Know How

Living Financial Freedom

What you should know about money: :

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"Money is the measure by which success on earth is measured.

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Money enables the enjoyment of the most beautiful things in life.

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Those people become rich, who have grasped the simple principles of their earnings.

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Money still obeys the same laws as it did six thousand years ago, when wealthy men crowded the streets of Babylon.".

The richest man of Babylon


 

5 rules for financial independence

These are 5 basic rules to become financially independent in the long run. Follow them and you will be able to build up and multiply your wealth.
Rule # 1) Your earnings must be higher than your expenses

* Create your personal financial plan
* Control your expenses
* Plan in a way you can save up at least 10%
* The difference between income and expenses is called cash flow
Rule # 2) Invest your cash flow in assets rather than liabilities

* Invest disciplined your cash flow month by month
* In my definition, assets are all assets that give provide you with a passive incomen
* Try not to increase your expenses or buy liabilities
* Versuche nicht deine Ausgaben zu erhöhen oder Verbindlichkeiten zu erwerben
* Sooner or later you will manage to build up a passive income of e.g. 100 €
* Now you can invest € 600 instead of € 500 in assets
* The wonderful thing is that it's getting faster and faster from now on
Rule # 3) Protect your investments from losses

* Lass Dich nicht durch höhere Erträge blenden und dabei zu riskieren, dass das Kapital verloren geht
* Do not let yourself be dazzled by higher earnings and do not risk losing your existing capital
* Do not be tempted to gain wealth quickly and thus be deceived
* Entrust your money to those who have experience in having money work for them
* Protect your present and future assets, e.g. with insurances
* Such advice is free and can be worth more than gold as it saves you from losses
Rule # 4) Ensure an income for the future

* Take timely precaution for your needs when you are old and for the protection of your family
* Protect your current income in case you can not continue to work because of illness
* Take precaution to safeguard your family in case of death
* Because an empty wallet, is a tragedy for a man who can no longer earn a living
Rule # 5) Improve your earning potential

The more knowledge we have, the more we can earn
* The one who tries to perfect his profession will be well rewarded
* For self-employed people such as doctors, tax consultants or lawyers, network with each other to share knowledge