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5 Clever Financial Hacks That Will Make You Rich

As you know, the earlier you begin planning towards your personal finance the better your results. The same analogy goes for investing. The sooner you start investing the better you will yield returns great enough to make you rich.

 

 

 

Try these 5 PERSONAL FINANCE HACKS to make you richer:

 

 

 

1. Invest and save

 

Investing your savings as soon as you have it will help you get there much faster. The major challenge here is deciding how to invest your money without losing it all. 

 

Make your money work for you and see great potential returns with passive income and get closer and closer to financial freedom. 

 

Some Clever ways to invest your money are in the one of the common and profitable areas which is index funds. Index funds are best for you if they are easy to buy and if they are passively managed with lower fees than actively managed funds. You should make sure they generate not only higher investment returns for you but are also well-diversified. 

 

 

 

With Index funds, make sure you state with the type of investment that you need for your portfolio and examine the hidden print and its potential returns. You should also determine if an index mutual fund or an exchange-traded fund (ETF) is best for you.

 

 

 

Another way to invest your money is with an exchange traded fund (ETF). These are regular investment funds that are traded on stock exchanges.  

 

 

 

The other clever way to invest your money is real estate. Understand some more tips about real estate and skyrocket your income.

 

If you don’t have great credit, work with a mortgage broker who might be able to find some alternatives to the conventional loans offered by banks.

 

 

 

 

2. Set and categorize a budget

 

Regardless of your desire to become rich through finance hacks, setting and categorizing a budget will be necessary. Categorize all your purchases and expense into categories like utilities, entertainment, person expenditures, shopping, groceries, and gifts.

 

THere are many categorize you can use but you will have to look into your monthly expenses and determine what can be categorized. When recording your expenses, just focus on the last 3 months of your bank statements.

 

 

 

3. Avoid debt

 

There are many types of debt that you can run into and may need to watch out for. One of the most common forms of debt is your mortgage. Mortgage is related to your home purchase. There are some mortgages with low interest rates, and with interests that are higher. Having a mortgage does seem to be a good way to leverage your money as buying a house in cash could be very hard for most of us. 

 

 

 

You can run into debt with your mortgage if you are not able to afford payments on your home. This unfortunate situation is another reason why your budget will be extremely important. Evaluating your budget might help you see that you are unable to keep up with payments and may need to move into a more affordable home with fewer bedrooms, less bathrooms, and in some case, less bathrooms.

 

 

 

Your student loan can also be a massive burden that you may to watch out for. This is a loan that you might accumulate if you have taken many courses or studied either out of your state or abroad. 

 

 

 

If you are not too adamant on where you want to study, you can focus on getting your education in the state your are in. Doing this can really help you budget better and ultimately avoid this form of debt.

 

 

 

Business loans are the other major cause of debt. This form of loan can also be tied with credit cards. These forms can cause you debt that you did not budget for. Instead of spending from a fund you do not actually own. Spend less than you earn.

 

 

 

Some extra forms include car loan, and credit card and you can learn more about them to become financially prepared.

 

 

 

4. Set some goals

 

 You can start setting goals by imagining the results you want to see, what you want to accomplish. Before you set a goal, take a closer look at what you're trying to achieve and ask some questions. What do I want to achieve? How much do I want to be making in a month? How much do I want to make in a year? What kind of things do I want to spend on -- holidays, budding a house? Will I have enough money if I leave my job? Will I still be able to live sustainably with my family? 

 

After you are done asking yourself those questions, Re-evaluate and assess your progress.

 

Find real purpose and a strong motivation in having both big and small goals, and short-term and long-term goals. It will help you track your progress and give you something to obtain and eventually get you thinking about personal finance and getting richer.

 

 

5. Know your net worth

 

Calculate your net worth by using the notorious Assets – Liabilities formula. Pile up all your assets, gather up your liabilities and expenses, and subtract. The difference will produce your net worth. That is how much you truly are worth.

 

You assets could include things you are making money from like cash in bank accounts, Investments from it, index funds, and dividend paying stocks. Other assets include your side hustle and passive income, and your personal home value as it still appreciates.

 

All your liabilities are mainly your loans. These could be business loans, mortgages, student loan, car loan, and even credit cards. Credit cards are still considered liabilities because they are a form of loan; a large sum of money given to you without you presently have the funds available in your bank account. 

 

Knowing your net worth will give you an idea of your personal financial position and your current standings. There are tools to help you easily track your net worth and manage personal investments (your assets), and plan for retirement, which all help you become richer. Some help you track your net worth after you create an account and manage your entire financial life in one place.

 

 

 

Those were the (5 actually) genius financial hacks that you can pursue right now to empower your future, become debt-free, and become rich and financially free. Remember budgeting and goal-setting is at the forefront of these steps and will lead you to making better personal finance decisions both as you invest and save money in meaningful areas. 

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