10 Basic Financial Principles for Beginner Entrepreneurs!
Principle 1 – Spend less than you earn
The most important principle that you can respect. It does not matter how much you spend, as long as you produce more! If you want to spend more, think about ways to make more money.
Principle 2 – Drop credits!
Credit is, in fact, a violation of the first principle – you do not allow one thing, and yet you buy it. That’s what’s called a real estate credit, it’s called a car leasing or a consumer credit, any form of credit that you get in the long run.
You can rent very well without being tied up for decades. Unfortunately, the novel is very attached to possessions, so it feels much better connected with credit, but with the house in its name, than rent, but financially free and open to opportunities and growth.
A second-hand car, but with the money down, is more “clean” than a new one, which you pay 4-7 years and probably 30-50% more than it does. A new car, the moment you got to the wheel, lost 20-30% of its value. I do not say that I am the adept of the second-hand cars, I just say that instead of giving a 5000 euro advance to a 10 000 car, just to be new, better buy an old one of 5000 euros just to not take credit! Like calculations: a 3-year ford focus (!) Costing 10-12,000 new, you buy it 5-6000 euros after three years. To make the credit for the € 10-12 000, you must advance! If you want the new car you need, let your money down! No one should buy a car that is more expensive than the amount of money it earns for half a year.
Every time you are faced with a credit, weigh heavily on the situation. In 99% of cases you do not need it, it’s an emotional weakness, you get your hands on something before you allow it. The credit itself is at the root of the global economic crisis because it was “sold” to the mass of the avid population. The only thing your credit gives you is the much higher cost on the products you buy. If you do not allow something, then you have two options: not to buy it at all (1), or to produce enough money to allow it (2).
I prefer the second option.
(principle 2 does not include investment credits, just the approach that you have to deal with in general terms, the article is dedicated to beginners, and you have to understand very clearly the difference between spending and investment before getting close to the idea of credit!)
Principle 3 – Focus on how you make money, not how you cut spending
The third principle is very closely related to the first principle. Instead of counting your money to the centime and taking care of where you go, in what direction, spend more money in your pocket and focus on how to increase your income, how to become more productive, how to get more outcomes big to translate into more money. It does not matter how much money you spend, as long as you make more money
Passing all your spending, for example, on a bill of lading – will not help you earn more money. As long as you spend just how much you have in your pocket and account and do not borrow, you can focus on how to become better (so paid) what you do. When you reach excellence (no matter where you work), you can not afford enough money to have financial freedom.
Principle 4 – You do not need OPM to make money, at least not at first
OPM at beginners is very risky, similar to the Russian roulette. To borrow money to make money is at least risky and you need the experience to get out. If you make money without borrowing money, then you can study the principles by which you can make more money with borrowed money. But I advise you to keep an eye out for four, because in 5 cases out of 6, OPM ends very badly. It ends well only for those who are so good at what they do, that they can not be ignored. When the money of others comes to you without you looking for them, because you already have good results, you are very likely to be the one of 6.
If you still need to borrow, do everything as clean and fast as possible. That is – counting as long as you give it back and keep quiet until you get to zero. Only when you are not linked to a debt you can say that you are free!
Principle 5 – Learn what “financial” is all about!
Buy books with the stories of those who have done business, read about how to make money, about the main ways you can get financial freedom. Another reason people get into debt is a lack of financial education. Educate yourself on how to get the most out of your workplace. Becoming better and better on what you do, you become more and more pay.
Ever since I was a student, my mind was constantly fleeing to various business that I could do. When I was working on funding programs, I was almost an expert on everything that meant franchises, for example. I have a word since then: if you go to play billiards with your friends and your mind runs to make money from a billiard room, if you go on the street and you see people who eat donuts and instantly do calculations what it means donkey … then at some point you will make money, because your mind lies only in another.
Principle 6 – Do business from money and passion, not from lack of money and need
Most of the businesses that go bankrupt go bankrupt because they were thought of “lack of money”. When you invest everything you have in a business and you need both loans and other loans (to the left and right) means that you do not allow your business and that you will be ready, slowly but surely. The decisions you take will take you not to the well-being of the business, but to the idea of not starving. It’s like drinking the baby in your baby’s bottle.
