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MY
WEALTH
Financial
Wisdom
Posted:
Oct 2009
What
is the financial wisdom? Is it
only important to earn more
money? Why are people spending
more than the can earn?
The
problem with the money is not
only how much you earn, but also
how much and at what way you are
spending money. Most of the people
believe that the secret of
wealth lies within finding out a
way to earn more money. "If
I could only earn more"
many people think. Probably you
think the same way.
In
reality, the truth is completely
different. If you asked people
who recently got a raise, about
what the did with the
difference, what would they say? Did
they increase saving after they
have got a raise? In most of
cases the answer is no. Simply,
if we earn more, we spend more. If you give a raise of $ 1.000 to somebody it
is very likely that he will buy
a new car with the monthly
installment of $ 1.200. That
will bring that person to worse
financial situation than before,
despite the fact that the income
is increased.
This
is kind of universal rule, the
more they earn, the more they
spend. People spend more money
if they are in position, and
they are in the same or worse
situation than before. It has
become normal that people spend
all that they earn. People are
living from one salary to
another. If something unexpected
happen, like extra cost or delay
of salary payment, people is in
trouble. In that situation they
need to borrow the money. Some
people are even spending even
beyond the limits of the
earning, by using the bank
"products",
loans, credit cards, ... This is
a lifestyle that certainly leads
you to stress, uncertainty and
fear for the future.
But
why are people careless with
spending the money? Probably
because they lack a financial
wisdom. We never have a chance
to learn about financial wisdom
neither in school nor in family.
Simply, spending makes us happy.
Who cares about the financial
problems? We will care about
them when they come. Since
people do not have sufficient
financial wisdom, meaning they
do not govern with their own
money. Many advertisers are
utilizing this as an opportunity
for sales. Advertisers are
suggesting you to spend money,
even the money that you do not
possess. In most of the cases
people are buying this
suggestion. Commercial
advertisement is creating the
desire for advertised product.
Once you have the desire it is
only the matter of time when you
will trigger the spending.
People behave as they do not
live they own life but one that
is created for them.
You
do not have enough money? No
problem, the banks are there
to save you. Or it is better to
say that they will take the
money that you didn't even
earn yet. In return they
will take you the commission
that you consider to be
small. Loans, credit cards,
debit cards, revolving card,
... The choice is yours.
Many people think that
credit is genius invention.
It may be for the bank, but
for consumer it is more like
a curse. If somebody is
offering you a large LCD TV
for only $ 99,99 a month,
people consider this as a
generous offer. But people
often lack the financial
wisdom to understand the
long-term consequences for
their personal finances. The
whole system of crediting is
not in your favor, it is
turned against you. The
House always wins, not you.
Just take a look at any
bank, their huge buildings,
expensive equipment and
furniture. Somebody needs to
pay that. The one that pays
that is you, unless you have
enough financial wisdom.
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Financial
wisdom is not measured by
the amount that you earn but
with the amount that you
keep and reinvest. Financial
wisdom is measured by making
your money work for you
instead you work for the
money. It is final hour for
you to start thinking about
your personal finances in a
way that will make you
financially wise.
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