It doesn’t matter about how you do things until you know about the purpose, the limits and the underlying important things.
The “W” questions.
Financial success is merely organized common sense. Once you understand, the rest makes sense.
When you understand, the hype, the complexity and the urgency fade to black.
Money does not do everything. You must decide what you want and then decide how money can help.
You can know what you want and how money fits, but that’s not helpful until you know where money comes from.
Money is always earned. You trade something of value for money. Usually time and skill in the beginning. What you earn and do not consume is capital. Capital is the basic of financial growth.
The other wheres
- Receive an inheritance or gift. Good to get, but hard to rely on. Someone else earned it. The earning thing again. Most people inherit money in their 60s, so a bit late for entrepreneurs.
- Borrow is a source of capital. It works if you do it right. The obvious fact is it costs to do it. Not a problem if what you buy with borrowed money earns more than it costs or reduces other expenses enough. Borrowing for consumption eventually loses. You need capital of your own to borrow. No one will lend 100% of a deal. You have to save to be able to borrow.
The sooner you start money working the better. Money grows with compounding interest. To catch this you must learn to find how long it takes to double. 7% takes about 10 years. 12% takes about 6 years. How many years do you have?
That period matters because the last double earns more than all the ones before it. If you start late you won’t get to the last double.
The who capital gets you the other capital. Time.
Few successful people are good at everything. The best of them do what they are best at and not a lot else. Delegation gets you another source of capital. Someone else’s time and skill. It costs, just like interest, but capital wins.
Learning to trade money for time is a powerful tool.
The bonus is you don’t have to listen to the pundits
Financial literacy is about allocating your money and time capital to growing money and freeing time. Once you learn about that, all the how rhetoric becomes just noise.
Schemes don’t matter.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario.
In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. email@example.com 866-285-7772