It's not about how much money you earn. It's what you do with the money that matters. In this video, I'm going to show you a business strategy on how to manage your money. I'm not gonna tell you what to invest in. That's not my role. Here are the best ideas of what the best professionals do to manage their money.
Introduction to Definition of Money Management:
Money management is the process of expense tracking, investing, budgeting, banking and evaluating taxes of one's money which is also called investment management.
Money management is a strategic technique to make money yield the highest interest-output value for any amount spent. Spending money to satisfy cravings (regardless of whether they can justifiably be included in a budget) is a natural human phenomenon.
The idea of money management techniques has been developed to reduce the amount that individuals, firms, and institutions spend on items which add no significant value to their living standards, long-term portfolios, and assets.
Warren Buffett, in one of his documentaries, admonished prospective investors to embrace his highly esteemed "frugality" ideology. This involves making every financial transaction worth the expense:
- avoid any expense that appeals to vanity or snobbery
- always go for the most cost-effective alternative (establishing small quality-variance benchmarks, if any)
- favor expenditures on interest-bearing items over all others
- establish the expected benefits of every desired expenditure using the canon of plus/minus/nil to the standard of living value system.
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