When it comes to money, there’s a great difference between earning a lot and having a fortune. When you have a fortune, you have acquired an amount so great it won’t be easily gone. There’s a huge difference between earning a lot of money and being rich. One can become rich without necessarily having a high salary; it all depends on your decisions when it comes to money management, investment, and financial abilities in general.
Through this post, we’ll tell you some of the mistakes you must avoid (or at least, make an effort so they don’t happen) in order to become successful economically, in other words, rich. Have you committed one of these mistakes?
Having only one source of income
We are not telling you to get multiple jobs. However, if your current job is your only source of money, then there’s the possibility something isn’t right. What will happen to you if you happen to lose your job for whatever reason? In fact, most rich people do not depend on just one source of income. It is a bit difficult to manage finances during times like these, but you should invest so you can make your money work for you to get extra money. For example, a great way to start is to buy a property and rent it.
Saving without a reason
If you’re going to save money, you must do it for a reason. If not, you’re in the same position as those who tend to spend money recklessly. Also, keep in mind every amount saved without a reason will end up being used for something; it’s just a matter of time. During these cases, an emergency fund should be done, but you should invest your savings in companies you see are going well and will do well in the near future.
Pretending to be rich
There are certain people who spend great amounts of money just for show. They care so much about what people say about them they tend to impulse buy almost anything you can think of, and we aren’t talking about cheap stuff, they always go for the expensive.
Someone who’s rich doesn’t care about what people say about them because what they’re looking for is financial freedom. They have learned to take control of their expenses; therefore, they have amazing financial management, which means when they spend a certain amount in something extremely expensive, like a yacht or a car, it doesn’t affect them very much because their fortune has generated enough income for them to live as they want.
Comparing yourself to others
People work because they need to take care of themselves. There’s something bad between us as a society, we tend to compare ourselves with other people. Whether we want it or not, looking at other people’s bank account is extremely useless, because you’re looking at the money which isn’t your property, either if it’s a great amount or if it’s not. Care only about what you have, and leave other people live peacefully.
There are many other mistakes which people commit every day, and although you may see them as ‘tiny’, they will hurt you in the long-term. Once you learn about what matters when it comes to your finances, you’ll see how things start to change.
The road to financial freedom isn’t easy, but it isn’t impossible to achieve. Perseverance and education are the keywords when it comes to this kind of things. Once you learn to manage your finances properly, you’ll see how close financial freedom is getting.
When it comes to money, there’s a great difference between earning a lot and having a fortune. When you have …
When it comes to loan and credit, many people think they have things sorted out. However, after learning what each one is about, you will have better management when it comes to each one of the cases. We have talked about the differences between credit and loan before, but you should know the main difference between them is the interest rate applied to each one.
This time, we’ll talk about credit. Credit is at your disposition at most times, and you can use it at your convenience. There’s a limit, but you have a certain sum available at any time. However, every purchase made through credit will be paid with a certain percentage of interest. It’s like paying the company for the favour they’ve done to you.
There are certain people who use credit recklessly, either due to anxiety problems or just because purchases are made easier this way. Whether is the case, here we’ve written some tips for credit management for you to consider next time you use it.
1. Learn when is most convenient to use credit
Not every situation is favourable when it comes to credit. We recommend you to use it only during situations where:
• You will acquire benefits of great value, like a car or a house.
• Education is a priority. Whether it’s for you or your children, there are several financial entities which help people with their studies.
• You will invest, for example, to establish your own business. If you plan things properly and everything goes well, you can be sure you’ll be able to pay the credit in little time.
• You can obtain credit at a less interest rate or without it at all.
2. Learn when is not convenient to use credit
Although the previous situation can be seen as favourable, those are the cases where people don’t use credit. Unfortunately, most people use it for the situations we are going to name below. Take into consideration the following list, because credit use isn’t recommended during the following cases:
• Credit should not be used for common purchases, like clothes, foods, gifts, etc. All of these expenses should be made within a budget you currently have available, because they need to be paid at the moment you request them. If you’re using credit for things like these, then you’re probably wasting more money than you’re currently earning.
• Credit cards have the highest interest rate in the market. We don’t recommend you to use it if you want to have great financial management.
