost around 1 euro (in the Republic of Moldova, cigarettes are cheaper) and when I started to earn more money I automatically started to smoke the most expensive cigarettes on the market, that cost more than 2 euro.
It is then when I understood that in order to get the financial welfare, a high salary according to the conditions in Romania, even if it is one – two thousand euro per month, it is absolutely insufficient. The more you get, the higher the needs and expenses become (law of needs increase).
From the financial welfare point of view, it has no importance if you get 300, 500, …, 1000 or 2000 euro per month.
If you spend this entire amount immediately on the current needs, you remain anyway in the same category – in the category of financially dependant people, who are in the area of permanent financial risk.
And if, at a certain moment, you lose your well paid job – such probability is always there, as the old age gets close, it becomes even unavoidable, the more painfully you will bear then the decrease of the income and consumption level you were used to, due to the miserable pensions nowadays.
When the pension system was created, it was estimated that approximately 3 employed persons will financially support a retired person, which actually was happening until few years ago, but for some time now the situation dramatically changed, at this moment the situation being reversed in Romania, one employee financially supports 1.8 retired persons and, as the years go by, this difference tends to grow more and more, so that it is estimated that in 15-20 years, based on the fast aging of population, one employee will carry “on its back” 15 retired persons.
What I said above was confirmed also by a state official from the government, who said a while back that in 15 years the retired persons will receive only 15 % out of the money they should normally get, proving once again that the pensions system is a bankrupt one. And the biggest problem is that people continue to blindly trust that the government will take care of them when they will be of old age.
In order to efficiently manage your money, you only need 20% knowledge, the remaining 80% is only behaviour, this is the reason why only 0.6 % of the people worldwide have financial freedom and money are working for them and 63.3% are in the area of financial chaos, not knowing what they are spending money on and not having a penny saved for the reserve fund.
Wealth is not measured in money, but in time, if you stop working today, how long can you live with the money you have now … 1 month, 3 months, 6 months or a year, this period is your wealth and if 67% of people lose their job, they are unable to cover their expenses even for 2 months.
Therefore, the need, without any other alternative, for each person to permanently invest and reinvest part of the current income can be justified as follows. Each of the persons reading this article will live, in average, up to 80 years old (the average life expectancy in Romania is 72 years).
You started working at 20-25 years old and you will work, in average, approximately 40 years and you will live another 15-20 years at retirement, also trying to work somewhere else. So, you have not won anything or almost anything in the first 20-25 years, the pension will be also very modest, delicately speaking, and in the almost 40 full years of work you will have a maximum income for approximately 20-25 years: young specialists have small salaries, close towards retirement illnesses begin to appear, women are approximately 6 years in maternity leave, unforeseen job discontinuity occurs sometimes, as well as the need to go to less well paid jobs etc.
So, you will have a maximum income for approximately 20-25 years. In order to support yourself and your close ones you need: 55-60 years – yourself, 20-25 years – at least, for your child (considering you will have two children and the second child is dependent on the income of your life partner).
Besides this, it is necessary to help your elderly parents (they have supported you until you were 20-25!) and, usually, to support your wife at least during the periods of giving birth and taking care of the babies, and sometimes to support your close ones when they are in trouble. Therefore, the 20-25 more “fruitful” years should allow you to support yourself and your close ones for approximately 100 years, meaning a “rich” year should allow you to feed 4-5 less fruitful and unfruitful years.
How can you solve this task of vital importance, maybe even the main life task? Work until exhaustion almost until the last day of your life? It is a very sad perspective; then again, will they keep you at your job until old age today, when most advertisements about vacant positions are inviting specialists “up to 35 years old”?
Saving for “rainy days” is an important part of the income during “rich” years, or keeping your money “in a sock” or in a jar? They will be mercilessly “eaten” by inflation: even according to the official data, it represents approximately 5-10 % per year, but it is actually twice as high.
If an investment with profitability of 20% per year multiplies the amount you deposit 1470 times in 40 years, exactly the same a 20% inflation will depreciate your savings kept “in a sock” in a similar proportion, namely also 1470 times (and your money goes down the drain!).
Conclusion: no matter how hard you struggle, there is just no other alternative to solve the above mentioned problem of vital importance, except investing a significant part of your current income from the “fruitful” years, at least no alternative mankind invented yet.
If you enjoyed this article, give it a like and a comment below!
