10 Greatest Personal Finance Lessons That Changed My Life #Finance

I’ve made many personal Finance mistakes in my life to be honest too many to count but through each one I’ve learned some hard-earned lessons so in

today’s CashNews.co I want to share with you 10 of my greatest personal Finance lessons that have essentially changed my life hi if you’re new to the channel my

name is Tay from Financial Taurus where we learn to grow our wealth slow and steady the number one greatest personal Finance lesson that changed my life is that when we buy

things to impress people we actually end up with less money I know as obvious as this sounds I really didn’t learn this lesson until I was well into my adulthood Morgan housel the author of psychology of money said it best in his book spending money to show people how much money you have is

the fastest way to have less money we’re all social beings so it’s not a surprise that we all need social validation the problem is that we often try to do this through things we buy and own and I struggle with this pretty much my whole 20s why did I rent an apartment that ate a 50 my

take-home pay so I could impress my parents when they visited why did I offer to pay for dinner when I could barely afford to eat out on my own so I could impress my friends to make them think I was rich why did I buy a brand new a car at the age of 24 with ridiculous financing so I can impress

random people on the street what is sad is that after all that effort I realized too late that no one really cared my parents didn’t care that I lived in a fancy apartment they were actually worried for me saying that I was overstretching myself my friends were impressed by my willingness to

pay for dinner they were just happy that they got a free meal and the random people on the street they could care less I mean when was the last time we were impressed by some random guy and driving a brand new car on the road if you’re like me you probably were more annoyed than impressed if

you’re going to spend money spend it on things that really add value never spend money to impress anyone because not only does no one care but you end up holding all the bills without anything to show for it the number two greatest personal

style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance lesson that changed my life is that real millionaires are actually Frugal Dave Ramsey one of the most famous American personal #1a73e8; text-decoration: none;">Finance personalities said it best typical millionaire lives in a middle class home drives a two-year-old or older paid for car and buys blue jeans at Walmart Dr Thomas Stanley published a book titled The Millionaire Next Door in 1996 which was based on

his survey of thousands of of actual millionaires in America contrary to what media makes out millionaires to look like wearing expensive clothes watches and other status artifacts in reality most real-like millimeters are actually the opposite while many of them did indeed have high

Income from their lucrative careers or business the key characteristics that led them to becoming a millionaire in the first place was their frugality they learned to live well below their means they wore inexpensive clothes and Suits they most often drove used cars rather than the

current model some even called themselves tight WAD for me this pack was really eye-opening because growing up in an immigrant family I truly believe that real millionaires were lavish Spenders and they spent because they could afford to even my parents thought that as well when we first immigrated

from South Korea to the United States we saw people driving fancy cars living in nice beautiful homes and going on lavish vacations every year though South Korea is a wealthier country today it wasn’t so in the 80s it was still struggling to find this footing in the world so when I saw the

wealth around me I told myself this is what I must do and have become a millionaire one day so I could own all these nice things as well but the reality is that real millionaires became millionaires because they didn’t live like the millionaires we see on TV true wealth is built on the

foundation of frugality not lavish Lifestyle the number three greatest personal Finance lesson that changed my life is that when we have average friends we will have an

average life Jim Rohn the well-known motivational speaker famously said it best we are the average of the five people we spend the most time with most often our friends in our networks are formed by the circumstances we’re born into the neighborhood we grew up in the schools we attended and

the co-workers we work together with it is rare that we go out of our comfort zone to intentionally seek out new relationships that could further our lives most often than not we stay within our comfort zones and just keep hanging out with the people that we know and do what we’ve always done

but what happens if the people that are within our natural circles all have negative life and money habits if all the people that we know in our lives are broke what do you think are the chances that will become financially successful it’s the same with our health and education if the people

that are naturally within our circles are unhealthy and uneducated what are the chances that will miraculously become super fit and highly educated if we want to improve ourselves we have to level up our Network this was one of the biggest changes that my wife and I made when we decided to

radically change our Finances so we didn’t know anyone in the personal text-decoration: none;">Finance space we force ourselves to leave our comfort zone and attend seminars events and Retreats that focus on improving our Finances

to give you one extreme example we even attended a week-long money focused event in England mind you we live in California and we didn’t know anyone at this event but it ended up becoming one of the most life transforming events in our lives and many people we met remain good friends today if

you want to really level up your life and your Finances you have to level up your network and this doesn’t mean you’re abandoning your current friends and network

just push yourself outside of your comfort zone so that you’re improving your average of The Five People You spend the most time with the number four greatest personal none;">Finance lesson that changed my life is that when it comes to finding our perfect spouse we should most definitely marry for money now before you judge me hear me out another characteristics of millionaires Dr Thomas Stanley found in his research was a relationship between

marriage and wealth it is very difficult for a married couple to accumulate wealth if one is a spendthrift a household divided in its Financial orientation is unlikely to accumulate significant wealth and I know this too well with my own marriage both my wife and I didn’t come from money we

both came from working class immigrant families and learned the harsh lessons of money well into our adulthood through mistakes however despite the precarious financial situation we found ourselves in right after our wedding broke with 105 000 student Debt were able to Achieve

