Dave Lanci, a best-selling author of financial books in the United States, once shared a survey of more than 10,000 multimillionaires in the United States. One-third of the respondents said that they had never had a household income of more than six figures (US$100,000) in their lifetime. For these multimillionaires, high “primary income” is not the most direct determining factor in their current assets. Having a correct and sound financial management concept is the only way to achieve “wealth freedom” sooner. The following are the financial landmines that experts recommend to avoid.
Financial Landmine 1: Saving without Investing
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Danny believes that cash in an account is basically “worthless”, especially in times of inflation and economic downturn. Some people keep their money in their accounts simply because they are afraid of risks, but are unwilling to explore different investment channels and educate themselves, which results in their assets being lost to people who earn less but are willing to take some risks.
Financial Landmine 2: Relying on buy now, pay later and installment payments
Buy Now, Pay Later (BNPL) and installment payments seem to allow people to enjoy life when they are short of cash. However, over-reliance on them may result in the inability to pay after the deadline, resulting in high interest charges.
Financial Landmine No. 3: Waiting too long to invest
Some people think that the current prices of commodities and stocks are too high and they can wait. However, this desire to predict the correct investment market often proves to be a mistake. For example, some people think that the price of real estate will eventually fall, while others think that virtual currencies will become popular again, and even technology industries such as Google and Microsoft will benefit from AI themes and soar. Danny reminded that the person who can make the correct prediction is often not you or me. The best time to invest is now. If you don’t do this, the money will be spent somewhere else. Workers can consider transferring funds to their investment accounts immediately after the monthly payday, investing in stocks regularly and in fixed amounts, and the remaining money will be allocated according to different projects. Remember, the most important thing about investment is the time in the market rather than the timing of entering the market.
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