A healthy financial life is the most important thing everyone is looking for these days.
We are going through a hard period to cope with, when all that matters is to survive each day. We can hardly think about investments, prosperity and wealth.
We are thinking about how to survive with what we have or how to increase our comfort, but never about how to make our financial life simpler, so that we can live a financially healthy life.
Simplifying your life from a financial perspective is the first step you need to do in order to reach prosperity.
Hereafter, I will show you 30 advices to follow for a healthy financial life:
30 advices for a healthy financial life
Set financial objectives for yourself. This is of the most important financial actions you should take.
Without financial objectives, we do not know what we are working for. We do not know where we are going and what we want to achieve. Financial objectives are what keeps us and pushes us to want more from life.
Set financial objectives for yourself on long term, 5-7-10 years, and then break them into smaller objectives, with concrete actions for each of them.
Try fulfilling one objective at a time. After you have set the financial objectives, you can start fulfilling them.
Achieve each objective at a time. If you start multiple objectives at once, you will get confused. You will never know which one is important and which is not.
Once you have set the objectives within the first step, it means they are all important.
Achieve them individually in order to achieve the highest result.
Use a personal budget. Personal budget is the financial mirror of your life. Without a personal budget, you cannot keep track of what you have achieved so far, what you did wrong and what you did good.
Always analyse your last month budget. This is a necessary and mandatory activity.
Each month, you have to analyse your budget and see what happened in the previous month.
Where you have spent your money, if you have complied with the budget or where did most of the money come from. These are very important activities which will help you achieve your objectives.
Get rid of credit cards. If you have credit cards, this is the moment to get rid of them.
Why spending money you do not have? It is the worst financial decision someone can make.
There is the risk of failing to pay your debt, plus the debt grows a lot due to the associated fees and interests.
Monitor your expenses daily. With the help of the personal budget, you can monitor your budget every day.
Do you know where your money is going? Which are the highest invoices? Do you need all your shopping you make? Can you abstain yourself from shopping certain products? Do you know where you can make some cost reductions?
These are questions you need to answer each time you analyse your expenses.
Get rid of instalments and credits. Stop buying products in instalments. Try saving money to buy a product, instead of taking a credit for it.
Approach a savings strategy instead of an instalments strategy. It is better to save each month 100 lei and buy the product you want when you have the money, than paying for it in instalments, paying fees, interests and getting the bankers rich.
Constantly analyse your telephone, internet cable TV subscriptions.
Are you watching TV daily? Do you need that number of minutes or messages? Are you using to the maximum your broadband internet connections?
Are there other packages that are more to your advantage?
I am sure that the answer to the last question is YES. Each time we can find better packages, we only have to look for them.
Set up an emergency fund. This is the second measure you have to implement once you got rid o f the current debts.
You never know when an unforeseen situation can occur and you need money.
All I can say is that THERE WILL ALWAYS BE UNFORESEEN SITUATIONS. There is no “unforeseen situations cannot happen to me”.
Why not? Nothing has broken inside your house which needs repairs? Your car did not break? You never got sick?
For all these, there is the emergency fund.
Be careful! Go to the emergency fund only if you had no possibility to foresee the expenses in the budget. These are those moments you cannot be aware of beforehand.
Do not go to the emergency fund if there is a TV sale. Doing that is WRONG.
Have at least 2 passive income sources.
Passive income is the income which you do not have to give time for in order to achieve it. It is obvious that you have to give it some time at first in order to achieve it, but, along the way, that time should bring you money.
If you reach a situation that the passive income supports you each month, it means you are on the right track towards a healthy financial life.
See what you did well and try doing it again. Do you have a personal budget that works properly and that you follow constantly? See what worked. See what actions you took that increased your income and take them again.
Make a lifestyle out of it and your income sources will never stop growing.
Reduce your expenses as much as possible. Never stop reducing your expenses in al possible environments.
A useful article which will help you reduce costs for electricity, natural gas, water and fuel for your house and car.
Rent. Do you need a car only for a certain period of the year? Do you need a new house? Do you want to marry the bank for 30 years?
Then the answer is the verb “Rent”. It is not the right moment to buy houses, nor to bind ourselves an entire lifetime for a credit which, in 10 years, will not worth as much has it is worth now.
Try living with rent and investing. Make your money produce more money. After they make enough money so that your 2 years income covers the cost of a house, you are ready to have your own house.
