There is no doubt that the vast majority of very wealthy individuals have inherited their money. Or perhaps were part of a fast-growing, high-tech start-up situation so unusual that it’s unlikely any of us will follow in their footsteps.
However, there are some simple skills that each of us can develop that will take us from low power to high power over the course of our lives. If that’s your perfectly reasonable goal, focus on learning how to do the next thing exceptionally well.
Budgeting
Knowing – and controlling – where your money goes is the first step to financial security and freedom. There are different ways to budget and you may want to experiment with what works for you. The most important thing is to learn the basics and apply them right now.
Budgeting is probably the easiest skill to learn, but not necessarily the easiest to implement, and the one you should start with, especially if you need to pay off debt before you can feel stable and start investing.
It has the added benefit that you can start right away, regardless of your financial situation. You don’t need a lot of money or time to learn to budget, you just need an income to work with.
Invest
Investing is a more complicated skill, but it is entirely possible to start simple and then slowly learn more about the more complex and risky forms of investing. Your options – from super simple to more complicated – include things like:
- Banking products such as interest-bearing accounts
- Pension and savings plans for employees
- CDs
- Bonds
- Index funds
- ETFs
- Stocks
- Property
- Options and futures
- Forex
- Cryptocurrency and other digital assets
- Hedge funds, private equity and other alternative investments
If you have no idea what these things actually mean, then you have a lot of learning to look forward to. Take it step by step and make sure you fully understand each option.
You’ll want to seek professional help before taking any major steps, but you’ll also want to understand the basics before seeking out a financial professional. Otherwise you will have no idea what the options they propose are and you will have to waste a lot of time explaining them.
Environmental design
This is also an easy topic to learn about so that you can avoid the scenarios that cause you to overspend, spend money impulsively, or spend on unnecessary extras. Environmental design simply refers to designing your environment and lifestyle to make it easier for you to achieve your goals.
For example, if healthy eating is your goal, avoid sugary snacks at home and avoid fast food restaurants. If saving money is your goal, you can:
- Automate saving and investing
- Put longer-term savings in accounts that you don’t have easy access to
- Improve and automate your home energy settings so you don’t have to think about them anymore
- Usually leave your credit card at home
- Use a round-up app
- Avoid shopping environments during free time
- Avoid the people in your life with whom you always spend too much money
- Unsubscribe from marketing emails
- Use an ad blocker on all your devices
- Make a vision board of everything you are saving for
Negotiation
This one is crucial. Good negotiation skills can help you get a raise, take a new job with a higher salary, obtain higher rates if you are a freelancer or consultant, buy real estate (and other expensive items) cheaper, and secure loans at a better interest rate.
Many people don’t think about the importance of good negotiation skills until they are needed, and at that point it is often too late. Learn them in advance so that when you get there (from a job interview to a car showroom), you already know the basics of how to walk away with a favorable deal.
There is no need to spend large amounts of time learning these skills. Just an hour, once or twice a week, spent learning money skills can quickly make a positive impact. And you don’t have to do anything too drastic. That hour could consist of listening to a money podcast, watching a video, or reading a book. You can even listen while driving or watch while exercising.
About the author
Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks, and the occasional award-winning short story. Her work has appeared in a range of publications, both online and offline, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn more about Karen
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