Master money or it will master you: 7 effective ways to manage your moolah

Money cannot solve all the problems in your life, but trust me it takes you a lot closer to the solution.

Written by Siddhartha S | New Delhi | Updated: July 6, 2015 4:07 pm
money-main We were never taught the important subjects of money, relationships, health and happiness. (Source: Thinkstock Images)

“It is almost impossible to master life without understanding the subject of money”

During our formal educational years, we learned a lot of subjects that helped us face the professional challenges in our lives. However, I realised that there were many other important subjects necessary for professional life that we had to learn by trial and error. We were never taught the important subjects of money, relationships, health and happiness.

Did someone teach you money?
We were taught insurance, accounting, and financial management but were never taught directly the subject of money. Money cannot solve all the problems in your life, but trust me it takes you a lot closer to the solution. Even your relationships, health and peace of mind improve once you master the subject of money. I want to share learning from over a decade of professional experience both as an employee and an entrepreneur. Understanding these principles made me a financially secure individual and I so wish that I had learned these principles as part of my formal education. I learned to build systems and create products and then also got the opportunity to successfully exit by selling my stake in few systems I created.

Here are my 7 principles of money mastery for you:

Build products or assets: We all have a career of approximately 40 years, while some prefer to work even post retirement. If you do not build any money producing products or assets during your career, then you will have to trade your time for money. Products and assets are the sources of passive income. You do not need money to create products or assets; you just need to work on ideas. I did not have the resources initially to create assets so I wrote 5 books and they will forever be my sources of passive income. What are your skills and talents which are lying dormant? Can you use your spare time to create something that guarantees you future cash-flows?

investment, investment money, start up, start up investment, start up money, start up budget, business news, economy news, india news You do not need money to create products or assets; you just need to work on ideas.

Build systems: Systems are money-generation machines that are based on other people’s time or other people’s money. Systems create money for you even when you are sleeping. More money it generates, more it can be used to grow the size of the system. This is the only path to financial freedom. The wealthiest people in this world are the people who have built massive business systems or investment vehicles. Money pours in the form of profits and interests. Read as much as possible about successful business models and entrepreneurs who created profitable systems. However remember one thing that the business of business is to be in business. Do not become so emotional about your system that you fail to see its shortcomings.

Active income: While the products, systems and assets get you repeat income, active income comes from how you utilise your daily working hours. You can utilise to maximize your passive income or do the work that satisfies you. Work to learn, earning happens automatically depending upon the way you perform. Always make a profession in the field that fulfills you mentally, emotionally and financially.

indian government, divestment target, stock sale, REC Ltd, REC, REC stock,, Neyveli Lignite, Hindustan Copper, MMTC. While the products, systems and assets get you repeat income, active income comes from how you utilise your daily working hours.

Develop skills that can get you money: Money is a by-product of the value you add to the market place. More skillful you are, more the market will pay you for your skills. Therefore, develop the skills that can be cashed in the market place.

Do not confuse skill with another education degree because education may not always result in skill development. Professional skills like public speaking, coaching, writing, selling, negotiation and networking always help in making more money.

Multiple streams of income: Try to build multiple streams of income in life. If you are in a job, it is not possible to do another job but maybe your investments in the right assets or financial instruments can generate multiple streams of income for you. In a business, it is fairly easy to follow this advice, since there are no organisational mandates. Do not keep all your eggs in one basket. If you have steady cash flows then encourage your spouse to take some calculated risks to build multiple streams of income. Is there anything you can do during weekends or your spare time that can generate some cash flows in your life?

The DIPP shall also obtain inputs through a separate questionnaire from industry with regards to factors enabling ease of doing business in the state. Try to build multiple streams of income in life.

Work life balance: It does not matter whether you make money through a job or a business, the most important is to ensure work-life balance. Try living close to your office so that you do not spend much time in traffic. Make sure you are efficient at your work and do not bring work to home. Ensure your financial success along with great health and happy relationships. Give time to yourself and to people you love. Health, relationships are as important as financial success, so make sure you do not ignore them at any cost.

Always spend less than you earn: Money mastery is not only about how much money you make, it is about how much you keep. Do not buy things you do not need to impress the people you do not like. Do not get caught up in the mad impulsive race of consumerism which is controlled by marketing experts.

Use the principles wisely and take charge of your financial destiny. If you ignore them, you life will continue the way it is going. As they say, if you keep doing what you have done you will get what you have got. So if you wish to change what you have got, you must change what you are doing.

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