Until then, think about how to make as much money as possible.
Make a list of all your assets. This list will help you figure out what is the net value of your wealth.
Yu will see immediately what you have spent your money on and how many assets you really needed and which you did not.
Get rid of things you do not need. Once you made the list and analysed the things you own, try to get rid of those you do not really need.
Usually, 30% of the list should be eliminated in this step. If you think you have assets your really do not need, try selling them.
After this, you will definitely adopt the policy “I buy a product only if I really need it, not if I only like to have it”.
Use cash payment. If you go shopping, leave your cards at home. Go with cash on you. Each transaction made with the card needs a fee. Each fee is an expense for which you were too comfortable to bring cash.
Ideas like “If I have cash, I may feel like spending them” or “I do not take cash on me because I might get robbed” should go away. Banks are a bigger thief and, what do you know?, they are totally legal.
Get rid of all kinds of subscriptions to magazines, newspapers or other publications. All information you find in them, you can also find on the internet for free. Subscribe to online publications and read the news daily on the internet.
Learn to negotiate. Yes! You heard me. We all need to know how to negotiate. At the market, at the store or AT BANK.
Bank is a good place where you can negotiate. If you know how a bank works, you can end up a millionaire, as Robert Kiyosaki did.
He used the bank in his favour. He negotiated credits for certain real estate investments, so that they would make money for him.
He did not use the bank to buy his own house, but to buy houses which he rented or sold for larger amounts of money.
Learn to simplify your financial life. Try to do everything you did so far with less resource. Eat less, drive more economically, buy the same things for less money or consume less electricity as you did so far.
Analyse your habits and simplify them!
Read more on how to correctly manage your own finances. Education is the most important. Unfortunately, the Romanian education system does not reach the financial environment and, due to this fact, more and more people have money problems.
All that is left in this respect is self-education. I recommend reading books, follow financial education blogs and always be informed on what is happening with the economy of the country.
Country economy is an important factor which affects our financial lives both directly, as well as indirectly.
Use the car only when you need it. Stop going by car to work, except if the car belongs to the company. Mass transportation is cheaper and more advantageous.
Only one family car. Now the trend is that a family should have at least 2 cars. Why? Get rid of one. Use mass transportation as much as possible. I am convinced that your job is not as far as it looks.
Calculate the fuel consumption for the two cars for a month and this will definitely make you eliminate a car and think about using mass transportation more.
Buy a car with smaller fuel consumption. Why do you need a car which consumes 12-13 l of fuel per 100 km? Buy a car with smaller consumption.
You are saving money that you can use for other purposes, plus, a smaller car is easier to handle.
Buy second hand goods. There are so many electronic and electric household appliances sold second hand.
If you need a car, a fridge or a washing machine, why buy them new?
Unfortunately, any fixed asset (car, computer, fridge) loses 30% of its value the moment you buy it.
Why lose 3000 euro for a 10,000 euro car in just one day?
Better buy more second hand cars for a much smaller cost.
Stop thinking small. Try to think from the perspective of a month for each purchase. When you make a subscription, try analysing it for a whole year.
Take a mobile phone subscription for example. If we have a 30 euro subscription and, for this subscription, the telephone company offers us a last generation Smartphone for a small price, we think we made a good purchase.
This is not true. If we calculate the 30 euro monthly for 2 years we end up with a price of approximately 700 euro. We are not consuming all minutes and the phone is not worth the amount we pay for the subscription.
All offers are made so that the seller has the advantage, but if we make a small calculation we can see that the advantage is on our side if we buy a phone with a subscription of 7-8 euro.
Think of such analysis each time you want to make a subscription, then make a decision.
Make an investment plan. There are so many places where you can invest our money. Many people who have no investment plans think that the money they make are too little for potential investments.
Wrong. Save money. “Tighten the strap” in certain financial areas in your life and direct your money to an investment plan.
Investments are the best because they will bring money in the future. For you, they can be a passive income.
Learn yourself to invest. Investing is quite hard. You must have patience, knowledge and read a lot.
It sounds difficult and sounds too much for you. Why? Who do you think will invest your money better than yourself?
In investments, everyone goes by the saying “No one will take care of your money better than yourself”. The best investments are made when you invest your own money.
If you have too much money, you can use a financial adviser to keep your investments portfolio, but the final decision is yours.
