The global pandemic caused the financial crisis take place on a large scale. These days, people understand more deeply the importance of financial management.

In fact, having the ability to make money doesn't mean you can keep your assets and make assets increase rapidly.

If you don't know how to manage money, then no matter how much money you make, one day you will be out of pocket. So how to manage finances wisely?

Table of Contents

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1. Understand assets and liabilities
2. If you have a small capital, let’s invest in your professional skills first
3. Don't invest all your eggs in the basket
4. Use the leverage mindset to invest in yourself

The global pandemic caused the financial crisis take place on a large scale. These days, people understand more deeply the importance of financial management.

In fact, having the ability to make money doesn't mean you can keep your assets and make assets increase rapidly.

If you don't know how to manage money, then no matter how much money you make, one day you will be out of pocket. So how to manage finances wisely?

HOW TO MANAGE FINANCES WISELY?

1. Understand assets and liabilities

When your salary is still on the bank account, the choice to spend or manage money will determine a person's financial situation in the future.

How to manage finances wisely? / ph: pexels

Those who prefer to spend first will often be out of pocket at the end of the month. Because they work for many years but do not know how to accumulate.

In contrast, those who know how to control desires, delay satisfaction, use money to invest and then use the income generated by old assets to use is person who are good at financial management.

It is often said that before learning how to manage finances, it is best to understand about assets and liabilities first.

Assets are things that can give us money in the present, and give us profits in the future as savings, invested real estates, stocks, funds,...

Liabilities are things that make you spend money as consumable things, car loans, mortgages, etc.

Learn to distinguish between your own reasonable and unnecessary needs, then spend wisely.

2. If you have a small capital, let’s invest in your professional skills first

Many people often learn from Buffett's investment secrets, but few people know his most important investment view.

When being asked about the most important investment view, Buffett's answer was: "Myself!"

When your investment capital is not much, instead of following the crowd, be patient to take the time to upgrade your own knowledge and skills.

If you pay close attention you will see that, for most people in the workplace, especially those with a small capital, investing in yourself will be the most effective and cost-effective approach.

3. Don't invest all your eggs in the basket

Those who dare to take risks and not hesitate to face them, often become good investors. Simply because they have a high tolerance.

There is no financial product which the returns are exceptionally high but the risks are extremely low. This is a common law.

If someone tells you how high his financial returns are without telling the truth about the risks to be paid, then don't cooperate with them.

Learn to walk slowly but surely, divide the capital into many small parts, learn to "put eggs in many baskets".

Thus, when taking risks, you will have ability to overpass difficulties.

4. Use the leverage mindset to invest in yourself

In the workplace there are two main types of people:

The first people type will get their goals based on their abilities and resources. The second people will think how to find resources and integrate resources to get their goals done. This is the leverage mindset.

Everyone understands that working hard does not guarantee success, but if you don't try, you will only fail.

The leverage mindset has great influence, even if there is the loss then It's not a big deal.