Buffett once said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.” And it’s true. Planting and nurturing the seeds of financial success now will lead to shade to enjoy later in life. That shade might include freedom from debts, a secure retirement or the ability to cover the cost of college for your children.
Such a long-term view of money is central to Buffett’s investing decisions. In his 2014 letter to shareholders, he said people should “invest with a multi-decade horizon … Their focus should remain fixed on attaining significant gains in purchasing power over their investing lifetime.” He urged investors not to focus on moments of stock market volatility or economic crisis.
Building true wealth and financial security takes time, and you’ll likely encounter financial challenges along the way. But viewing your finances as a lifelong endeavor can help you stay on course despite hardships. That gives you a financial foundation that will last.
Financially literacy is being able to understand money and how it works and it's a skill that every entrepreneur has to master inorder to have financial freedom and financial literacy also includes comprehension of certain financial principles and concepts
such as :
the time value of money,
compound interest, managing debt,
long term financial planning,
budgeting.
And investing etc
some of the principles of financial literacy include :
1.invest more in assets other than liabilities .
*what are assets and what are liabilities?*
simple put ,assets is something that puts money in your pocket and liabilities are things that take money out of your pocket.
for example if your car takes away more money myb through fuel ,servicing etc than it actually brings you money ,then it's a liability not an asset.
financial literate people invest more in money generating things.
your expenses should never match your income because it never allows you to have enough left to invest in assets as a result liabilities become larger than assets.
therefore keep liabilities down so that money will continue to flow.
Robert kiyosaki once said .. *"more money seldom solves money problem, but intelligence solves problems"* hence remember the single most powerful asset to invest in is your mindset.
2 don't diversify with too little money ie
if you still have little money ,play it safe learn to manage risks and stay focused.
3.get education in personal finance for example:
a) have an appreciation in accounting and cash management .
b) learn how to invest
c) understand markets ie understand the basic rules of supply and demand
d) understand the law ..
4.save 10%from your income..
5.seek for advice from people that have made it.
6.grab opportunity ie be a risk taker.
7.stop procrastinating.
8.hang around with smart people ,that will challenge you.
9. learn to pay yourself first ,meaning mastering self discipline nd learn to control yourself .
By
Comments
Post a Comment