I advise you to start now reading more about investments. A first step you can make is to subscribe to this blog, after that you can start looking for all kinds of ideas and places to invest your money.
This can be a game for you. Investing is like playing a game. You only have to be focused and the decision you make at the beginning have to be made on as many and as concrete information as possible.
Always analyse each advice. I gave you the advices above, but not all of them are working for everyone. For some, only the first ones work, for others only the last ones.
Try to analyse each advice from your life perspective. See how they can be applied in your life.
Give yourself each week or each month the necessary time to analyse your financial life and make decisions for this purpose.
Take your time when it comes to money, because nowadays money is one of the most important factors for our future.
What other advices would you add to this list?
What is your favourite advice and which one do you think is the best advice of this list?
Ever since the beginning of the article I want to say that this will not be a standard article. I will try to talk in this article about getting rich and money from a different perspective.
I am talking about getting rich from a psychological, motivational and educational perspective.
It is an article about the way we treat the desire to get rich an about how important money is for us. Many people say that money does not bring happiness, but in my opinion this is totally wrong and this is strictly my opinion.
I want to start by shutting down the myth according to which “We cannot be all rich, someone has to be poor and work hard.”
First of all, we can all be rich. Why w cannot be all rich? Why are you thinking that you do not want to become rich? You will become rich if you believe you will be rich.
Everything we think and everything we want can be real. If you want to be rich, first of all you have to believe that you want to be rich.
Second of all, why do you think only poor people are working? Rich people work even more, or better said, more efficiently. Rich people work in the right place and at the right time.
Hereafter, I will tell you some ideas about how you can become rich, ideas got from the book “The Science of Getting Rich” by Wallace D. Wattles, which, by the way, I recommend you to read it if you like this article.
It is cheap and the investment you make, if you buy it, can return tenfold.
To be rich does not mean to steal from someone or to be a good negotiator. It does not mean to compete with someone and to try to be better than that someone.
“Wealth is the moment you become a creator, not a competitor.”
Never look around you, saying afterwards that it is impossible to get rich.
Ideas like “There are too many rich people, it is impossible for me to be one of them” must disappear. It is not a positive or a constructive idea.
The road to becoming rich
Hereafter, I will show you some activities you should do on a day to day basis or on which you should meditate occasionally in order to get rich. They are not actual steps, yet ways we are thinking about things and ways in which we act each day.
In order to get rich, you must always look at invisible things, meaning things that have not appeared so far.
We are living in a world where technology is always changing. It always evolves.
There will always be people who will make something that does not exist, something invisible. They will make an invisible thing become visible, they will be successful and they will get rich.
Being rich is not a bad thing. There is a spirit among us that makes us look with evil eyes at rich people. I, for one, admire them.
This quote always inspires me when I hear about the success of a rich person:
“Rich people admire other rich, successful people. Poor people do not like rich, successful people.” T.Harv Eker
Being rich is an extra power to help the world. With the help of money, you can change the world and you can help it evolve.
Desire is the most important thing leading you to getting rich. The more you want, the more you thing in that direction, the more your forces, as well as nature’s forces, will act to implement your desire.
If you want and think small, small you are going to get. But if you want and think really big, you will act in that direction and you will get there.
A very good quote of T.Harv Eker about rich people and poor people is the following: “Rich people think big. Poor people think small.”
Always think of something big. Desire will help you fulfil your dream.
I am not referring here to prayers.
I am referring to the acknowledgement we have towards our peers, be grateful to those around us.
By acknowledgement I am also referring to divinity. Your acknowledgement towards divinity and towards yourself for doing what you are doing.
Acknowledgement is good for your vision, for your desire of getting rich. Is helps if you are stronger and if you believe harder in your purpose of being rich.
Thinking leads to the impact of the will. If you think about poverty, about the days with no money from the past, about the way poor people live, you will end up thinking like poor people.
If you are thinking that you will have money in the future and you will buy x, y, z, you will end up thinking like a millionaire.
Wealth depends on will. Will depends on the way you are thinking about it.
If you want to get rich, do not postpone it for the future. Act now, analyse the environment you work in and see if it is the right environment.
If it’s not, change it. Move in the right environment which will help you get rich.
Not yesterday, not tomorrow. Today is the right time.
If you do things and if you work, at least work efficiently. Inefficiency holds you back.
Each inefficient thing holds you back.
