Personal Finance Basics for Entrepreneurs.

Ramit Sethi, a best-selling author that teaches students and up and coming entrepreneurs the basics of managing their finances effectively. His core principles focus on a system of frugality that puts into perspective the maximisation of funds and resources for using the money in a creative entrepreneurial engagement.

Three Things That Impose The Limit Where Money Can Buy You Happiness

Happiness is subjective. When you achieve something, you are happy. Opportunity provides room for achievement. Meanwhile, contentment is when you finally find something that would provide you ultimate happiness for a very long time. However, money isn’t always a bad guy, but it also isn’t always a good guy. Money can’t buy happiness, or at least there are limits.

1.    Financial Stability is Crucial to Contentment

To be content, all your resources must circulate and address all the issues you currently have in your life. Once you have your health and life insurance ready, and your retirement fund is capable of supporting you until the day you pass away, you could be happy. However, this is just half of it; to achieve maximum happiness, it is important to fulfil the things you want out of your life.

2.    Money Buys Stress

Inevitably, more money means more headaches for you. Not that it is a bad thing. Money is a reflection of your success and achievement as a person. It comes with your added responsibilities and jobs. However, more responsibilities and jobs also means stress. When there’s stress, there’s no happiness to be found. This is where a passion project could change your viewpoint about stress.

3.    Hedonism at its Finest

To say that money is the ultimate source of happiness is subscribing to hedonism, where deriving pleasure is the meaning of life. Meanwhile, if one is satisfied with hedonism, then one shouldn’t worry about finding contentment. Those who seek more challenges will find no emotional sanctuary with money as they would choose to be more than what materiality money perceives them to be.

Three Reasons Why You Should Never Go With Equity

Why is it that when you borrow money from your bank you feel some sort of guilt when you look at your wallet or your ATM card? Why is this feeling not the same when you just signed a contract with your bank stating the equity you are giving them for your home in exchange of financing? These two should invoke similar emotion because they both cost you in the same manner. However, equity pushes the border a bit more, surprisingly.

1.    Debt is Less Expensive

When you take on debt, you are fighting against interest rates and payment deadlines. When you couldn’t pay, the banks would shun you or give you high interest deals unless you clear your name in the register and improve your credit rating. If you take on equity instead, you’re giving up part of your property forever. With debt, the banks have nothing on you.

2.    Paying Interest Lowers Tax Burden

Most Britons take a loan or mortgage instead of securing their loans with their vehicles because it helps lower their tax burden. This is why most homebuyers re-mortgage their home every five years. When you pay more to interest rates, these amounts are tax-deductible.

3.    Improve Discipline

It’s a different matter when you’re spending money with a credit card. Shop now, pay later, most would say. But when you spend actual money coming from your bank, which you have to pay regularly, you develop the discipline necessary to handle even a credit card properly

Avoid Easy Investment Return Offers Like Instant Diet Pills

I have heard so many stories from my neighbours and friends regarding people offering to help you increase your investment by telling you they have a new method of riding the financial “trends.” Truthfully, these financial trends do exist, but the trouble is that most of these guys just want you to pay them up front and they can scam your money away from you.

Ponzi schemes begin by motivating you to invest time and effort and avoid procrastinating to get the lifestyle and earnings you deserve. Many fall prey to the sweet-talking dealer without considering that most pyramid schemes have you offer an initial amount that would give you some returns, but never really the full payment that was promised to you.

People offer these easy get-rich-quick schemes because many people in the world dream about their life when they get rich, but there are no avenues to ensure that their investment will get them somewhere.

For one, getting rich does not involve talking to a person offering an impossible solution. Second, check with a financial adviser regarding the probability of such a result being possible in the plan the salesperson had offered you.

I’ve heard one such story from a Multi-Level Marketing friend of mine. She said that the marketing managers focused on getting recruits instead of focusing on the product’s capabilities and advantages for the consumer. In the end, with just a few people left to sell to, the company just disappeared with all their income.

This is what a pyramid scam is. This is how one should be aware that get-rich-quick schemes are nothing opposed to proper financial education, saving and understanding how interest rates and even loans can help you get rich.