The best financial advice ever | Lessons on economics from the wealthiest

Money is a tool. Nothing more, nothing less.

 Tom Ferry

Money in the hands of the right person thrives. In the hands of the wrong person, it becomes devastating.

The Best Financial Tips Taken From the Wealthy

The financial tips in this post will help you not only to become rich, but wealthy. These are the well-researched tips taken from wealthy men.

1. Save and invest in good causes. What is a good cause? The cause that is a boon to you and others, is an example of a good cause. Invest in your dreams. The dreams that would benefit you and your dependents. 
2. Do not buy anything for the sake of showing off. I can recall an example of Monica Geller of Friends TV series. She buys $100 shoes only to show off. After wearing them she realizes that the shoes are very uncomfortable. In the end, she had to confess, "the shoe bite."
3. Do not purchase liabilities with what little you have. I have seen people who often spend money to buy a car and, they would seldom use it. 
4. Maintain income statement and balance sheet. It creates transparency of cash flow. Lazy people do not keep account of their income and expenditure. Hence, they fail to do something big and significant. They become helpless since they could not control their money, instead, the money starts controlling them. Keeping an account of income and expenditure is a must for both personal finance and organizational finance success.
5. Never stay in debt. If you are already in one then, pay it back promptly. The money you have not earned is anyway taken away from you, whether you like it or not. Do not live a life of a thief. It is a bad omen.
   
6. Earn more and spend less. Differentiate between needs and wishes. Needs could be satisfied, wishes could not. Diminish your wishes.
   

A Practical way to identify the difference between needs and wishes.

Wishes are distracting, while needs are compelling. Suppose you want to buy a table lamp, identify its need first. "I want to buy a lamp so that it can help me in reading at night". "How often do I read at night?" "Is it helpful against a bulb?" Ask such questions to yourself. 

Wait for a month, until you finally decide, whether buying a table lamp was a need or a wish.

Creating multiple streams of income a good idea?

In the beginning, I used to think that creating multiple sources of income is always good. Later I realized that it prevents you from focusing on your main goal. Moreover, it makes you greedy. 

Having multiple sources can be good at beginning of your career but, not in the end. Staying unsatisfied with what you have is an indicator of poverty.

Some people already own many farm fields and bullion stores, still, they crave more, like, they wish to own a mill. It is a sign of hunger and poverty.

There are several rags to riches stories. Similarly, there are hundreds of riches to rags stories.
For example Eike Batista and Bernard Madoff. These people were billionaires once. Down the years, they became bankrupt. If only they knew the rules of finance, they would not have to file for bankruptcy.

Cut the coat according to your cloth

• If you have $100 to start a business with, do not invest $110, instead invest $90 and carry out the experiment.
  

• Do not lend your money to the one already in debt. If you wish to help that person, then donate to him. Do not expect ROI from him.

It takes discipline and mindfulness with money to become rich

Should you donate?

If you donate, God reserves funds for you. Do not donate for the sake of receiving funds back. Donate genuinely. Donate where needed.  

Donate according to your state and ability.

Last but not the least, I urge my readers to maintain accounts. The habit of accounting has to be inculcated from the beginning, since the childhood. It is simple to keep accounts. Here is an example of an account.

Sign (+ for income and - for expenditure)	Amount	Date	Remarks
-	25 +85	18/01/2020	Lunch (sandwich), JK & Dosa for dinner
-	30 +45 +20	19/01/2020	Meduvada, Breakfast, Juice

 Things to mention in an account are,

• Sign: +ve for credit, -ve for debit
• Amount
• Date
• Remarks: Cause of spending

Here is an inbuilt balance sheet for you. You can download and use it.

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