5 Best and Simplest Money Lessons I’ve Learned.

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5 Best and Simplest Money Lessons I’ve Learned

Easy reminders to boost your financial success.

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The best lessons I’ve learned about money are less about “what to do” and more about “how to think”—they dramatically upgraded my mindsets about money, investing, wealth, and more.

And although they were remarkably simple, transforming what I believed and how I felt about money ultimately made a huge impact on my journey toward financial freedom.

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If you’re looking for tips on how to pick stocks or lower your taxes, you won’t find them here. Instead, I’ll share some of the greatest lessons I’ve learned that improved my financial security and stability—and I’m confident they can help you too, no matter your situation.

1. Your Financial World Reflects Your Inner World

“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.”

— Ayn Rand

We often think our finances are the result of our job, the economy, taxes, and similar factors.

Yet one of the most crucial lessons I learned was that, almost always, your outside world reflects your inside world—how you feel and what you believe internally is expressed externally.

To transform your financial success, look at your “financial blueprint:” The beliefs you have about money and wealth. More often than not, that is the source of your struggles, nothing else.

For example, maybe you believe you’re not worthy of wealth. So as you make more money, you subconsciously find ways to limit your growth because, deep down, your ego says “no.”

Maybe your family taught you that “money is the root of all evil” and so you spent your life struggling with money, never realizing you subconsciously sabotage your success because you think money is evil.

Maybe you believe the stock market is “gambling” and feel negatively towards it. Then, every time you invest in stocks, your choices fail, you confirm your beliefs, and you repeatedly make the same mistakes because you’re locked in a pattern.

“If you want to change the fruits, you will first have to change the roots. If you want to change the visible, you must first change the invisible.”

― T. Harv Eker

Money is a unique psychologist. , founder of Simpler Trading, shared a brutally truthful nugget of wisdom:

“Ed Seykota from the Market Wizards books said, “Everyone gets exactly what they want from the markets.” For people who are hemorrhaging money, this is a brutal truth to confront. What do you get from losing money? What is the payoff? What is your hidden agenda? This is where you have to kick the ego to the curb, or you’ll never learn the truth. And if you never learn the truth, you’ll keep losing money. Forever financing your own destruction.”
Start inside, and the rest will follow.

2. It’s Not What You Make, It’s What You Keep (And What You’re Worth)

For most of my life, the message I always heard was that salary is key. The more you make, the better. In fact, we often believe that more money will usually solve our financial problems.

But I know of people who have remarkably high salaries and are virtually broke. They earn a lot, but they spend a lot too and live paycheck to paycheck to support their lives. (For many people, the more they make, the more they spent, which is called “lifestyle inflation.”)

That’s why it’s not what you make, it’s what you keep. I’m not saying you can’t enjoy the finer things; I’m saying it’s important to look at your expenses and keep them in check.

There’s another lesson I’ll add: It’s not what you make, but it’s also what you’re worth. It’s critical to know your net worth, which is your assets minus liabilities. Again, some people make a lot of money, but their net worth is actually tiny because they don’t save, don’t own assets, or have a lot of debt.

While everyone else only looks at their salaries, calculate your bottom-line and net worth. As Peter Drucker said, “What gets measured gets managed,” so as you start to track them, you can start to increase them.

3. Make Your Money Work For You

You work hard for the money… right, Donna Summer? But after you earn it, then what? Just put it in a savings account and wait?

“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”

— Robert G. Allen

A better approach is to have your money work hard for you. For example, investing your hard-earned money can unlock new income streams. That way, your money is making more money for you, whether you’re working, sleeping, or on vacation.

If you’re unfamiliar with investing, don’t let your lack of knowledge hold you back from financial freedom. Building your financial IQ is an investment that will pay off for the rest of your life.

“Most people only know one solution: Work hard, save, and borrow. So why would you want to increase your financial intelligence? Because you want to be the kind of person who creates your own luck. You take whatever happens and make it better. Few people realize that luck is created, just as money is. And if you want to be luckier and create money instead of working hard, then your financial intelligence is important. If you are the kind of person who is waiting for the right thing to happen, you might wait for a long time.”

— Robert Kiyosaki, “Rich Dad Poor Dad”

4. Never Try to Time The Market

In mid-2020, there were Medium articles from doomsayers who predicted the stock markets would crash and advised everyone to sell all their equities.

Yet they eventually missed one of the biggest stock market rallies ever.

Yes, sometimes there are warning signals. But moving your money in and out of the market based on when you think it’ll go up or down isn’t a good strategy: Over time, if you skip the best days, you miss massive profits. (Sure, if you skip the worst days, you minimize losses, but many of the best days followed the worst days.)

“Real long term investors know that you can’t time the market. Success is about time IN the market. That means every month, consistently and automatically, you are saving. You are investing.”

—Ramit Sethi, LINK

Even though I’ve been investing since I was 7, I still need this reminder from time to time to prevent me from making poor, short-sighted decisions.

5. You Don’t Need to Recover Money The Same Way You Lose It

Back when I lived in the US and did long-term trips abroad, people always asked me, “What are you going do with your condo?” To them, I was “wasting money” by paying rent for an empty home so they suggested I find a sublet, do Airbnb, or try other things I didn’t care for.

But there was a lesson from Tim Ferriss in The 4-Hour Workweek that changed how I viewed this:

“You don’t have to recoup losses the same way you lose them. I own a home in San Jose but moved almost 12 months ago. It’s been empty since, and I’m paying a large mortgage each month. The best part? I don’t care. But this wasn’t always the case. For many months, I felt demoralized as others pressured me to rent it, emphasizing how I was just flushing money away otherwise. Then I realized: You don’t have to make money back the same way you lose it. If you lose $1,000 at the blackjack table, should you try and recoup it there? Of course not. I don’t want to deal with renters, even with a property management company. The solution: Leave the house alone, use it on occasion, and just create incoming revenue elsewhere that would cover the cost of the mortgage through consulting, publishing, etc.”

While Tim’s example is extreme—I would never leave my home empty for 12 months—don’t miss the larger lesson: There are plenty of ways to recoup your money.

Ultimately, this belief gives me more peace of mind to handle the ebbs and flows of entrepreneurship, the economy, life, and more. I no longer found myself worrying about every little “loss.” After all, if your stock portfolio drops, do you need to regain it all back via stocks?

Not really. (And if you try, you might force yourself into bad trades.)

There are opportunities all around us, and I encourage you to adopt an “abundance mentality” toward money, not a “scarcity mentality.”

And since how you feel inside it is reflected outside, don’t be surprised if your new mentality boosts your financial success over time.

CONTRIBUTED BY Anthony J. Yeung

Read More: 16 Hobbies that Will bring you Money

Read More: Golden Rules of Becoming a Millionaire

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