• Do NOT use credit to request loans.
3. Credit is great, but bad management will have a negative effect on your finances
Sometimes, we do not have money to pay for certain things, and we end up using, for example, a credit card to complete the purchase. However, unless what you’re buying is strictly necessary, you will be affected in a negative way. As we said above, credit cards have highest interest rate in the market, and although they have a limit, you still have to pay for all the interest which comes with every purchase you make with the use of it. Unlike loan where interest is calculated over the total sum; when you use credit it applies to every purchase you make.
Bad credit management will put in risk your finances, with the possibility of leaving you bankrupt. To avoid this case, you should learn how to take care of your finances properly without having to recur to this method. For example, if you are going to purchase a house, ask a close person first before considering using credit.
When it comes to loan and credit, many people think they have things sorted out. However, after learning what each …
The lockdown has put all of us in a difficult situation. Most people are struggling to get money, and in times like this, anxiety reigns over our minds. Some of the effects of anxiety include being hungrier, and since many of us don’t know how to spend our days, eating seems to be the better option.
Since we’re at lockdown, certain things like electricity and water will be consumed more often. We must take care of everything we are spending because most people are struggling with their jobs. After all, it’s getting difficult to maintain a salary and even their positions due to the current state of society in general.
When it comes to expenses, eating is not the only thing which has become very expensive during the latest months; getting basic things is difficult too.
If you think you have been spending more than you should, we have written this post with the intention of giving you some advice regarding your expenses during the lockdown. Saving money for later purchases is important during times like these, especially because we are not allowed to go out and find ways to earn extra money.
Whatever your case is, you should think of ways which you can save money during the lockdown. Things aren’t easy right now, which is why we have listed some of the ways you can use to have a little bit more of money at the end of the week. Here’s our advice:
Make a list with everything you’re going to buy
One way to save money, not only during the lockdown but also throughout your life, is to make a list with everything you’re going to buy. It will help you to seek exactly what you’re looking for. Organise your priorities, because not everything we often buy is necessary, and we end up spending more money than we should.
Remember to give priority to some necessary stuff, for example, food. There are certain things we buy and aren’t really needed, during those cases, sticking to a list will help our finances in the long-term.
We know the struggle. You see something you like, and if you have the money, you decide to buy it. However, this is something which must be avoided at all costs during the lockdown, because we don’t have a stable income. Therefore, wasting money on unnecessary purchases will hurt us in the short-term. This includes purchasing for snacks. Before going grocery shopping, make sure you have eaten something before. This way, you will avoid buying food impulsively.
Cancel unnecessary subscriptions
During these days, the most important thing is to keep entertained. Many people have been doing their hobbies, but some recur to popular streaming services. However, being in lockdown doesn’t mean you should use all of them. When it comes to movies, series and documentaries, people commonly use Netflix; and when it’s about music, Spotify is essential in almost every device.
We are not telling you to cancel all your subscriptions permanently. You should only keep those which are used frequently to save money.
Search for offers in what you need to buy
After you have made the list for your purchases, it’s not a bad idea to look for offers. Even at times like these, supermarkets have available some cheap products, which means you can save some money.
Overall, the COVID-19 pandemic has affected all of us, without discrimination. We need to take care of our finances because no one knows what will happen tomorrow regarding this situation. It is also important to follow all the guidelines given by the authorities, so a new outbreak can be avoided.
The lockdown has put all of us in a difficult situation. Most people are struggling to get money, and …
We are currently living difficult times. Many people around the world are struggling to get basic things; food, for example. During these days, uncertainty is what reigns in the minds of everyone. The world is currently functioning in a way which can be described as chaotic, but people, somehow, manage to survive.
Although most of the time predictions just stay the way they are, prediction, there are certain ways which we can expect the economy to reorganize once the lockdown is over. However, some time will pass until things go back to normal.
Until then, we can expect the lockdown to be finished slowly. Many countries, including the USA, have made announcements where they say in the following months, phases will start to be established all around the country.
When it comes to the economy, it is difficult to foresee how everything will be going on after quarantine is over, since everything seems to be going downhill in most places. However, there are certain scenarios which we can consider. Like we said before, these are just predictions and are not intended to tell you what will happen in the future, but to give you an idea of what’s the most possible outcome.
