Understand the rules of money

Money has its own rules but neither school education nor a textbook will teach you these rules of money. You have to understand and figure them out on your own. And, remember, unless you know the rules of money, your quest for achieving financial freedom may never turn into a reality. If you don’t learn the rules of money and learn to master money, you will always remain its slave - wage slave of the employer, tax slave of the government and loan slave of the bank.

• If money is your problem, money cannot be the solution; simply because the problem itself can’t be its solution. Further, the problem of money is not only its scarcity - even its excess can be a problem.
• Never be a slave to money; be the master of your money. And once you become the master of your money, you will automatically start walking on the path of financial independence.
• Don’t run after money; instead, be a financial magnet which attracts money and ensures that it always sticks around with you.
• Invest time before you invest money. Don’t just aim at being rich without any knowledge or experience about money. Learn how money has been made and lost in this world before you commit your own money.
• Be in control of your money. If you are not in full control of your money while dealing with it - be it in earning, saving, protecting, budgeting, investing, insuring, etc. - then it will control you and you will never be able to achieve financial independence.
• Don’t work for money; rather, let money work for you. Nobody can become really rich and stay wealthy by working for money. If you keep working for money, you would just be doing that throughout your life.
• Understand the flow of money in your financial statements. This is very critical otherwise you will work more, earn less, pay higher amounts of tax, and let your money be eaten away by the monster of inflation, subject your money to wrong investments, buy wasteful capital assets with the help of negative leverage and never achieve financial independence.
• One of the important rules of money is to spend money to get rich. The truly wealthy people know when to handsomely spend on what and when to cut down. By not spending on the right thing at the right time, you might be permanently closing the doors of your house to money.
• Know how much you are actually earning, saving, protecting, budgeting, spending, investing and insuring. By having vague or notional figures, you are just burning away your money and life.
• Remember that good money always drives out bad money. Therefore, you have to learn to distinguish between good and bad money. In simple terms, that which appreciates in value, and / or produces income and cash flow is good money while that which does not produce any income or cash flow and is subject to constant depreciation and loss in value is bad money. If you work hard without knowing the difference between good and bad money, then it might be really difficult for you to achieve financial freedom-you might well work the hardest, yet get paid less and your earnings will be further eaten away by the legal financial predators. Ultimately, the money which you are able to retain would keep losing its value because of inflation.
• Don’t be afraid of money. Instead face it with courage. In the end, it’s not equities, bonds, commodities, or real estate which will help you achieve financial freedom. It’s your knowledge about money which will make you rich and help you always stay wealthy and financially free.
• Money is unfair, so learn its rules in order to use them to your advantage. If you respect money and play the game of money by knowing the rules, you will see a world of abundant money and will make money work for you. That will be the stage when you will not only become rich but stay wealthy throughout and be also able to do charity and leave money for your future generations. You will achieve true financial freedom.
• Create and print your own money. If the government can legally print notes, so, too, can you.
• You must know how to handle the biggest of all drugs - money. Yes, it is a drug, the lack of it or its overdose can cause serious financial and emotional damage. The only way to properly handle the powerful drug of money and not get addicted is by acquiring sound financial knowledge - the understanding of how money functions.

Conclusion

No school or college teaches you about money - after finishing your education bank will not ask you about your mark sheet but rather they want to see your balance sheet before giving you loan. You may be academic smart but in life to survive you need to be financially smart -most poor and middle class work hard for money but rich people do not work for money, instead they send their money to work for them. The rich focus on buying income producing assets like passive income and portfolio income while poor and middle class buy liabilities mistaking them to be assets funded by negative leverage. That is why poor become more poor as they are slaves of money while rich are masters of money - they know the game of money and the rules of money. Don’t forget that money is the only thing which is in available in abundance and in unlimited quantity in this world. The rich recognize the fact that money is just an idea, they can print their own money legally as they pay themselves first via budget surplus and they make their as well as other people’s money work harder for them. In this fast changing information age, the rules of money have changed from old industrial age -you do not need a retirement plan in this modern information age as you have to aim to be financial free from day one.

The excerpts are from Commandment 10 of his just released book “10 Commandments for Financial Freedom” He writes blog called intelligentmoney.blogspot.com. He may be reached at mehrabirani10@gmail.com