The Real Risk of Money Management
While we may continue to think that the challenge of Money Management is "How to Generate More Returns", the real pain point is quite different. Money Pain is more to do with our Beliefs and Insecurities. Things like Buying a House because it feels safe can put one in a real soup (moving from liquid to illiquid asset).
Mindless investing for the long term is another issue ( Unavailability of money).
Thinking too much about taxation and missing the larger objective of investing is like buying a BMW and getting overtly concerned about the price of petrol.
Postponing purchases long into the future.
Not understanding the role of Passive Income.
Making Cost of Living a function of Active Income and not total income (ignoring the massive power of passive income).
Falling in love with jobs and fixed salary.
Not understanding the difference between cash flow and owning an asset.
Wanting to get into partnerships instead of hiring a team of professionals.
Having no idea about the power of Valuation Wealth and not knowing how to build the most power source of Wealth.
Unable to position your business to attract the next generation to invest.
Not understanding that money is a medium and life is a function of the kind of Opportunities that we select and those that we we sacrifice for the same investment (cost).
Not understanding that the Cost Curve is Concave and the Revenue Curve is Convex which makes all the difference in understanding Wealth Creation.
Not understanding that Time is the real Wealth of Life.
Not understanding that spending the right amount of money at the right point of time can generate the best returns.
Not understanding the power of Goodwill Wealth.
Not understanding the power of creating Compliant wealth by always following the rules.
By spending less on Insurance
By not understanding when we should raise equity money and when debt money
By not understanding the power of Geographical Independence
By spending 2 crore on foreign education and returning to do a job of 15 lac per annum
By being obsessed with Returns and underestimating the power of cash flow
Unable to calibrate consumption with respect to current and future income - Either we over design our lives by under spending or vice versa
Not trying to understand the dynamics of the stock market and basing decisions based on perceptions
By following trends and others financial journey
By underestimating the power of liquidity and compliance
Disclaimer : This Article is only for information Purpose and should not be treated as Financial Advice.
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