You must have read or listened to countless mentorship speeches encouraging you to diversify your source(s) of income and earn more to lead a comfortable life. Even without these speeches, you probably must be dreaming about earning big and having a lot of funds coming to you regularly, and for sure this seems to be the only way out of financial slavery, “the sure way to freedom” …you must say.
With improved information and communication systems, the world has changed significantly and beliefs differ significantly from what they used to be, especially when it comes to lifestyle and the hottest topic of lifestyles – Finance. The race to break through the minimum wage cycle has always been a torrid one. For entrepreneurs, this is even worse as there seems to be more freedom to expand and grow, and as well, more room to fall. The risks involved create a dilemma for entrepreneurs in contrast to ‘salary earners’. You will believe as an entrepreneur that staying stagnant is as good as drifting down the valley.
The pursuit of financial freedom isn’t a race for a select few, everyone who breathes is part of this race. Social media continuously hammer on earning big as a sure route to financial freedom, and to a lesser extent, investing properly.
The normal notion has always been about earning a lot and investing wisely, these two are thought to be the sure route to financial stability. Once you can satisfy both properly, you’re surely on your way to that envious lifestyle. Most of the time, this is true, but as a matter of fact, that’s just 80% of known instances. Which is a whole lot; but, 20% is still a lot.
Unofficial statistics show that at least two out of every ten ‘high earner’ still live in ‘financial slavery’. High earners here encompass everyone earning above the specified minimum wage, this societal hierarchy is expected to at least lead an average life and not run into horrible debt. Due to global financial conditions, running into mild debts could be considered normal.
However, many minimum wage earners still lead an average life, at least on their own level. This is relative to high earners with multiple income sources. What are the struggling high earners missing?
In a simple phrase FINANCIAL MANAGEMENT.
We are so engrossed with the lust to earn more and invest more that we forget the need to have a closer look at things and shape our investments as well as spending habits to suit our resources. Entrepreneurs are more careful about this, but unfortunately, they fall prey most times. And to them, this is another rock to push aside. For someone earning a lot, spending should be easier and also the zeal to invest grows…sometimes.
Investments will always remain a good financial management practice; however, missing out on one word from this will surely result in poor results. The keyword here is ‘Proper’. Proper investments and proper spending differentiate a proper high earner from a ‘financially constrained high earner’.
Earning big, investing poorly, and still falling into horrible debts is a very bad experience and is a common role player in most ‘grace to grass’ stories. The need for sustainability in financial management is usually overlooked… a common mistake.
Looking at the bigger picture, taking a prospective look at the future; an optimistic look as well as a pessimistic look, creating a balance between these two; these make a good planner.
Two skills make one financially free, ‘A good earning skill’ and ‘A good management skill’. Good earning skills ensure that funds are brought to the table regularly and in tangible amounts. According to the financial mentors, working hard and struggling through your limitations puts you well on your way to developing a good earning skill. This is a fact, however, but to be frank, this only makes you a good earner. Which is just one of the two skills required to set you free financially.
The second one is usually ignored, but it plays a very significant role in the strive for financial freedom. How do you spend your earnings? Sometimes buying those stocks isn’t even a clever move, sometimes saving it away isn’t also the best move. A critical look at certain factors that matter to you, considering the future with a little bit of pessimism and optimism, enables one to make good decisions regarding spending, saving, and investing. Being realistic is essential in financial management. Being realistic involves creating a balance between pessimism and optimism.
A decision made by considering only one of this might simply result in making hasty and uninformed decisions which may lead to poor management, frivolous spending, or unnecessary investing.
High earners are expected to have a higher propensity to spend, while the low earners are expected to spend less, normally. The pressure to cut spending or spend wisely hits more on the richer population, but this is not different for the less-earning population. Low earners with good financial management lead a decent financial life. While earning big has been preached as the ultimate way to financial freedom, developing a good financial management skill appeared to be more important.
Your journey towards financial freedom is like driving a car, while a good earning skill drives it, a good financial management skill is like the steering which steers it towards the right direction, a dysfunction in any of them makes your journey riskier or impossible as the case may be. Driving free from financial slavery is the product of a well-managed earning and not only a diversified lucrative earning scheme.
Earn up to $1000 in bonus when you Click Here and Sign Up for a trading account on MEXC exchange.