How to have your increased effort benefit you directly?
Financial Intelligence solves problems as well as produces and keeps the money. It is not how much money you make, It’s how much money you keep. Your job is a short-term solution to a long-term problem.
We should not, like sheep, follow the herd of creatures in front of us, making our way where others go, not where we ought to go. — Seneca
Your path starts with knowing the difference between an Asset(E.g. Real-Estate, Stocks, Bonds, Notes, Intellectual property) and a liability(E.g. Loans, Credit card debts, cars) and focusing on buying assets. Keep it super simple: Assets are things that put money into your pocket, and a liability is something that takes out money from your pocket. Concentrate your efforts on buying income-generating assets.
First say to yourself what you would be; and then do what you have to do — Epictetus
To become rich, you should educate yourself financially and acquire assets. Although Accounting can be seen as a boring subject, it is critical and essential to master it. Financial reporting is reading the numbers, about looking for the plot – the story where the cash is flowing. It’s the story that counts.
No great thing is created suddenly, any more than a bunch of grapes or a fig. If you tell me that you desire a fig, I answer that there must be time. Let it first blossom, then bear fruit, then ripen. — Epictetus
In accounting, the Relationship between the following statements is vital to understanding deeply:
- Balance sheet
- Balances your assets against your liabilities
- Income statement – Profit and Loss
- Shows the revenues and expenses of your agency – Expressed over a period of time (1 year,1 quarter,..)
- Income: Salary, Interest, Rental income, Dividend, Royalties,…
- Expenses: Tax, Rent, loan payments…
- Cashflow Statment
- Tells the story of how a person handles money
Wealth is supposed to grow automatically, to have large enough assets to grow by themselves. Wealth measures “Financial survivability”- How much your money makes money. It’s the measure of the cash flow from your asset column, compared with the expense column.
Lastly, Financial aptitude is about how you manage your money; How to keep people from taking it from you; How to keep it longer, and how to make money work harder for you? What to do with the money once you make it?
Receive wealth or prosperity without arrogance; and be ready to let it go. — Marcus Aurelius