I hope you can teach your children the right etiquette, positive values, and a balanced diet. But can you teach them financial security? Can you really know what to say about money to them?
I have the opportunity to sit new -newest and interview Mike Zisa. He is now a financial consultant and teacher at Pennsbury Middle School at Bucks County, Pennsylvania. Zisa is an initial investor writer: How Teenagers & Young Adults Will Become Rich. We are talking about our community-based children and the value of the scarcity of high school financial education. Lisa shared the most important lessons for all middle school children to remember when they graduated.
Saving money is not the same as spending money.
Saving basically put money in an account such as deposits, checks, or cash at the bank. Cash deposits including short -term CDs can also be entered (deposit certificate). By investing, you can even make money that is very safe and easily accessible. Investing is an act of spending capital to buy securities such as stocks, stocks, property, and other investments that are expected to rise for a longer period of time. Invest your money is the best player in your career.
Compounding is when your savings and/or dividend income generates extra income. In other words, aggregation is where the income generates income. Compounding really lets the wealth rise exponentially! The younger you are, the more time you have to work together.
Start early investment
This is the stage on which Zisa is most adamant. It was his drive to write his book. The quicker you start investing your money, the longer you need to allow the benefits of combining to generate capital over the long term. Consider this: if you begin to spend $3,000 a year at an average growth rate of 6% at age 25, you’re around $680,000 by age 65. If you’re just 35 years of age, you’re worth $260,000. Time has the most important influence on long-term wealth generation. Begin to invest now.
Don’t Buy Stuff That You Can’t Afford
We live in a world that now needs and wants things. There’s nothing wrong with wasting money, so it’s all wrong if you don’t spend it. The money you spend does not contribute to the accumulation of debt that will lead to a financial catastrophe.
Use Credit Cards Responsibly
Credit cards will be a big part of your financial life. The loss of your financial well-being may also be credit cards. Many adults have used credit cards to buy needless and frivolous goods only for extreme debt, which may be unavoidable. It is important to note that by using a credit card, you borrow money that you must repay. A couple of important items to note about a credit card:
- You charge extraordinarily high interest rates if you don’t pay the whole balance
- Don’t buy things with a credit card without the money you have to pay for them.
- Keep in mind introductory interest rates and balancing deals
- Scan the print (the very small print you do not want to read) of the credit card.
- Pay the whole balance by the due date
Purchase Properties Rather Than Obligations
Purchase stuff that makes you money, not stuff that makes you owe money! For example, when you invest in a stock that pays a dividend (a portion of the company’s profits) every three months, you collect cash for not doing anything at all. If you buy a mortgage, every six months you collect interest payments. This is referred to as passive profits. Conversely, if you buy a loan of some kind, you already have accrued debt that you have to pay with interest. Obviously, such loans, such as a mortgage, might be required to buy the first home or even a car loan. But other debt forms will maximize your liability and hamper your wealth-building capability.
Set a Budget to Save a Rainy Day
A budget is essentially a projection, normally monthly, of projected revenue and expenditures for a given time in the future. You will track how much money you spend on some goods and services by setting a schedule. A vital element of the budget is to set up a cash account, known as an emergency fund, every month. An emergency fund is funded you saved to provide cash for an unusual incident in your life. You should preferably have an emergency fund equivalent to living costs of three to six months. You should keep the emergency fund safe, easily accessible assets such as a deposit certificate (CD), a money market account, or just a savings account.
Zisa obviously assumes that the financial stability journey starts early. As in all aspects, parents should teach their children financial literacy through role models. You will save and save your own children if you live beyond your means and learn the behaviors required to live a less exhausting and rewarding life.(*)
