How To Achieve Financial Security
How To Achieve Financial Security
The Ultimate Guide to Building a Rock-Solid Financial Future
Money management is an important skill that we should all master. It's not enough to earn money; it's also necessary to know how to keep it. This is why a combination of humility, fear, and paranoia is needed to ensure long-term financial survival.
While most people prefer to invest in assets that generate wealth while they sleep, it's important to remember that, in the long run, true wealth lies in the ability to maintain the wealth that has been earned. In this article, we will explore the importance of being financially unbreakable and why it should be aspired to achieve.
Humility is one of the most important characteristics to ensure long-term financial survival. Often, when people make money in the market or in a business, they think it's due to their talent or ability.
However, it's important to recognize that there are factors beyond our control that can influence our financial success. For example, a bull market can increase stock prices, resulting in gains for investors regardless of their skill. Humility can also help avoid taking excessive risks, which could result in the loss of wealth.
Fear is another important emotion that should be cultivated to maintain wealth. Many times, people take unnecessary risks due to a lack of fear. While risk is necessary to make money, it's important to ensure that measures are taken to minimize risks. Fear can help avoid making imprudent or risky decisions that could result in the loss of wealth.
Lastly, paranoia is an emotion that can help ensure financial survival. Paranoia is the feeling that something bad could happen at any moment. While paranoia can be harmful in excess, a certain degree of paranoia can help be prepared for the unexpected. For example, maintaining an emergency fund can help ensure that any unforeseen financial events can be handled without having to sell valuable assets at an inopportune time.
For example, you’ve been working and saving hard for 15 years (1995-2010), and when you are going to withdraw all of your money, you realize that the inflation and a crisis have eaten all of your return:
Together, humility, fear, and paranoia can help ensure long-term financial survival. In addition to these psychological factors, there are other measures that can be taken to ensure financial survival. For example, it's important to have a solid financial plan that considers the possibility that things may not go as planned. This may include creating a budget, investing in diverse assets, and forming an emergency fund.
The main reason for being financially unbreakable is to benefit from compound interest. Compound interest is the ability to generate income from already generated income. To achieve this, it's necessary to be able to maintain wealth in the long term. If wealth is lost, the opportunity to take advantage of compound interest is also lost.
Financial security allows you to make riskier decisions.
This is a somewhat paradoxical idea, but it's true.
When you know your finances are in order and you have an emergency fund, you can afford to make riskier decisions in other areas of your life.
For example, if you have a financial cushion and a stable job, you can afford to leave your current job to start your own business, something that can be very risky but also very rewarding.
Or if you have your finances well under control, you can afford to invest in a project that has a higher potential for profits but also carries a higher risk.
Ultimately, financial security gives you greater freedom to make decisions that allow you to grow and improve in other areas of your life.