Hey guys, back at it with another blog and today I would be discussing the importance of Financial literacy and some techniques or methods to become more financially literate. “What’s financial literacy?” Well this can simply be defined as the skills and knowledge that influence you to make wise and informed economic decisions. In layman’s terms it’s the ability to save your money and only use it in appropriate decisions, for example buying an asset or making an investment. This is an aspect of life that all alpha males should master when it comes to taking your life to that next level. You want to have your finances governed as a man so that means you must be aware of exactly where your money goes and how much of it goes, know exactly how much money comes in and manage your investments. This blog would give you a few tips that you can implement to be a little more responsible with the handling of your money. So allow me to present to you 5 IMPORTANT LAWS OF FINANCIAL LITERACY.
1.Never increase expenses when income increases
This definitely had to come in first on this list because this is a common habit that people fall victim to over and over again. Guys, not because you get a pay raise or a spike in your sales means that you have to go out and buy lobster on a Friday night instead of the home cooked dinner you were usually eating. This is a principle that the new rich in society today like Warren Buffet and Jeff Bezos practiced on their road to riches, they understand the concept of limiting expenses. This narrative of increasing expenses when income increases is pointless because you were surviving quite fine on the same budget you had prior to the raise. So why not just maintain that same budget when you receive a raise and cut back yourself a few expenses huh? You would be surprised to see how this saved up money compounds and you would have a bigger fund to go towards something of value like a stock investment or company equipment.
2.Build an investment fund/reserve
One of the biggest mistakes younger individuals make today is not building up an investment fund or any fund in general. You see, the thing is most younger folks today get so caught up in trying to please people and buy all these flashy expensive stuff for validation, that they often neglect building up reserves that can be used for future purposes. Look man, I’m not saying to get into crypto currency and foreign exchange but I am saying to invest in your financial resources and build up a cash pool that you can potentially use in the future. The truth is you don’t want to be that guy who regrets not doing this in the future when there is a new trend or asset that you can invest into to create massive amounts of wealth. It would only benefit you to take a portion of your income and set it aside for investment purposes in the long term. By then you might have a little more wisdom and knowledge to put your money into more profitable investments.
3.Refrain from impulse buying
This is a pro tip that would save my younger folks thousands or even millions of dollars. This is probably the most difficult factor to implement but trust me, you would be thanking yourself in hindsight. Impulse buying is probably one of the most destructive financial habits there are. A concept we talk about a lot on this blog is ‘purpose over pleasure’ and when it comes to financial literacy, this statement is no different. When you make a purchase, it should always be one of purpose, one that would have a positive ROI (return on investment) and one that is beneficial. Notice I didn’t say one that makes you feel happy or feel good, as Alpha males we need to get out of our emotions and trying to please certain feelings. The truth is, that $300 Gucci belt is a purchase that stems from impulse, it makes you feel validated and gratified. That’s not a habit of the new rich, they make very calculated and informed purchases because they understand that money should be used for purpose and not pleasure.
4.Understand the investment before investing into it
Guys sometimes it’s necessary to get off all the social media that pushes “invest in Bitcoin” and “start trading today” because these platforms can influence you to make rash decisions with your money. Remember financial literacy is about valuing your money and the last thing you want to do is put your money somewhere that you have no idea what is going on and how it operates. You instead want to take some time and observe the investment, look at the trends, understand the market and seek knowledge on that particular endeavor before making a financial decision. This is something that all billionaires and multimillionaires understand to the core, Elon Musk would weigh the pros and cons and understand the ins and outs of an investment before proceeding to put money into it. This is one of the traits of a successful entrepreneur, a calculated risk taker. Don’t ever take a chance on an investment without understanding it holistically. Billionaire and investor, Warren Buffet once said “Don’t test the depth of the river with two feet,” and from an investment point of view this couldn’t be closer to the truth. Don’t make any mindless investments.
5.Enjoy your life
This is a point that you would often hear finance gurus and life coaches demonizing and of course, this is with good cause. However we encourage our fellow Alpha males to enjoy the fruits of their labour. Understand that the reason you have implemented all this financial discipline is to enjoy your profits for prolonged periods of time in the future. If you don’t have a reason for all the money you have saved up or profits you accumulated, then you have some issues that goes deeper than just this physical world. As a man what you should aim towards is long term joy and this is a byproduct of discipline, diligence and wisdom. Hence why the prior steps leading to this point emphasized on sacrificing pleasure and reactionary desires. Understand that as an Alpha male you should aim towards having the best life you can possibly have in all aspects. So if your wife wants to visit Dubai for your 10 year anniversary, then visit Dubai for your 10 year anniversary. Don’t let anyone guilt trip you or make you feel shamed for enjoying the fruits of your labor.
And that brings you to the end of this blog. It brings me great joy to see that some of you are reading until the end, it really keeps me going. As usual feel free to leave a comment letting us know how you feel about this and if this benefitted you in any form or fashion. Also share this to a friend or family member who you think can benefit from this piece of information, share the knowledge man don’t be greedy. If you have any questions or concerns feel free to send us an email at [email protected] and we will be more than happy to attend to your concerns. Once again, thank you for reading til the end and have a blessed day. Peace and love!