From here to financial happiness
Sam Dogan a financial advisor they say that in the year 2018. He was going to watch soft ball game with his friend Bob on a weekend. There Bob had bought his new Tesla model 3 car which was selling a lot in the market. Bob was doing a lot of show off there that how does this car run on autopilot he was driving his car with his I phone and was saying many interesting things like I heard this in news recently on 9th September a lady gave birth to a baby in Philadelphia in the front seat of Tesla and the delivery happened, when Tesla was running on autopilot because of which that baby is also called as world's first Tesla baby. So Bob was saying such interesting things to everyone. Sam was shocked by listening to all the things. He was shocked because that how did Bob a 31 year old pre school teacher had bought a $53,000 car which is obviously a lot of money. According to Sam it was there biggest financial mistake which he shouldn't have done and at the same time, there was a hype about Tesla after listening to all those things, Sam drove that car one day. He says that the experience of driving this was very different even he liked the Tesla model 3 and even he wanted to buy that car but because this car was very costly to him and as he was a financial advisor, he didn't want to do that mistake. So as a financial advisor what he did was instead of buying this $53,000 car he started calculating it's opportunity cost. Where he saw, if he invest this much money of his savings what can be better opportunity for him than this car then he started doing research about Tesla company or Elon Musk's company he started to realize about this company potential and finally after doing all these things he decided that instead of buying Tesla model 3 of $53,000 will buy the Tesla stocks worth $53,000 in October 2018 on the per share value of $298 bought the Tesla stocks and guess what after some time, these Tesla stocks reached $367 by doing this he had got a profit of $11,000 and he didn't want to sell that and after 6 months, when there were some problem in the company because of a tweet of Elon Musk, the stocks came down to $179 then their profit of 11500$ converted to a loss of $20,000 but still he didn't sell his stock he was still. Now fast forward after 2 years, where the entire world market crashed there Tesla stocks were rising then Sam thought, just like last time, these stock will fall one day then what Sam did was, at $888 per share value sold his 75% stocks because he didn't want to handle the volatility of this market due to which he got a lot of profit. But, the fact was, after some time Tesla stocks reached to $1,126 thinking of which Sam regretted. But as it is said that hindsight is always 20/20 after doing things we feel that we shouldn't have done it, but anyways. Sam had booked a good profit and then he was thinking how stupid Bob is even he should have bought the stocks instead of the cars do you know the interesting part was. Bob whom was thinking is stupid he was investing a lot of his money in Tesla, from a long time. Because of which he had generated a lot of profit look the things we should learn from this story is wealth is not like that as we think it is many time you think people are less capable than you. You think that they are financially behind you. Well many time is not necessary that they are behind you. Many times many people do well financially but since all Thier wealth is in their investment which we can't see, so they look stupid which is not always the case. Being financially free doesn't mean that you have a lot of wealth which is visible to people by which you can live a luxurious life not but the meaning of being financially free is you live a comfortable life where you don't worry about money where your money keeps you safe and work for you. Now Author Jonathan Clemets in Thier book "from here to financial happiness" in this book they share 77 short lessons. I will merge all those points and share with you 4 practical steps which will help you to be financially free.
1_ No savings with debt:
Author says to start your financially freedom journey first you have to do one thing that is clear all your debts clear the loan and this the most basic rule of finance that if you have any kind of debt specially bad debt you can not start your investing journey author says, some people start long term investing with Thier debt where they will be paying there debt and also doing some investment by this process of becoming a financially free, slows down so author says first clear all your small debts like Mobile phone, laptop EMI, car loan and such thing which you can finish early. Plus the author also says, to use credit cards wisely because US department of labor had did a research on 7,900 citizen of age 20 to 40 by that we know that, those who were at high credit card debt Thier stress was affecting Thier physical health overtime by which they faced many problems. You should know how you are using your credit card for not only your mental peace but also physical health many people don't know that by using credit cards the interest starts and it's amount keep increasing and there is a solution related to it, which you will know in 4th point but first remembered that clear all your debt as much as possible after that start your savings journey properly.
2_Financial safety net:
This might have even happened with you something needs repair in your home, like your phone is broken or your T.V is not turning on, on there is a problem in the engine of your car or bike. Like I remember my friend was saying, that the graphic card of his computer was spoilt the price was very high, at that time he did not had money to buy it. So somehow he started working without graphic card. At that time he didn't had credit card and he didn't want to borrow money from someone. He decided that next month when he gets income he will buy the graphic card with that income. Now look, many people are just like this. If there is any problem, for it's solution they use their credit card and depend on it next salary. If something happens they say, they will do it from next month do the EMI many times. But author says no one think what if Thier source of income stop many people are salary based there are many few people who have passive income if thier main source of income dies of any reason job went or anything, even then, they will have a difference source of income on which they can depend on. Now as it was seen during covid time. Where many people lost their job and weer destroyed completely so well that is it's solution, the author says:
" If you want to feel better about finance today, we should spend more time thinking about. How we are gonna pay for tomorrow"
Which mean basically author is saying us here we have to creat an emergency fund. You store your money, At a place where you can use it even after losing you main source of income. You can not spend this money on any random things. Like for vacations, for buying a car or anything here you have to create emergency fund which should be the backup of your main income source because of which, Incase something happens and you lose your job. You will not get a new job untill you can survive and decay and how to do that, well to do that author says that have you calculate your monthly expense. Let's say your monthly expenses is 2000$ you should at least 12000$ safe at side which is you emergency fund.
3_ Invest conservatively and buy stocks with caution to increase your wealth:
J Walk when they launched a website Priceline of discount offer in the early 2000's by this their net worth reached 1.8$ billion in just one year and at the other side the World's greatest investor Warren Buffett they had to wait 55 years to earn their first billion dollars. Look there is how much difference but the thing is J Walk's income was not sustainable everyone knew that this .com bubble burst, by end of October 2000 in just a few months, Out of billion of dollars of J Walk only 33 Million dollars were left and Warren Buffett were in to the top 1% richest club of the world and are still today and for the coming many years, he will be in the top 1% list the reason behind this is, Warren Buffett, is investing from past 7 decades and he had rarely sold his share. So even the author says, if someone wants to be financially free. So to invest your money stock market can be a very good place to you. Where you get not only returns, but the company pay you devidends many times which mean they share some percent of thier profit to their share holders. For Example: you might know that Warren Buffett is a major share holder of CEO of Coca Cola he gets 16 million dollars. So you might have understood where to invest to become financially free author says when you think long term to invest in stock market you don't need to understand any rocket science. But the companies which you know about properly or better use Thier products daily which you are using from many years, which you believe on you like those products it will be good for you to invest in such companies and one of the most successful mutual funds manager Peter Lynns, who had wrote many good books on Investment even he says the same thing you should invest in such companies whose products you use or you know better about them whose products you like and you believe on as many people use I phone eat Maggie, drink Coca Cola use Tesla cars so it can be good for you to invest in such companies.
4_Rugality leads to better finances:
Look our physical health, Mental health and relationship and overall in entire life, habits play the biggest role and this is an universal fact that good habits make good life financial success is nothing but the result of your good habits. If you think logically if you want to be financial free. You have to save money, you have to invest it. But you have very less time. So it is very important for you to invest and save money author says 90% people can't achieve financial freedom because of thier bad habits. Because people don't think exponentially they always think linearly. Example what we think is, I am just eating one pizza, what will buy that with there small things, they make it a habit. So don't keep linear thinking, Keep exponential thinking.
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