Connect with us

Success Advice

7 Rules of Money That Will Keep You From Going Broke

Published

on

money

Financial challenges are a consistent and somewhat predictable occurrence. At one point or another we all struggle to keep up with our bills despite having a so-called “good job,” or barely have enough money to survive. Even a celebrity like Mike Tyson, who earned close to $300 million in his prime lost everything because he ignored and disrespected the rules of money.

The rich people we look up to seem to have mastered the rules of money because they took the time to study and educate themselves.

If you want to get your money game right you need to learn these critical principles below and apply them religiously:

1. Assess your current situation

Many people are under the illusion that their financial situation is in great shape. That’s because they never take the time to assess their current situation. To achieve financial freedom, you need to know where you are before planning where you’re going.

Take some time to calculate your total debt and the cash value of all your assets. If your assets exceed your debts, you are in good shape. However, if your debts exceed your assets, that means you are broke. You need to think of ways to pay off your debts by either earning cash from a second job or creating and selling products.

This is not an easy task, but it can be done once you have a plan and are willing to do whatever it takes to work your plan.

“The first step towards change is awareness. The second step is acceptance.” – Nathaniel Branden

2. Measure and manage everything

Peter Drucker once said, “what gets measured, gets managed.” Having a budget is the cornerstone to building a financial fortress. There are several ways to create a workable budget. You can use a tool like an excel spreadsheet or a fantastic piece of software like You Need A Budget “YNAB”  to track your income and expenses.

Once you have gathered some data, periodically go over your expenses, to ensure that you catch any fraudulent charges and unauthorized transactions that might have slipped past you.

3. Be logical when making expenditures

The worst time to go shopping for groceries is when you are hungry. That is because you are driven by the need to satisfy your appetite at that moment. Meeting your current emotional needs clouds your ability to make rational decisions.  

Nobody earns their money because of emotions. Emotions are the leading cause of expenditures. Logic is the driving force of income. The universal principle is we engage in logical activities that create value, and then trade the value created for money.

Simply put, when it comes to affairs of money, emotions cannot always be trusted if you are trying to preserve or increase your wealth. Always look for ways to save money on expenses but be courageous, daring and decisive when making investments. Make it a game and enjoy it. Remember money earners rely on logic, money spenders rely on emotions.

4. Diversify your source of income

There are very few millionaires and billionaires in the world that rely on one source of revenue. This advice is very common in the business/finance community but is often overlooked. Many people believe that the money they make from their jobs plus their retirement contributions is enough to sustain them for the rest of their lives. News Flash! Your current income or retirement plan will never be sufficient to support you.

No matter how busy you are or how challenging it may be, you need to start thinking of ways to earn some alternative source of income. You can either freelance online with your current skills online, launch a gig economy business like driving for Uber during your off time or renting out your free space on Airbnb.

No matter what you do, the goal is to start getting something extra coming in when you don’t need it because sooner or later you will have no choice. This principle is especially important during periods of systemic market upheavals like recessions.

“Never depend on a single income.” – Warren Buffet

5. Focus on the future

Achieving financial freedom requires a massive dose of discipline and responsibility towards managing your cash. You cannot fall for every hot stock tip or buy into every new get rich quick program. Success leaves clues. There’s always a trail of how people make money.

For every Elon Musk that creates a Paypal, there are a few dozen others who will create a Dwolla, Square or Stripe. To become independently wealthy you need to study long-term trends, human nature, and cultural and geopolitical dynamics. I have found that the best way people get rich and stay rich is to provide a solution to one of the seven needs in Maslow’s hierarchy.

6. Be antisocial for some time

Getting your financial house in order requires you to make some tough decisions which will have an adverse impact on your social life. That means learning to say a big fat “NO” to socializing with friends and family. I am not saying your friends and family are the cause of your problems, but they are the unwitting enablers that will help you stay in your problem.

Use your reclaimed time to upgrade your abilities by learning new tools, skills, and languages. The sweet spot for financial freedom is usually at the intersection of your passions, skills, and opportunity.

7. Be obsessed with achieving results

Your initial financial freedom plan is going to fail. I am 97.75% certain of that. In spite of the guaranteed failure, I believe something in this article will resonate with you, and push you to act with purpose.

Once you start moving with purpose, you need to be obsessed with achieving results. If something works for you, keep it. If it does not work, cut it out and try something else. It is your plan. You are the secret sauce. Tweak it, Twerk it, Remix it, Work it. Do whatever you need to do to make the plan work for you.

“Most people fail in life not because they aim too high and miss, but because they aim too low and hit.” – Les Brown

Which one of these rules are you going to focus on first? Leave your thoughts below!

Chi Odogwu is a writer, speaker, teacher and a business growth consultant. He helps fast growing private companies with $500k - $5M in annual revenues scale up by taking advantage of underutilized digital marketing strategies. He is a thought leader in the direct response marketing field. Chi is also an avid student and teacher of personal development and success principles. You can connect with Chi through his website www.odogwu.com or through his Facebook.

Advertisement
3 Comments

3 Comments

  1. P.R. Deshappriya

    Jan 15, 2017 at 4:26 am

    Really Really nice article.
    Thanks

  2. Yair Ausubel

    Jan 12, 2017 at 5:31 pm

    Awesome article.
    Thanks.
    Just discovered addicted2success.com and can’t want to be addicted2success

  3. Ewen Munro

    Jan 10, 2017 at 11:40 pm

    Great points, Chi! 😉 #keepgrowing #keepcreating

Leave a Reply

Your email address will not be published. Required fields are marked *

Success Advice

5 Key Steps to Becoming a Successful Blogger

Published

on

how to become a successful blogger
Image Credit: Unsplash

Blogging…the great form of getting your thoughts onto the web while being informative or entertaining, or both! If you’re new to the whole blogging scene and want ideas before you start your blogging adventure, keep reading because there’s some simple, yet effective steps. (more…)

Continue Reading

Success Advice

10 Things You Can Start Doing Today to Succeed With ZERO Talent

Published

on

how to succeed without talent
Image Credit: Unsplash

Sometimes you see someone great and we say they’re talented and that’s how they got there. We put ourselves in victim mode  when there’s so much we can do to produce results and become successful. (more…)

Continue Reading

Success Advice

How to Have More Money: 5 Secrets You Need to Know to Be Wealthy

Published

on

how to have more money
Image Credit: Unsplash

Why are some people wealthy, while others struggle to survive, living pay check to pay check?  You can take two people from the same background, even the same family, with the same education and opportunity, and they will get different results. One will succeed, and one will fail. Why? Watching members of my own family get different results even though they were given the same information taught me valuable life lessons about building wealth. (more…)

Continue Reading

Success Advice

6 Tips for CEOs to Master Work-Life Balance

Published

on

how ceos can have better work-life balance
Image Credit: Unsplash

For many CEOs, workdays mostly consist of managing an almost endless stream of emergencies. It can be difficult for them to find time for strategizing, generating ideas, and developing long-term goals because they’re constantly putting out fires. These dueling responsibilities can easily lead to burnout and sacrifices in the executive’s personal life to make more time for work. (more…)

Continue Reading

Trending