Personal Finance: Where do you start?

Hello Everyone!! How are you doing? Hope you all had a great and fruitful day, One more day till the weekend, who else is excited!!

I have not lived for a very long time. Still, over the years, I have heard of "Personal Finance" and always wondered what it was, and as a kid, I thought I could eat it because it sounded like chocolate, lol!

When you are a kid, finances don't matter to your brain because you don't manage or make money. Still, as you grow up, you start learning the benefits of saving and managing your money.

 In high school, I always saved money to buy my favourite manga or drawing equipment, I don't feel guilty, but I wish I had saved a little of it for future use.

This leads us to today's topic, "Personal Finance" First of all, what is "Personal finance"? Most of us already know what it is, but let me explain it in this article.

Based on a Google search, Personal Finance covers the concepts of managing your money, saving, and investing. 

Now let us focus on those three words:

MANAGEMENT

This is the process of decision making, planning, organizing human resources effectively and efficiently to reach a goal.

This is a straightforward definition. Suppose you have ever been on a low budget. In that case, you will really understand that definition because when you have little funds, you will always find a way to manage your money, so you don't waste on things you don't need.

If you miss "Management," you have basically skipped the most important part of personal finance. 

When you don't manage your money well, you won't have anything to save or invest when the time comes. I think after reading this, you should ask yourself this. "Do I Manage My Money Well?"

SAVINGS

This is said to be the process of setting aside a portion of current income for future use.

As you can see in "Future Use", it's true the future is 2 minutes ahead, but the future here could be 5 months or even 5 years. It all depends on when you need it.

I have seen people use 9-year savings to buy expensive cars and houses. I am not saying these are bad things, but we should really think of what we will gain before giving our money away.

But when you look at it, when you buy an expensive car or a car in general

The moment you drive that car out of the garage, it loses its value drastically because it has no gains.

Let me tell you something you may already know, Cars don't grow in value when you think about it. No matter how many cars you buy, they don't increase in value. 

They just stay cooped up in your garage packing dust and wasting your money.

When I talk about savings, I expect you to invest with the money that you saved.

I have seen people become millionaires because they disciplined themselves, saved, and invested in things they "understood".

Now another problem I see people make when they save is this.

"They complete the step of saving, they have a huge amount to invest, invest in crypto because they hear it is "An Easy Money-Making Machine".

They enter into crypto, lose all their money, and blame it all on the person that advertised it to them.

I have studied a lot in my time learning Forex, but one thing I will never forget is this, "No matter how smart you think you are, THE MARKET WILL ALWAYS HUMBLE YOU" lol!!

Even if you are the best trader, it doesn't matter to the market.

Then Imagine someone that has no idea of the market, that will just be a total waste of money, don't you think.

INVESTING

There is no way we can talk about "Saving" without talking about "Investing". 

The two go hand-in-hand, whether if long-term or short-term.

Just as I said before, when you want to invest, always research what you are going into because when you don't understand something, you are more prone to fail.

I think I read this in "The Richest Man In Babylon", this book was a great read. I highly recommend it to everyone.

So the story follows Arkad on his quest to fill his purse. He worked as a tablet carver until he met a client who told him to start saving all his income and invest it into something.

Arkad was overjoyed and started saving from his profits. When it finally came time to invest, he did something that most people do, but he took a different approach.

He goes to the woodcarver to help him buy diamonds, can you imagine? 

He gave all his life savings to a woodcarver to help him buy diamonds, and as expected, the man lost it all and bought counterfeit.

This left Arkad down, but he didn't give up. He saved up the second time and gave it to the weapons maker to buy fine raiment or clothing.

I don't know if he had a problem, but he kept on giving the wrong people because he had no knowledge of how investing works, and this is what I see most people do today.

They enter into something that they have no idea about, just like the Bitcoin craze that happened this year.

Millions of people that didn't know what crypto was entered into it thinking it was QUICK AND EASY MONEY.

While the real investors were removing their money when they knew it had peaked. 

The rest of the population pumped millions into Bitcoin, thinking it would "GO TO THE MOON".

We all know how that story went. Now, millions of people are bankrupt because they invested in something they didn't understand.

I was shocked when a friend of mine asked me what the red lines on the chart meant.

That just shows that people enter anything that brings money, and I don't blame them. "Who doesn't want Money."

But I really encourage people to understand what they are entering before buying the dip because that could really change your life.

Before I go, let me leave you with some books that could help you if you want to increase your financial management skills.

#1: THINK AND GROW RICH by Napoleon Hill

#2: The Richest Man In Babylon by George Samuel Clason

#3: Rich Dad Poor Dad by Robert Kiyosaki

#4: I will teach you to be rich by Ramit Seth

Conclusion

Hehe, that will be all for today. I am sorry if it was a long read. 

Still, I just wanted to convince anyone reading this to take their finances seriously. 

But based on what I have seen on this website, all of you are pretty much intelligent investors. 

It is not easy investing in crypto, but all of you are so good at it that I envy all of you sometimes.

Hope you all enjoyed the article and I will see you tomorrow for the next one!!! Thank you for reading