20 truths to change your perspective on money:
1) Money is fake. The U.S. dollar has no inherent value, it's a symbolic representation of value. It's a medium of exchange printed out of thin air, whose value is derived from trusting a government.
๐งต2-20:
1) Money is fake. The U.S. dollar has no inherent value, it's a symbolic representation of value. It's a medium of exchange printed out of thin air, whose value is derived from trusting a government.
๐งต2-20:
2) Marriage has a significant impact on your finances. Who you choose to marry is one of the most consequential decisions of your life.
Your spouse can either cost you or make you money
Making the wrong decision can cost a lot of money, such as your time, peace, and legal fees.
Your spouse can either cost you or make you money
Making the wrong decision can cost a lot of money, such as your time, peace, and legal fees.
3) Avoid high-interest consumer debt. You can't out-invest a 25% interest rate from a credit card.
Consumer debt robs you of your future because you are using the money you earn today to pay, off things from your past.
Consumer debt hurts your ability to invest in your future.
Consumer debt robs you of your future because you are using the money you earn today to pay, off things from your past.
Consumer debt hurts your ability to invest in your future.
4) Saving $5 on a coffee won't build wealth, but saving money on big-ticket lifestyle decisions such as housing and transportation costs can.
Downsizing to a smaller home, choosing a more affordable area to live in, or a less expensive vehicle can make a big impact.
Downsizing to a smaller home, choosing a more affordable area to live in, or a less expensive vehicle can make a big impact.
5) Invest or inflation will erode the purchasing power of your money.
If the inflation rate is higher than the interest you are earning on your savings, then your money will be worth less over time.
With inflation over 8%, you lose half the value of your cash in 10 years.
If the inflation rate is higher than the interest you are earning on your savings, then your money will be worth less over time.
With inflation over 8%, you lose half the value of your cash in 10 years.
6) A 9 to 5 job won't make you rich. While a traditional 9 to 5 job can provide a steady source of income, it's unlikely to result in significant wealth.
Also, earned income is the most heavily taxed form of income.
Also, earned income is the most heavily taxed form of income.
7) Millionaires have multiple streams of income.
The rich don't work for money, they have money work for them.
This includes investments in real estate, businesses, and the stock market.
The rich don't work for money, they have money work for them.
This includes investments in real estate, businesses, and the stock market.
8) The miracle of compounding interest is wonderful.
Compounding interest is the process of earning interest on both the original investment and the accumulated interest over time.
Your money will grow at an exponential rate, rather than just a linear rate.
Compounding interest is the process of earning interest on both the original investment and the accumulated interest over time.
Your money will grow at an exponential rate, rather than just a linear rate.
9) If you spend less than you earn, you will have a surplus of money that you can use to pay off debt, save for emergencies, and invest in your future.
By being frugal you are being more resourceful with money and prioritizing your spending on what is important to you in life.
By being frugal you are being more resourceful with money and prioritizing your spending on what is important to you in life.
10) Choosing a high paying major in college can offer a good return on investment over the long-term.
Consider the cost of attending college and obtaining a degree, as well as the potential debt you may incur, when evaluating the return on investment.
Consider the cost of attending college and obtaining a degree, as well as the potential debt you may incur, when evaluating the return on investment.
11) 50/30/20 rule is helpful for budgets and can be revised for individual circumstances & financial goals
โข 50% on necessities (housing, food, transportation)
โข 30% on discretionary spending (entertainment, dining out, shopping)
โข 20% on savings, debt payment & investing
โข 50% on necessities (housing, food, transportation)
โข 30% on discretionary spending (entertainment, dining out, shopping)
โข 20% on savings, debt payment & investing
12) 3-month emergency fund
Establish an emergency fund to cover 3-6 months of living expenses for unexpected events.
Everyone needs an emergency fund so they have access to money in a pinch, and it also protects you from going into debt during unexpected events.
Establish an emergency fund to cover 3-6 months of living expenses for unexpected events.
Everyone needs an emergency fund so they have access to money in a pinch, and it also protects you from going into debt during unexpected events.
13) The rule of 72
A tool to estimate the number of years it takes to double an investment.
Divide 72 by the interest rate to estimate the number of years required to double an investment.
For example, at 9% interest, it would take ~8 years (72/9) to double your money.
A tool to estimate the number of years it takes to double an investment.
Divide 72 by the interest rate to estimate the number of years required to double an investment.
For example, at 9% interest, it would take ~8 years (72/9) to double your money.
14) The 4% rule
This rule is
A popular rule for retirees withdrawing from their investments to cover their living expenses, based on historical stock market returns.
This rule states that you can withdraw 4% of your portfolio value each year, without running out of money.
This rule is
A popular rule for retirees withdrawing from their investments to cover their living expenses, based on historical stock market returns.
This rule states that you can withdraw 4% of your portfolio value each year, without running out of money.
15) Health is wealth
Many expensive medical issues are caused by poor sleep, lack of exercise or bad nutrition.
Medical bills are expensive and add up.
Being healthy can increase productivity, energy and overall well-being, leading to more opportunities for wealth creation.
Many expensive medical issues are caused by poor sleep, lack of exercise or bad nutrition.
Medical bills are expensive and add up.
Being healthy can increase productivity, energy and overall well-being, leading to more opportunities for wealth creation.
16) Needs vs Wants
The distinction between needs and wants helps to prioritize spending.
Identifying the difference between your needs and wants can help you create a budget, reduce unnecessary spending, and reach your financial goals.
The distinction between needs and wants helps to prioritize spending.
Identifying the difference between your needs and wants can help you create a budget, reduce unnecessary spending, and reach your financial goals.
17) Opportunity cost.
If you make $20/ hour:
โข that night out isn't $300, it's 15 hours of your time or 2 days of work
โข that car isn't $50,000, it's 2,500 hours of your time or 357 days of work
Time is your most valuable asset so don't waste it
If you make $20/ hour:
โข that night out isn't $300, it's 15 hours of your time or 2 days of work
โข that car isn't $50,000, it's 2,500 hours of your time or 357 days of work
Time is your most valuable asset so don't waste it
18) Don't buy "too much" house
If you take on too high of a mortgage payment and fall behind, you risk foreclosure.
If you take on too high of a rent payment, and can't keep up, you risk eviction.
You could end up homeless from overspending on housing.
If you take on too high of a mortgage payment and fall behind, you risk foreclosure.
If you take on too high of a rent payment, and can't keep up, you risk eviction.
You could end up homeless from overspending on housing.
19) A car is a depreciating asset
If your car payment is higher than your credit score, you don't need it.
Don't overspend on an expensive car, just to drive it to a job you hate.
If your car payment is higher than your credit score, you don't need it.
Don't overspend on an expensive car, just to drive it to a job you hate.
20) Get your credit score in order.
Having good credit makes life easier and will save you thousands.
A good credit score can lead to lower interest.
A low credit score can result in higher interest rates and difficulty getting approved for loans.
Having good credit makes life easier and will save you thousands.
A good credit score can lead to lower interest.
A low credit score can result in higher interest rates and difficulty getting approved for loans.
The world's most valuable skill is being good with money. If you found this thread helpful:
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โข๐RT the FIRST tweet
โข Sign-up for my FREE newsletter to master your money: FluentInFinance.Substack.com!
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