Fundamentals of financial management

Money plays an important part in our daily lives and makes the most of it helps us save life from financial pressure. Knowing basic rules can make life easier for yourself and those who depend on you. Here are my basic rules.

The first rule. Do not buy money on consumables. What are consumables? These are things that lose their value over time. The things you want, but you can live without it. For example, electronics, magazine subscriptions, car mobiles, etc.

The second rule. Live within your device. In other words, they spend less than you do. I know it sounds tough if you have a budget, but it's easy to relieve it, if it's available, you just call a financial catastrophe.

The third rule. Be financially trained. You can only do this by reading all available investment opportunities. There is indeed no excuse for not keeping up to date all the financial news because there is so much information on financial issues that are online or offline.

Rule 4. Diversify. One mistake some investors have done in the past to put every egg in one basket to find out the company into which they invested in the bellyup. Prudent investors diversify. They spread their money to different companies to minimize their risks.

The fifth rule. Good company. There are people who are badly concerned with financial planning and money in general, and if they spend too much time with these people, attitudes may affect their thinking.

The Sixth Rule. Take responsibility for your own finances. Some people just ask others to blame if things do not work for them. A financial advisor will tell you this or that, but at the end of the day you have the money and you are the one who gets the rewards when the markets stand up or reach the hit when they are down.

Rule seven. Look at your investments in the long run. Investing in our savings is a long-term game and, in order to take advantage of market profits, you have to hit your faith occasionally, which means you do not panic when markets are lagging behind

The Eighth Rule. Keep in mind the big picture. In other words, goal or goal in mind. Are you saving a house deposit or retirement?

Source by Robert Alan Stewart

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