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Our people are firmly convinced that financial problems can be solved only by look for additional income, persistent requests to his superiors about the increase of wages, receiving an unexpected award or win the apartment lottery.

But as soon as a person's income is increased by the desired amount, it will inevitably face disappointment.

Indeed, the problem of money cannot be solved with money, because it is much deeper!

the Paradox is that the increase in income in most cases leads to a proportional increase in costs.

moreover, costs are rising twice as fast through lending, as consumer appetite comes while eating/shopping.

Thus, the increase in income from financial illiterate man inevitably leads to an increase in its expenses, and does not create any Foundation for the emergence of savings and investment. And what is most sad-amazing — money is still sorely lacking!

However, do not despair.

There is a proven algorithm with its "cash flow", the secret of which consists in understanding the problem clearly, setting priorities for solutions:

1) the Lack of money haunts only those who are not able to correctly deal with your finances

This fact was recorded by numerous studies, and life situations most people very clearly and painfully to prove it.

the Positive thing is the fact that to learn money management at any age.

the Most important is the understanding of the problem and desire to change it. As soon as You eliminate the gaps in their "cash" knowledge, you will be improving the financial situation.

2) the Excitement of "consumerism" generates incorrect action

the Concept of "financial Wellness" most people consider synonymous with "material wealth."

  • Why everything you have bought so-called "liabilities": cars, houses, garages and apartments.
  • Very often, while the remaining amount still credit is issued (or even several).

And what is the result?

  1. Material wealth — Yes, with a stretch to say that he is.
  2. But is that the financial prosperity that allows you to be free in their decisions? Alas, no.
  3. Debt loan, the cost of maintaining the vehicle, etc. — all this forces to solve the increasingly complex financial challenges and increasingly badly in need of money.

Although, properly planted of "money" priorities, it would be possible to avoid problems.

Simple and intuitive solution (a way to prevent problems with money) is to buy a "Liability" only after the acquisition of "Assets". By purchasing an Asset that allows you to save and multiply their money, the way is paved for the acquisition and maintenance Liabilities. But not Vice versa!

3) the New "cash flow"

of Course, you can and should decide the question of capacity and its "cash flow."

you can use hundreds of different ways (training, internal moonlighting, moonlighting as a freelancer, using their property as a source of additional income, etc.).

SUMMARY:

  1. Money cannot solve their financial problems, they will only grow and "multiply".
  2. Become financially literate. This will help to correctly monetary priorities in everyday Affairs and begin to steadily increase their Assets/wealth/capital.

ADVANCED:

  1. Read my other article "What skills are needed to become rich".
  2. Read my article "Where NOT to invest? TOP 3 most dangerous for the money."

TO consolidate the MATERIAL VIEW MY ANOTHER VIDEO:

Stuart McPhee