There is a law that says “If you do not do things inefficiently and you do enough efficient things, you will get rich.”
Observe this law in everything you do from now on and never deflect from it. If you feel something is not right, change your style and your work environment.
Evolution, or, better said, the desire to always evolve, is very important when it comes to getting rich.
We all want more from life, due to our desire to evolve.
Always live with the desire to evolve. Always want more money, keep the feeling that you will get rich and do everything you can to stay on that path.
Never brag yourself with your success, because you will be eaten by fears and doubts. “Whenever you meet a show off, be sure that inside him he is eaten by fears and doubts.”
If you believe and inspire evolution to those around you, they will also want evolution.
It is quite complicated and it needs a lot of work to get rich. Getting rich depends not only on your professional knowledge, it also depends on behaviour.
Here are 3 things you should remember from this article:
Getting rich is possible only if you want to know more, to do more and to be more. The more you give from your part, without entering into conflicts with others, the more you will get rich and you will end up changing society.
The moment you become a creator, you will start getting rich.
Evolution. Want more from yourself every day. Act now and efficiently. Inefficiency will hold you back.
I, for one, believe in these laws and I think about them every day. I am convinced that only I am responsible to fulfil my dreams and my desire is bigger than ever to get there.
I recommend you to read this article twice, buy the book and start implementing your dreams. Your desire will get you where you dream.
In the end, I want to invite you to comment based on this article. Tell me your opinion on the way we can get rich.
How do you see the difference between a poor person and a rich person? What does the rich person do compared to a poor person?
You know very well that a budget helps you plan from a financial perspective any activity you have and it gives you an objective image on your personal finances.
Most of the times, after we start using a personal budget, we end up failing to take it into consideration and it stops coinciding with the financial activities we make.
I have to tell you ever since the beginning that it is not easy to make a personal budget. The most difficult part is to stick to the plan.
Personal budget is a plan you make at the beginning of the month and you have to comply with it without any deviation. Most of the times, we see at the end of the month that we have failed to take it into consideration and that we have spent more.
Before analysing your own personal budget, let’s see what the main reasons for its failure are:
5 reasons why a personal budget fails
1. You have very high expectations!
Each time someone makes a personal budget, he/she has high expectations from it. It takes a while until you achieve your own personal budget.
At the beginning, as you are not used to it, you will see that the planned budget does not coincide with the achieved one and differences between them occur.
Do not get scared and do not lose motivation. It is normal!
A good budget is not created over night, or in the second night.
You end up having a budget after at least 6 months. After 6 months, while you were focussing a lot on your expenses and your income, and made a habit out of it, you can say that your budget is good.
Until then, take your time, do not lose motivation and give yourself as much time as necessary to plan your budget each month.
2. Personal budget is not at hand!
We are human. Humans generally forget. We are forgetting small things happening to us daily.
This can be a problem when it comes to organising a personal budget.
If you are a forgetful person, I recommend updating your personal budget daily.
Give yourself 5-10 minutes each evening and update your budget. See what you have spent that day and how much money for spending you have left for the next days.
3. Maybe you are not using a budget model which is in your advantage
There are many budget models you can use. Some of them are online, some even directly on your phone, others in Excel.
I, for one, use a budget model in Excel, which I update each time I go to the computer. I am spending quite a lot of time at the computer and it helps me be in contact with it.
HERE you can find the budget model I use. It is in Excel and easy to use.
I recommend it with the utmost trust.
4. You are forgetting about the expenses for fun!
When we are planning our budget we are tempted to write absolutely all expenses for invoices, food, but we are forgetting the expenses for fun.
We are thinking that we will not have that much fun in that month and we write a small amount.
The reality is completely different. In reality, you go out each week (sometimes daily) and you are spending more than you have set.
It is crazy if you do not plan the expenses with fun. It is a very important category where the amounts can be very high if you are a “party person”.
5. You forget about the “Unexpected or extraordinary expenses” category
You have many expenses in a month. Many invoices, much shopping to do, you have many places to go to.
Once with these “many”, you will end up finding it very difficult to foresee them. Then, there are the extraordinary expenses, which you had no way to foresee, such as: something in your car breaks, the TV/phone/computer etc. breaks.
All these are expenses that can affect your budget.
Best solution: Add10% of the total amount in the “Unexpected or extraordinary expenses” category.
This category will help you get off a lot of trouble without affecting your financial planning.