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What are some basic financial concepts I should learn now to prepare for managing money in the future?
I want to know the basics and work up from there.
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3 answers
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Flo’s Answer
I love this question, Braden! I’m proud of you for asking about money this early in your life. Financial literacy and cultivating an abundance mindset are great places to start.
If you're a reader, I recommend I Will Teach You to Be Rich by Ramit Sethi. He also has a YouTube channel, a podcast, and a Netflix show called How to Get Rich.
His book is straightforward (without losing its essence) and covers topics like beating the banks, optimizing credit cards, preparing to invest, and practicing conscious spending, to name a few.
I paired the reading with The Psychology of Money by Morgan Housel, which complements the concepts well.
Excited for the wealth you'll create for yourself!
If you're a reader, I recommend I Will Teach You to Be Rich by Ramit Sethi. He also has a YouTube channel, a podcast, and a Netflix show called How to Get Rich.
His book is straightforward (without losing its essence) and covers topics like beating the banks, optimizing credit cards, preparing to invest, and practicing conscious spending, to name a few.
I paired the reading with The Psychology of Money by Morgan Housel, which complements the concepts well.
Excited for the wealth you'll create for yourself!
Updated
Jonathan’s Answer
Great question! The one basic concept that is so important, regardless if your managing your own budget, a family budget, a small business or large corporation is 1) knowing what your income (the money you make), costs (the money you spend), time and energy are and 2) finding ways to grow income, reduce costs, as quickly as possible and with as minimal energy.
When you are young or your business is new - you have a lot of time and energy, you shouldn't have a lot of costs, but you most likely don't have a lot of money. If you have a lot of costs (like debt or expenses), then you want to make sure you manage that debt and reduces your expenses as much as possible. Being in debt can be dangerous if you can't pay it off, but if you manage it right, you can build Credit, which allows you to have more options in the future. Focus on ways to use your time and energy to get as much income as possible.
As you get older or your business gets bigger - use your income and revenue and manage your costs, so that you have as much income coming in, with as little energy and time as possible. Usually developing Passive Income is a great way to do this.
Hope this helps and good luck!
When you are young or your business is new - you have a lot of time and energy, you shouldn't have a lot of costs, but you most likely don't have a lot of money. If you have a lot of costs (like debt or expenses), then you want to make sure you manage that debt and reduces your expenses as much as possible. Being in debt can be dangerous if you can't pay it off, but if you manage it right, you can build Credit, which allows you to have more options in the future. Focus on ways to use your time and energy to get as much income as possible.
As you get older or your business gets bigger - use your income and revenue and manage your costs, so that you have as much income coming in, with as little energy and time as possible. Usually developing Passive Income is a great way to do this.
Hope this helps and good luck!
Updated
Fred’s Answer
Super short answer:
Start saving for retirement TODAY. Put as much as you can into any retirement plan your workplace offers. If they don't offer one, set up your own.
Investing in the market is a LONG TERM process. Some days the market goes up, some it goes down, but over years, it (historically) goes up. So don't check it every day. I check it maybe every 6 months to re-balance my portfolio.
Try not to use bad debt - things like short term (payday) loans and credit card debt. These are usually extremely high interest rates, making it hard to stay ahead. There is such a thing as good debt - home loans and education are (usually) considered good.
NOTE: I am not a financial advisor, so do not take what I say as a definitive answer. These are simply my personal opinions.
Start saving for retirement TODAY. Put as much as you can into any retirement plan your workplace offers. If they don't offer one, set up your own.
Investing in the market is a LONG TERM process. Some days the market goes up, some it goes down, but over years, it (historically) goes up. So don't check it every day. I check it maybe every 6 months to re-balance my portfolio.
Try not to use bad debt - things like short term (payday) loans and credit card debt. These are usually extremely high interest rates, making it hard to stay ahead. There is such a thing as good debt - home loans and education are (usually) considered good.
NOTE: I am not a financial advisor, so do not take what I say as a definitive answer. These are simply my personal opinions.