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The Four Principles of Finance



The key elements you need in your life to always be profitable and never worry about money.


Money

We live in a society surrounded by worries related to money. How can I make money fast and efficiently? What is the highest-paid job? Top ten millionaires. These are questions often searched on google by us trying to find ways to make money. Worrying too much makes us think that the answer is a well-hidden secret; we must produce the most clever and unique idea to see it. What if the answer we are looking for has been given to us already, but we are too distracted to notice? Worrying about money has made us forget what it is and what its four leading principles are. How can we chase something that does not know and understand?

Finance is surrounded by four basic elements that help us attract, value, and invest our money. These four elements give us a deep understanding of how to structure our financial strategies and how to take all types of opportunities and advantages. These four elements are needed in our lives regardless of our jobs, age, and societal role. Take these four elements and apply them in your life. It does not matter if you are a university student with a part-time job or a CEO in New York; these elements are essential for each and can be applied to any lifestyle.


The principles

Principle number one, Income, refers to money from the exchange of work and is the first principle of Finance. Even though making money sounds easy, it hides some challenges, like maintaining and growing it. That is where the second principle comes in handy. Saving. This is a principle that helps us understand the importance of budgeting. Some tips for saving money are planning and setting some long-term saving goals. You will often hear the 80/20 rule. Spend 80% of your income and save 20%. For someone to be able to start saving part of their income, what they need to be aware of is their costs.


Principle number three refers to spending. Spending money in a capitalistic society like ours seems like a fun game. Give me one day in central London, and I can spend enormous amounts of money on things I do not need. However, there is no need to panic about spending money. There are many ways you can make smart choices and spend your money wisely. Seek opportunities such as sales and loyalty cards, and give yourself time to understand if what you are about to buy is worth it. It is okay to spoil yourself but make sure you do the right thing. In the same ways students worry about these, it is an everyday worry for any firm. However, as said before, the same principles apply there.


Companies try to maximize their income by attracting customers and saving money by minimizing their spending. Okay, but if you followed all these three principles? What comes next? Investing is the final principle. Investing is about ''giving life'' to what you have earned by setting your money on a specific project and expecting an overall increase in your after-all income. To be a good investor, you need a vision, the ability to identify profitable activities, and confidence in taking risks. These principles take more time and have some risks. However, building experience can lead to a high increase in income. Do not be afraid to see your wallet tempting. With suitable investments, your wallet will thank you.


Remember


These four principles are here to help you. With understanding and following their guidance, you can make the most out of it and live a life where money will not be a constant worry but a well-understood tool. Remember making money is not about creating the most successful and unique business and competing with Zef Bezos but understanding the basic elements and using them in your dance in any work path you wish to follow.

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