Expert
Be Wise When Spending Money
30.09.2009
A lot of people say that earning money is easier than spending it. However, they are not right.
We think that you have run across newspaper articles or watched TV shows about lucky people who had won a big money prize in the lottery, and speculated on how you would have spent this money in their place. Most probably, you were thinking about a spacious apartment, mansion, car, yacht, Canary Islands, a private plane, or even a piece of land on the Moon… Then you forgot about these lucky people and so did the press. Well, do you know that very few lottery winners manage to save and multiply their sudden wealth? Moreover, American sociologists say that:
We think that you have run across newspaper articles or watched TV shows about lucky people who had won a big money prize in the lottery, and speculated on how you would have spent this money in their place. Most probably, you were thinking about a spacious apartment, mansion, car, yacht, Canary Islands, a private plane, or even a piece of land on the Moon… Then you forgot about these lucky people and so did the press. Well, do you know that very few lottery winners manage to save and multiply their sudden wealth? Moreover, American sociologists say that:
- 80% of people coming into big money lose it during a year while remaining 20% manage to keep it during five years, no more;
- 50% suffer from nervous system disorders and 12% of these people get to mental hospitals;
- 30% become alcoholics;
- 12% commit suicide.
As you can see, spending money is not that simple and requires certain abilities and logic.
A Russian proverb says that money sticks to money. In other words, rich people have both a bank account and the opportunity to add funds to it. As for the poor, they do not have enough money to start their business and get into a trap – they cannot earn money because they don’t have it and they don’t have money because they cannot earn it. Is there any way out? Naturally, there is one. First of all, you should learn your attitude to money and change it if necessary. We’ll start with a little test that will show your earning limit. How much money a month do you need to be happy? Now put the sum down on your paper, divide it by two. The sum you get is your earning limit. Do you want to earn more? Then cheer up and move towards your aim.
You may also see how smart you are in making money work for you. Imagine you have the amount of money you’ve always dreamt of. Now make a list of things you want to buy and try to find the way of earning money by using your purchases. This ability is the essence of wealth.
A Russian proverb says that money sticks to money. In other words, rich people have both a bank account and the opportunity to add funds to it. As for the poor, they do not have enough money to start their business and get into a trap – they cannot earn money because they don’t have it and they don’t have money because they cannot earn it. Is there any way out? Naturally, there is one. First of all, you should learn your attitude to money and change it if necessary. We’ll start with a little test that will show your earning limit. How much money a month do you need to be happy? Now put the sum down on your paper, divide it by two. The sum you get is your earning limit. Do you want to earn more? Then cheer up and move towards your aim.
You may also see how smart you are in making money work for you. Imagine you have the amount of money you’ve always dreamt of. Now make a list of things you want to buy and try to find the way of earning money by using your purchases. This ability is the essence of wealth.
Waste of money
If you ask any businessman how much money he has in hand, he will name quite a small sum, because most of his money is invested in business. By the way, investments prevent businessmen from wasting their money while this is the major mistake of people coming into sudden money. Does your dream list begin with an expensive car, home theater, or a stereo? Please cross them out or write them at the end of the list because these purchases won’t bring money to you. When you buy a car, it costs $15000, but when you start driving it, it costs 15% less. A year of driving a car makes it cheaper by 25%, etc. Think every time when you want to buy something. For instance, a car we used as an example will pay for itself if bought for business use.
You will be able to buy a car or home theater – everything is good in its season. You should just realize that there are purchases of primary and secondary importance.
You will be able to buy a car or home theater – everything is good in its season. You should just realize that there are purchases of primary and secondary importance.
What should I buy first?
You should spend your money on things that will do good for you. They are:
- Education. The more qualified you are, the more expensive your services will be. You can always use your knowledge to earn money.
- Realty. The currency is unstable, a car may break down, but realty always carries a value. If you have the opportunity, buy an apartment or a piece of land and draw up a rental contract with somebody!
- Health. Low cost preventive health care (regular visits to the doctor, заболеваний (регулярные походы к врачу, sports, etc.) is more pleasant than the treatment for a disease.
- Bank deposits. Well, the interest income is low but it is better than nothing. Moreover, the less money you have in hand, the better (you already know why).
- Pension plans. They are not a waste of money. We doubt you want to depend on your state’s laws or relatives.
I want to have a good deal of money…
You dream will never come true unless you sacrifice something for it. Look through a few rules of a millionaire:
- Live on 10% of your income. This rule turned a simple American guy living in a poor neighborhood into one of the wealthiest men in the world. He lived on 10% of his monthly income and saved the remaining 90% to start his business.
- No money wasting. We’ve already spoken about it.
- Be resistant to advertising. Do you really need a newer washing machine with a few more options you’ll never use?
- Be hungry for money. You should try spending more money but not more than you earn. Remember that you deserve a much better life!
Does it all seem too complicated? Don’t give up! A long way always begins with a first awkward step.
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