Robert Kiyosaki, the author of Rich Dad Poor Dad, brilliantly stated in his book Increase Your Financial IQ, that business, stocks, mutual funds, real estate, not even money itself will make you rich. What will make you rich is knowledge, wisdom, and information and financial intelligence.
The first step to wealth creation is to change your mentality. If you do not wish to keep falling into old habits and making the same mistakes, as regards your financial life, you need to learn about money and the best ways to manage it.
Here are 4 tips that you may want to consider. With these, you can make long-lasting changes that will leave you amazed at how much your wealth begins to grow.
1. Modify your reading habits
Books are food for the mind. To effectively start thinking about money in a new way, you need to read books that can help you do so. Luckily, there are tons of them out there that make for an interesting read. Richest Man in Babylon is one of such books. It presents years of financial wisdom in a simple and fun to read style.
2. Monitor your spending
Ever wonder where the money you accumulated has gone? At times you cannot figure it out.
To avoid this unpleasant experience from repeating, you need to start tracking your spending. This may take some work but it is a habit you need to learn. You can do this by writing down your purchases, credit card and bank statements, or even employ special apps and software that are designed for this purpose.
Once you see how much you spend on food, entertainment, and other items every month, you can find ways to make adjustments and begin to save and invest more.
3. Know your net-worth
It is easy to think that because you are making a lot of money, or at least a reasonable amount, every month you are getting richer. Think again. Even when you are making millions every month, you cannot get richer if you are living exorbitantly.
Warren Buffet, one of the richest people in the world, pointed out in the HBO film – Becoming Warren Buffet – that wealth requires a certain level of discipline.
Your net worth is your assets minus liabilities. Keep track of how your liabilities are changing over time so that you can figure out how much wealth you are reinvesting and how much is going into expenses. There are investment apps and software that you can use to do this as well.
4. Invest in yourself
At times, the greatest investment you can make is in personal development. Enrol in courses or specialised training to learn new skills, increase your capabilities, or gain certification that qualifies you for better employment or investment prospects.
I do hope you find these tips useful. Take pride in your efforts as you begin to make progress now! With the uncertainty in the financial markets and the global economy, it’s more vital than ever to increase your levels of financial intelligence.