If you do business with the money down, you have all the chances to think about the good of your business, not your pocket and the shortcomings that you have. That means surplus creativity and lack of constraints. That’s why, no matter how much money you earn, put aside money for the future investments and business you can now, you do not think.
Most of the time when you feel like doing more if you have more money, remember that it is a victim’s thought. You have exactly as much money as you deserve and can manage. So if you manage the money you have now and you can, with their help, make even more money, you will also have the money to help you make even more money.
Principle 7 – Let the doors open all over where you are going
The world is much smaller than you expected and the professional and business trajectories are very tainted in human life. The character you form will help you earn a lot of money in the future. As long as people remember you like a vertical, open person, with whom they felt good, no matter what the context, then, in the long run, the opportunities will be much higher.
Businesses are made by people with people. Dedicate time to understanding the society in which we live and develop our own networking system that suits you. Any person can be a door to fabulous opportunities. Give increased interest to those who have already succeeded or have an integrated entrepreneurial mindset, and that in the first phase you may not have direct benefits from these relationships.
Having people on the phone who have the same business interest can save you in critical moments when you do not know where to take it, but it can also bring you fabulous benefits from connections you can not make at the moment.
Principle 8 – Enjoy experiences and life
If you like what you do regardless of whether you risk giving it to the bar or that you do not have as much money as you want, then you are on the right track. I have not met an entrepreneur who was unhappy with no money and happy when he started to be successful. Two details are decisive for your future and the financial freedom you want: the enthusiasm in everything you do and the belief that it will be good, in the end. Understand that each stage has a purpose and is trying to learn from everything you do, no matter how black the present would seem in certain situations.
In my experience, there were times when I dreamed of a business, although I had no money to drink coffee in the city, but also when I paid for jobs, for example, sometimes more than I was paying for myself (in some months). The belief that what you do, you do well, and that in the long run will come out is decisive. Entrepreneurship is a mentality that keeps you alive.
Principle 9 – How young are you, risk!
At first, you allow yourself to have strong growth because there are many things to your advantage. Age under 30 is the lack of children to care for, often lack of “maintenance” expenses (if you stay with parents under the same roof). The more you get older, the more constrained you will be and you will not be able to accumulate the experience you miss at first.
Business can make noncost, despite what many people say. Often it only takes passion and an internet domain that does not cost more than 50 euros. A corner in a mall and a t-shirt printer or a natural fruit juicer means clean gold in the evolution of a future entrepreneur, with often minimal investments. At the same time, the longer you age, the harder you will be to return to the “base”, to profit from a business that seems ridiculous. Installing workplace comfort, but also constraining your family, etc.
Also – in the beginning, if you want to start a business with minimal investment, I advise you to look for one in the “services” area. A web design company, for example, often means only a stamp and an intense “sales” activity, because the activity itself can be delegated to freelancers without costing yourself.
The secret is that if you are earning 16-18 years of sales of sneakers, jeans or sunglasses among colleagues, you have all the chances of earning money and later of a far-flung business. The principles are the same! Buy cheap and sell more expensive, as there is demand for the product you sell.
Those who decide to start a business at 40-50, unfortunately, often want to compensate for the lack of experience with more money investing. In most cases, this money is being thrown away.
Principle 10 – When you have, give back
The principle of abundance. If you make more money than you spend, it’s good that some money will be redirected to people who really need money. I do not advise you to give money to those who ask for it (read more: here ), but rather to return from the surplus to society. Stay calm, when you have them, you will find ways to do this and that will give you peace of mind and, often, fulfillment.
These are my ideas for healthy financial evolution. The most important idea I want to stay with is the following:
You have exactly the same money you deserve, the fact that you think about how to get it from other parts than what you are doing to denote that you want to manage money that you do not produce. Focus on what you do and what you do at the level of excellence: it will bring you money and well-being.