7 Things That Teenagers Need to Know to Become Rich

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

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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.

Use compound interest

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Preparation is when savings and/or your dividend revenue generates additional income. In other words, aggregation is a place for income to generate income. Middle compounding really allows wealth to rise exponentially! The younger you, the more time you have to work together.

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Starting initial investment

This is the stage where Zisa insisted the most. That is a drive to write his book. The faster you start investing your money, the longer you need to allow the benefits of combining to generate capital in the long run. Consider this: If you start spending $ 3,000 per year at an average growth rate of 6% at the age of 25, you are around $ 680,000 at the age of 65. If you are only 35 years old, you are worth $ 260,000. Time has the most important influence on the generation of long -term wealth. Start investing now.

Don’t buy items that you can’t afford to buy

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We live in a world that now needs and wants something. There is nothing wrong with throwing away money, so everything is wrong if you don’t spend it. The money you spend does not contribute to the accumulation of debt which will cause financial disasters.

Use a credit card responsibly

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Credit cards will be a big part of your financial life. Your financial welfare loss can also be a credit card. Many adults have used credit cards to buy unnecessary and reckless items only for extreme debt, which may not be avoided. It is important to note that by using a credit card, you borrow the money you have to pay. Some important items to note about credit cards:

You wear extraordinary high interest rates if you don’t pay the whole balance
Don’t buy goods with credit cards without money you have to pay for it.
Keep in mind the introductory interest rate and the balance of the agreement
Scan mold (very small molds that you don’t want to read) from a credit card.
Pay all balances at the due date
Buy property rather than obligations

Buy goods that make money, not goods that make you owe money! For example, when you invest in shares that pay dividends (part of the company’s profits) every three months, you collect cash for doing nothing. If you buy a mortgage, every six months you collect interest payments. This is called passive advantage.

Conversely, if you buy a kind of loan, you already get the debt that you have to pay with interest. Obviously, loans like that, such as a mortgage, may be asked to buy the first house or even a car loan. But other debt forms will maximize your obligations and hamper the ability to build your wealth.

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Set a budget to save rain days

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The budget is basically projection, usually monthly, from income and expenditure projections for a certain time in the future. You will track how much money you spend for some items and services by setting a schedule.

The vital element of the budget is to create a cash account, known as an emergency fund, every month. Emergency funds are funded that you save to provide cash for unusual incidents in your life. You should have an emergency fund that is equivalent to a living cost of three to six months. You must maintain a safe emergency fund, easily accessible assets such as deposit certificates (CD), money market accounts, or only savings accounts.

Zisa clearly assumes that the journey of financial stability starts earlier. As in all aspects, parents must teach their children to be financially literate through a role model. You will save and save your own children if you live outside of your abilities and learn the behavior needed to live a life that is less tiring and useful.

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