I’m glad that you are here, I’m excited to have this talk today! The reason why I want to have this chat is because I’ve recently had a bunch of people messaging me. These people were in a peculiar position, a stressful moment of life in which they are stuck. More specifically, they are stuck around money.
They are either in a position where they’ve spent it all and don’t know what to do. Or, they aren’t earning enough and they don’t know what to do. Something connected to finances is causing these people to feel stuck, and so I sat down and wrote ten money tips that could help someone really and truly get this aspect of their life right in a way that they no longer have to think about it if they put the right habits in place.
And so today’s topic is going to be “10 tips on how to master money” and they are just simple tips, but they are things that if you do correctly will put you in a really powerful position so that you don’t have to be constantly worrying or stressing or freaking out about this topic.
1. If You Don’t Value It, It Will Soon Be Gone
This is a really important tip because it is the same tip that we give for business, for love and relationships, and it is the exact same tip that we give for money. The tip is, if you don’t value it, appreciate it or really give it the meaning it deserves, it will soon be gone.
And that’s a problem! If you don’t value money, it will disappear quickly and it doesn’t matter how much you make; it will eventually find its way somewhere else to someone who actually values it.
2. It’s Not How Much You Make, It’s How Much you Keep and What You Do to Multiply It
What does that mean? There are people like Floyd Mayweather, who make a lot of money (he can make more than $100 million per fight!), and what does he do? He goes and spends $120 million the next year and guess how much he is left with? Negative $20 million dollars! So, how much does he really have? Nothing, because he has a bunch of debt. That sucks!
How about Mike Tyson? He is a boxer who made lots of money. He made all that money and let someone else manage it. That person didn’t do a good job of it, and now Tyson is broke! He cannot believe what happened to him.
The perception normally is that if you can make lots of money, you think it’s going to solve the problem. But, the truth is it’s not how much you make but how much you keep. So after all the expenses are paid, after all the bills are covered, how much is left over, and then here’s the big question, what do you do with it, where do you put it to cause it to multiply?
3. Keep 10% of All You Earn
When you think of how much to keep, you want to engrain this little phrase in your mind and it comes from a book called The Richest Man in Babylon, which I highly recommend you go and read. In this book, there is a little phrase which reads “10% of what I make is mine to keep.” Repeat this phrase multiple times until it sinks in.
What does this mean? Its meaning is closely linked to Number 4 below;
4. Pay Yourself First
You are going to have bills, you are going to have rent, food money and all these other expenses that pop up that are normal and natural, and everyone has them to some extent. But, you’ve got to say 10% off the top (what you make) is yours to keep and you are going to pay yourself first. I’m going to take it off the top, and I am going to put it in my bank account and I am going to save it. I will save, and save, and save, and then once it is enough, I’m going to take it and invest it into something so that it multiplies so that money is working for me, instead of me working for money.
5. How Much Time Do You Spend Each Week Studying How to Multiply Your Money?
How much time do you spend researching, looking up, Googling, and reading about new ways to multiply your money? For someone just starting out, I would recommend spending at least one hour every week studying and learning ways you can multiply your money.
If you do one hour a week, you will start to see things that will start to make you good at picking where to put your money in a way that can help you to multiply that money.
6. Compound Interest
This is your biggest friend when it comes to multiplying money. If you took one penny and doubled it 30 times, that one penny would turn into $5.3 million. This is amazing! Doubling a penny 30 times can produce such a huge result.
How do you get that power to work for you when it comes to multiplying your money? How do we get your penny to double 30 times? If you can figure out how to double your penny 30 times, you can have $5.3 million.
What is crazy is that when you double that penny 27 times, it gives you only $671,000. So from 27 times to 30 times, it goes from $671,000 to $5.3 million! You’ve got to remember that the biggest growth happens towards the end of the curve, and that’s very important. You’ve got to remember that in the beginning, the growth isn’t anything exciting, but towards the end the growth becomes explosive.
So, you have to make sure that when you invest, you think in that approach to realize that the biggest, steepest part will be towards the end of the curve instead of at the beginning.
7. Avoid Getting Advice on Money from People Who Struggle With Money
There are a lot of people out there giving advice on money and yet they live from paycheck to paycheck. They are in debt and struggling to pay their own bills, but they have a lot of stuff to say about money! Don’t take advice from such a person. You can listen to them and put what they say in the category of “What NOT to Do.”
Take advice from people who are killing it, who have figured it out and are getting it right.
8. Save Up 3-6 Months’ Overhead in Cash
Save this money, put it in your bank account and don’t touch it! Leave it. That money will allow you to play the game of life without being stressed, without any worry, without freaking out, or constantly trying to figure out how you are going to get by. That money gives you a cushion that allows you to play full out, have fun and really go for it.
9. Aim at Your Cashflow from Investments Surpassing Your Expenses
When you’ve invested in stocks, when you’ve invested in property or businesses and the cash you receive every month, quarter or yearly; when that money surpasses the amount of money it takes to pay your bills and expenses, then you are now considered to be financially free.
What a good place to aim for! If you want to get there quicker, you need to do Number 10, which is;
10. Keep Your Expenses Variable But Keep Your Income Fixed
What does this mean? Consistent income every month that is locked in and you can even keep growing at a steady pace while on the other side your expenses are variable in that they are not locked in, and you have the ability to bring them down if need be to maintain a good margin on top of what your earnings are.
So, if you want to get financial freedom so that your income exceeds your expenses, then aim for keeping your expenses variable while keeping your earnings fixed.
Those are my 10 tips to get you in the right position to really master your money. In relation to that, I want to ask you, what is your favorite tip that has helped you to master your money? In the comments section, please leave a tip that might help someone else to master their money.
I hope this is useful, have some fun, I’m going to have dinner with my wife, and I will see you all tomorrow for another talk on here!
To Your Success,