The common understanding of the terminology "rich" is an abundance of valuable resources or material possessions. This definition is taken from Wikipedia.Today I want to emphasize the more thorough understanding of rich in the financial world.
The word "rich" is supposed to mean one that has financially secured throughout his/her life. But, how can it be achieved? Simply understand the Personal Money Cycle and you are good to go!
Personal Utilites
This is the first station where your money would go once you acquire your pay. This station consists of food, gas, and utility bills.
Financial Utilities
This is the second station that consists of your financial liabilities, such as loan interest, car installment, home installment, and many more.
If your money journey ends here, then you are called a Mr./Ms. Right Now. Why so? It is because you are only aware of what you want and need for the time being. If you feel like you're one of these people, keep on reading this post!
Insurance
This is the third station. If you are here, then you have thought of surviving. Good for you! This station consists of life, car, home, and business insurances.
Saving
This is the fourth Station. Old folks understand the philosophy of saving. Should we honor the old folks? We should. There is a general rule that says that we have to save 10-30% of our earnings.
If your money journey ends here, then congratulation because you are now entitled as Mr./Mrs. Right Dad/Mom. This is the track how to be as successful as your mom or dad. This is how your mom and dad made their life in their time. But that is not enough! Today is different from our mom and dad's time back then.
Investment
If you still have some left, this is where your money should go next. Nowadays, investment products are highly accessible. There are bonds, time saving, stocks, foreign currencies, property, commodities, futures, indexes, and many more. Every products have their own risks and gains. I will emphasize each of them later.
If you fulfill all stations, then you are what mother and father in law is looking for. You are the Mr./Mrs. Right One. Be proud of yourself because you are on the right track to become the next rich men/women.
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