Money is a taboo subject. One of the reasons is this: While some people think that money is a servant or a tool, others think it is the master and makes the world go round.
The above are two extreme views and finding a balance between the two is difficult. And thus it is a subject which is not easily discussed within families and friends.
Therefore, before we attempt to find the balance and discuss the principles of money management, it’s important to agree to the following statements:
- Time and money are the two most important resources in our life. Yes No
- To be successful in life, we must be able to have the skills to use these two important resources well. Yes No
- We need focus on the money skills that we need to optimize money in our life. Yes No
- We all have to work for money but money can also work for us! Yes No
If you agree to the above statements, congratulations and you can read further. If you don’t agree, there’s no point in reading any further.
Let us understand how money works. To put money to work, we must understand the three principles of money.
As you go through the upcoming posts, you will realize that money management is simple common sense!
And you will also realize that common sense is not very common!!
The Three Principles of how money works are as under:
- Pay Yourself First
- Use the Power of Compounding
- Use Rupee Cost Averaging