Psychology of money

Never spend all your money - 6th of top 14 things you should start doing immediately to get rich

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Note: This is the fifth of 14 consecutive posts from 2nd to 15th of April about the principles of how to get rich. Check back daily or subscribe to the RSS feed

Credit card debt is an increasingly bigger problem in the US, Europe and parts of Asia. It seems that the convenience of buying something and paying for it afterwards in small payments is a luxury that is difficult to give a way.

In spite of hundreds of millions of credit card users there is however a substantial part of population who don’t use credit cards. If we take a closer look we will see, that these people mainly fall into 3 groups:

1. People who have been in major credit card or other debt that have faced the difficulties of paying back their enormous debts. These people have promised themselves that they will never use a credit card or take a loan again. Most people who have managed to come out of tens of thousands of dollars of debt usually end up by cutting their cards.
2. People who don’t trust banks or anybody but themselves to keep track of their money. A lot of Hispanics but also a good number of black and white people do the same. These people only use cash. For them cash truly is king,
3. People who are determined to go through life without debt.

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Posted in Cutting costs, Future value of money, Investment principles, Saving money, getting started | 7 Comments »

Make a budget and stick to it - 5th of top 14 things you should start doing immediately to get rich

Note: This is the fifth of 14 consecutive posts from 2nd to 15th of April about the principles of how to get rich. Check back daily or subscribe to the RSS feed

Making a budget is one of the most important instruments that you can use in order to help you become rich.

The reason that a budget is so powerful is that it enables you to see into the future. If you make a good budget that you are able to stick to means that you know in advance how much money you are going to spend. And even better - you know what you will spend it on! Knowing your expenses let’s you come up with the sum that you can comfortably keep to yourself - the money that is going to make you rich.

There is nothing to be ashamed of when you are unable to exactly follow your budget for the first few times. As time moves on and you get more experience on making and following a budget it gets easier to stick to it. When making your first budget it can be easy to underestimate the amount of money you need for eating out, for spending quality time and so on.
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Posted in Cutting costs, getting started | 2 Comments »

The natural law of money

Each and every one of us has seen the natural law of money at work.

It is so simple that most of us are familiar with the law in a subconscious level but almost never think about it consciously.

So what is this law you ask?

It is simple. The natural law of money is as follows:

The more money you have the faster you will get to the point that you don’t have any money at all. The less money you have the slower you will get to the point that you don’t have any money.

In other words - the more money you have the faster you will spend it.

This is a universal law but it only works in the middle of the scale - it will cease to work when you don’t have any money at all or if you are a wealthy multi billionaire.

So, the natural law of money says that the more money you have the faster you will get rid of it?
How can this be you ask? It is common knowledge that in order to make money you need to have money in the first place - aren’t these 2 statements contradicting?

Well, not really - the natural law of money only works if you are not thinking about how to make more money. If you start to think about how to keep your money - or better yet - how to grow your money then the natural law of money stops working.

If you start thinking about how not to spend your money your chances of multiplying what you have grow exponentially.

Posted in Cutting costs, Goals, Natural law of money, Saving money, getting started | 3 Comments »

How cutting costs works in big companies

American Airlines saved $40,000 in 1987 by eliminating 1 olive from each salad served in first-class.

If you are planning to make it BIG then think about that - everything - no matter how small - matters.

More facts about the airline industry

Posted in Cutting costs | No Comments »