5 Simple Money Rules You Must Know If You Want To Be Rich
There are certain rules that the rich people adhere to and follow in order to remain wealthy. They understand that if those rules are broken, they will fall into poverty. They understand that there is no safety and security in being poor; if they follow these rules, money continues to flow into their hands and they never fall into poverty. These are the five ground rules.
1. A salary alone will not make you wealthy.
Salary will never make you rich enough to live the financially secure life you desire. You want a life of financial security. When you work, you are constantly exchanging your time for money, which can be detrimental to your health. When you work for the next thirty days, you already have bills and expenses lined up to reduce your salary to almost nothing making financial life difficult for you must begin working on yourself and creating your future by developing your skills and pursuing a side hustle.
2. Applying the compound principle.
The rich use the compound principle to grow richer and double or triple their money in a short period of time. Because of the mystery of increasing and growing your money, some consider the compound principle to be the eighth wonder of the world. If you are a stock investor, for example, when you buy dividend-paying shares, reinvest the dividend and buy more, and keep compounding until the market moves at a rate that increases your income and makes you richer.
3. Purchase assets rather than liabilities.
When the rich people purchase assets, they are ensuring a secure future. They’re also using it to build a future of financial security and consistent cash flow for themselves. When they buy assets, they make their money work for them, allowing them to live above inflation. When they purchase assets, they are no longer a slave to a salary and are no longer reliant on a single source of income. They reduce their liabilities.
4. Always pay yourself first.
The rich developed the practice of paying themselves first before paying any bills or doing anything else. The wealthy use it as a means of creating the future and as an act of financial discipline to know what goes in and out of their finances, allowing them to manage their finances prudently. They can generate more assets than liabilities by paying themselves too little or nothing in order to create a future for themselves.
5. Money is destroyed by inflation.
Inflation is currently high and may continue to rise; you should be aware that the higher the inflation rate, the less valuable your money becomes. When you deposit money in a bank, the value of your money decreases. The N1,000 of ten to fifteen years ago is now nearly equal to N100. Because of the impact of inflation, that amount could have been bought more years ago but can only buy less now.
Read Also: 11 Common Habits Of Wealthy Millionaire
You must be logged in to reply to this topic.