All people dreams of becoming financially secure, however not many individuals actually accomplish it and this is mainly as a result of bad money management skills. A lot of people have unacceptable attitude in terms of money management also it can have a drastic affect against your financial security. The very first thing that you ought to do, which you can do at the moment, is to analyze your current situation and money management systems. There are actually five common types of money management, the first four of which lead to financial failure, and they are:
1. To Spend
Often people who spend are only living for ‘today’. It is surprising that the average person just has a cash reserve to last them 2 months. The spenders will never achieve financial security, unless they win the lottery or receive an inheritance. However, if they do come into dollars in this way, they will most likely spend the funds which can lead to more financial hardship.
2. To Gamble
The gamblers are those who are willing to put everything on the line and take on huge financial risk on an impulse with the idea of hitting the ‘jackpot’. The gamblers take an aggressive technique to investing, they’ll take on substantial high risk to receive a financial gain. Usually, gamblers lose big money.
3. To Speculate
People who speculate come to a decision influenced by a calculated investment risk and they follow what they think will occur. The speculators often come up with uneducated decisions as to how to earn more and will usually take on high risk to get a financial gain. Typically, they’ll lose their investment cash.
4. To Save
People who save usually keep their savings in a protected banking account and try to avoid the investing risks no matter what. The savers are in fact making an effort to increase their financial security, however by avoiding the risk of investing their small interest gains on their savings account will be eaten away by taxes and inflation.
5. To Invest
Investors are people who put aside savings of at least 10% of their yearly income to be able to accomplish a financial goal. Investors are willing to accept moderate levels of investment risk to achieve their goals, nevertheless they have a lot of strategies set up to hedge against risk. Sophisticated investors often put aside cash reserves to be able to capitalise on an opportunity that may arise in the future.
One key distinction between the different classes of money management styles is that most investors are focused on furthering their investment education and many are also involved in personal development as both go hand in hand.
The next step is to make the decision for being an investor and use the congruent money management style. You should also decide how much risk you are comfortable with, are you a conservative or aggressive investor?
The very first step I want you to take is to sit down and evaluate your current position and money management habits. Make a decision concerning how you want to proceed, it’s your choice. Keep in mind that if you spend, save, gamble or speculate, you’ll only achieve some form of financial failure. Therefore your focused on achieving financial freedom, becoming an investor is the way to go. Nothing ventured, nothing gained.
Thank you for making the effort to read this article and I hope it is of value to you.
My name is Michael Chen. I am passionate about helping others accomplish their financial dreams by creating wealth using various strategies, including stock market trading, learn forex trading, property investing and online businesses strategies such as foreign currency trading and forex free trading. For more information how you can not only create but accelerate your wealth creation, please visit learnforexsecrettrading.com.