Inflation is the decrease in the value of a currency over time. Knowing about this problem early is extremely beneficial for you because you will not be able to let all your money in the bank lose value gradually.
Instead of leaving the entire amount in the bank, you should use a part of it to invest and grow in other ways.
As a general rule, you should know how much cash in the bank is reasonable to cover your average monthly expenses.
Then, depending on your risk tolerance, you will decide what percentage of your savings to invest.
2. Bad debt and good debt
People often advise us “Don’t owe people money”, and in fact in life there are many people whose debt has become so piled up that they cannot pay it off.
However, there is a clear difference between bad debt and good debt.
Good debt is when you borrow money with the purpose of increasing your net worth or it can create certain value for you in the future, such as a home mortgage or a student loan.
It’s about using leverage to your advantage, which is a really smart thing to do in the financial world. So you really should take advantage of good debt.
However, keep in mind that you should pay off your debts in full every month and pay them off as soon as possible because it will be your trouble if you keep piling up in debt.
3. Invest early
This is something you should have known since high school, because then you can understand compound interest earlier. Therefore, you should learn about compound interest and how the stock market works as soon as possible.
Don’t be intimidated by the stock market, no matter what age you are, it’s probably not too early for you to learn about it. Learn about stocks, bonds, investment accounts, and real estate investments. And now there are many resources for you to learn about them.
What you have now is your youth. If you start now, the amount will increase gradually over time and this will really play a very important role in your life later.
4. Asking questions about money, money is not taboo
Money lesson number four: Don’t be afraid to talk to people about money, speak up and ask questions. That’s the only way you can compare information and learn from them.
In the communication culture, we can see that money is often considered a taboo that should not be discussed. However, money should not be a taboo subject because we can share information to learn and grow together.
So you can chat with your friends about an investment or people in your industry about salary and work experience. Not only can it empower you to grow, but it also helps you define your own worth.
5. Calculate the long-term path
Lesson number five that you should know early is to think for the long term with your spending.
My guess is that once you start earning money, you will often spend it on trendy luxury items or dining at expensive restaurants to upgrade your lifestyle. But is it really worth it?
You should consider that some things have only short-term value and are fleeting while many others are better investments for the long term. So instead of spending a hundred dollars on a hearty meal for yourself, where could you put that hundred dollars?
Sometimes that money is enough for you to buy a device to upgrade your productivity at work, or it can be enough for you to sign up for an advanced course to equip yourself with more skills.
Think about the value of your dollar and how to spend it in a way that can help you in the long run. Before buying an item, ask yourself if you really need it or are you simply buying it to impress others.
6. Plan your retirement now
Many of you will think this seems like a far-fetched and far-fetched thing, but you need to know that in retirement you have to make sure that you can take care of yourself without depending on social security but still have enough money to live comfortably.
One piece of advice for that is that you should start learning about the types of investments you can make to give you passive income today, a common example of this is investing into real estate. By investing in real estate, at least when you are old you will have a stable income from monthly rental.
Surely no one would want to live a life where, when you are old, you still have to work hard because it’s too late to save money. Therefore, for your future, make a retirement plan for yourself right now!
at Blogtuan.info – Source: cafebiz.vn – Read the original article here