First Scenario: A new COVID-19 outbreak
With the current measurements which have been taken, it is very possible for a new outbreak to happen. In the USA, quarantine has been more flexible these past days, but thanks to it, the numbers have been increased like crazy.
However, we can expect the lockdown to be at more ease during June and July, thanks to the recent announcements. As we approach winter, it is possible for a new breakdown to happen, which will force the economy to work just like it is working right now, perhaps, slower.
A new outbreak is possible if people don’t follow the guidelines given by the authorities. We have already seen what has happened to Italy, and most countries are now trying to avoid being put in the same position.
Second Scenario: Expecting the best
If we assume the virus doesn’t attack again as winter approaches, then we can expect the best. According to the latest news, China has been doing great after months of lockdown, even with it being the epicentre of the outbreak. If this happens, we can expect the economy to take its normal course in some months.
However, things won’t go back to the way they were. We can expect the economy to start growing during the last months of 2020, and if everything goes well, in 2021 things will be potentially better, which means things will be closer to the way they were before the virus started to be around.
Third Scenario: Expecting the worst
If things don’t go smoothly as they can go in the previous scenario, the lockdown can be extended until the end of the year, which will result extremely prejudicial to all economies around the world. Things will be like they are right now but may get worse over time. However, after time passes, it is possible for new measurements to be taken, which means economical recovery can be faster during next year’s second trimester. Keep in mind we’ll be facing ourselves against conditions of extreme instability, either socially, economically or politically.
To contribute the world to be as it was before the lockdown started, you can follow the norms and stay at home. This is all we can do for now, and if we do things properly, we can be sure in some months everything will go back to normal.
We are currently living difficult times. Many people around the world are struggling to get basic things; food, for …
Loan and Credit are terms which we are used to seeing. However, most people don’t know the differences between them, despite being in contact with them almost every day. If you have requested a loan and have used credit before, you may be aware of them. Through today’s post, we will tell you the differences between them. Although they are offered by banks, they are different products.
What is a Loan?
A loan is a process where two sides are involved; these are a lender and a borrower. The lender can be either the bank itself or a person, and they give a determined sum of money to the borrower, applying some kind of interest. Among the main characteristics of a loan, we can mention:
The whole amount is provided to the borrower, and interest is calculated over the total sum.
Both sides should arrange the timeframe which the payment must be done, as well as the way it will be done. For example, you can request monthly or biannual payments.
Therefore, a loan is always paid through previously established fees which are accorded by both sides.
Why is interest applied to certain transactions?
Financial entities basically sell money to the public. Let’s say you request a loan to a bank, and you want to pay the total sum in just one payment. While this seems like a good idea, it doesn’t work to this kind of financial processes because the bank will request compensation, which is why interest is applied to loans. For said reason, payments are done through fees in a determined amount of time. To put it easier, you’ll be paying the lender the amount they have lent to you, and the favour which you have requested.
Money has a price. The fact it is used every day for purchases doesn’t take said value out of it. When you request a loan, you can say ‘the price’ of it is the total interest you are paying to the lender.
What is Credit?
When you have credit, it means the bank has put a determined sum to your disposition. When you use it, it must be paid with interest. The main characteristics of credit include:
When you can use credit, a certain amount will be available. It can grow over time.
The money can be used to fit your needs, and the whole amount is not provided.
Interest is not applied to the total sum, but to the amount which is used. While you’re paying for the credit, you can still use it.
Differences Between Loans and Credit
Although both terms are very similar, as you may have noticed, there are certain differences. One thing they have in common is they make the person who requests it to use a certain amount of money they don’t have and pay it in a determined timeframe. Now, let’s see what the differences between loan and credit are:
When you request a loan, the total sum is provided and cannot be changed unless you request a new one.
When you request credit, you have a certain amount of money available for use, and a limit exists. However, the person can use the money which needs to be used anytime. When it comes to credit, payments can be done easier.
Overall, the interest applied to credit is only to the sum which was used. When you request credit, you pay interest calculated over the total sum.
Learning about the different financial terms will help you to have better management of your finances.
Loan and Credit are terms which we are used to seeing. However, most people don’t know the differences between …
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