Some people like the idea of having a lot of money, social media obviously has amplified the need to have more since everyone is now showing the bright side of their life on Instagram. But still, most women just want to achieve a degree of financial freedom and the peace of mind that comes with it.
Whatever your financial goals are as a boss woman, achieving them requires at least some basic financial knowledge.
Unfortunately, this is a problem for many people. Most of us weren’t taught money management basics in school. We were not even taught financial management even on the college level.
All of this is why, according to a recent study, most people can’t pass a basic, five-question financial literacy test.
So if you want to enjoy some measure of financial freedom, and possibly even get rich, here are some simple truths about money, saving and investing that apply to almost everyone.
- Work for yourself
Check out any “richest people” list. What will you find? Aside from a few people who won the genetic lottery and inherited fortunes or have been lucky enough to beat everyone in the organization full of smart people to become a CEO of a fortune 500, the rest are almost all entrepreneurs.
That’s because, in simple terms, when you work for someone else, you will never be paid more than that person or company decides you’re worth. Every next increment is a percentage of your current income which a biased boss usually is deciding.
Start a business, and the only limit to your income is you.
- Keep an eye on the market
Few people can beat the market, and you and I are probably not among them.
Choose a sensible way to allocate your investments. Decide how much risk you can stomach, and how adventurous you want to be, and then step away from your statements. That way you won’t be tempted to try to time the market or to shift into an income fund during a momentary dip. Or to double down on an aggressive growth fund during a momentary spike.
- Spend less, save more
Again, while it’s fun to assume differently, most of us have very little control over the rate of our investment returns. Even if you channel your inner Warren Buffet and spend hours each day analyzing financial data, the difference you’ll be able to make in your investment returns is likely to be small.
But what you can control is how much you save.
Skipping a single parlor appointment would mean saving Rs. 5000-Rs. 10,000 a month, instead of buying 5 branded lawn dresses, buy 2 and from sale! You’ll like the growth happening in your account more than the wardrobe.
Saving more means finding ways to spend less money. And may mean finding ways to make more money.
- Borrow wisely
The key, as in most financial decisions, is to separate wants from needs.
You have to live somewhere, so borrowing money to buy a house makes sense. (As long as you buy wisely and don’t borrow more than you can afford.)
But if you want a boat, and need to borrow money to buy that boat, then satisfying your want may come at a high price. Instead of borrowing so you can finance the boat now, save so you can buy the boat later.
Do that, and you may find that you only thought you wanted whatever you considered financing.
Or you’ll be sure you not only want but can afford.
- Invest in yourself
Want a guaranteed return? Invest in yourself. Improve your skills. Improve your network. Increase your expertise, your talent and your experience.
Invest in becoming a better version of yourself. That will generate better long-term results than any other investment. It’s the one investment with outcomes you can almost totally control.
I love investing in my education, it’s a treat that lasts a lifetime.
Hope you find these suggestions helpful. Do comment to share your own rules and learnings with us. We look forward to learning from your experiences.