Financial Security today because we had each other not only did my wife and I share the philosophy of frugality and long-term perspective we had each other to lean on throughout our financial Journey ongoing money discussions became normal in our household especially when we’re knee-deep in

our dead payday Journey we would often write down and talk about our monthly budget Net Worth financial problems opportunities and future financial goals the great aspect about this was that it also expanded to other aspects of our marriage as well more open and honest marriage so

when it comes to finding your perfect spouse marry for money it will serve you well in the long run the number five greatest personal Finance lesson that changed my life is

that effective investing should actually be quite boring Paul Samuelson the first American Economist to win the Nobel Prize in economic Sciences said it best investing should be more like watching paint try or watching grass grow if you want excitement take 800 and go to Las Vegas the media likes

to make it seem like investing should be fast exciting exhilarating and sadly too many people believe this you don’t need to look forward to see this in play just look at the recent crazier on none;">Cryptocurrency and nfts most people investing in these risky Assets don’t really understand what they’re buying they’re driven by emotion rather than logic they think just because people are making quick money from it it is smart investing but this is

far from the truth the most effective way to invest is also the most boring for example the most effective way to grow well through the Stock Market is to buy low-cost broad market index funds like the vanguard’s total Stock Market index fund also known as

vtsa and to hold it forever it is cheap simple and effective way to invest in the market however compared to exciting Investments like Crypto and nfts it is very boring you

won’t get rich overnight investing Investments like vtsax it’ll take years even decades you’re investing in the Home Market at a low cost and you’re trusting that the compounding will eventually multiply your investment this way of investing is smart but it

requires patience and frankly no emotion we need to disassociate our emotion from our money for this strategy we’re looking at the long-term Trend in the market investing for the long run however if you’re looking to get rich next week or next month you can’t accept this kind of

strategy and you start looking for quick Get Rich Investments which are oftentimes sold to you take advantage of your vulnerable motion thousands of people lost money when the none;">Crypto Market recently crashed they were investing with emotion rather than logic and paid the price for it don’t expect investing to be sexy and exciting smart investing should be as boring as watching paint try and grass grow if you’re getting emotional about your

Investments you’re closer to gambling versus really investing the number six greatest personal Finance lesson that changed my life is is that effective

investing should also be very simple Jack Bogle the founder of Vanguard and the father of index fund said it best when there are multiple solutions to a problem choose the simplest one the media loves to highlight the image of investing as super complicated and risky it throws out fancy jargons

like Alpha Dividends and Capital gains and if you don’t understand it it goes out of your way to make you feel like you’re the dumbest person in the room but it only sounds and feels complicated because the financial industry is working hard to make you

feel that way it is the ultimate Financial marketing machine at work and what happens to many of us is that we get so overwhelmed that we never pull the trigger to investing in the market or we rely on so-called professionals to manage our money for us and this can be detrimental to our wealth the

truth is investing doesn’t have to be complicated you don’t need to understand all the jargons to start reaping the reward of compounding returns I remember when I first started I was so overwhelmed by everything I read and heard about investing that I didn’t know where to start I

was scared of making the wrong move and losing my money what finally got me started was taking baby steps I started by investing in a very simple index fund that tracked the total market and over time I became more comfortable more and more confident and what I learned along the way was that

creating an effective Investment Portfolio doesn’t require a degree in rocket science with just two or three simple funds and no more than maybe 30 minutes a year any one of us can become a Bonafide investor don’t believe the lie that investing is complicated it’s

as easy and simple as picking what to eat for dinner today and the best part is unlike dinner you only have to do this once every few years the number seven greatest personal none;">Finance lesson that changed my life is that effective investing should be for the long run and when we mean long run really long Warren Buffett the stage of Omaha said it best our favorite holding period is forever Warren Buffett doesn’t invest in index funds he finds good

quality companies however Warren Buffett tries to find stocks that are worthy of being held for many years down the line instead of focusing on the short-term opportunities of a stock he considers the fundamentals the company’s ability to innovate in its market and consistently boost his

Profit the lesson here isn’t that we should try to stock pick like Warren Buffett because there’s a reason why there’s only one Warren Buffett rather his philosophy and long-term investing none of the companies purchased or Investments made by

Berkshire Hathaway was ever done with a short-term mindset Warren Buffett and Charlie Munger didn’t choose companies or stocks because they thought the price was going to rise this week this month or even this year they bought and invested in companies because they wanted to own those

businesses for the long term yes they still sell stocks occasionally and for a variety of reasons but their primary approach is still with the mindset of owning them forever for example Berkshire Hathaway has owned Coca-Cola which owns about 10 of the Shares for 34 years American

Express 29 years Costco 22 years now compare that to an average investor who holds a share for five and a half months so when we’re approaching our own investment we should have a long-term mindset that once we buy a specific fund we should plan on holding it essentially forever not trying to

time the market not trying to buy funds for cheap so we can sell them for a hefty Profit quickly there are countless studies that shows that market timing is a Fool’s errant Motley fools defines Market timing most accurately a strategy based on predicting short-term price

changes and Securities which is virtually impossible to do learn from the best and focus on long-term Investments not short term the number eight greatest personal text-decoration: none;">Finance lesson that changed my life is that cash is King Warren Buffett again said best we never want to count on the kindness of strangers in order to meet tomorrow’s obligations when forced to choose I will not trade even a night’s sleep for the

chance of extra Profits strong cash positions are the base Foundation of a strong personal Finance you won’t build a house without a solid foundation

so in the same way we want to have our emergency fund in place before we jump into investing emergency funds are therefore unplanned and unexpected life events losing your job a car repair or a medical emergency without it our grandiose plans to invest will always get derailed something will always

come up that requires the funnel money from our Investments to new emergency because we don’t have a financial cushion Warren Buffett and Charlie Munger have said in their 2014 Berkshire Hathaway annual report that they vowed never to keep less than 20 billion dollars in cash

they never want to be caught in a position where they have a shortage of Liquidity when covid-19 caused a market crash in 2020 Berkshire had 137 billion dollars in cash while everyone also was panicking from uncertainty Warren Buffett and Charlie Munger were making Berkshire

Hathaway even more indestructible in the face of many unknowns and their cash strategy isn’t just so that they can sleep soundly at night even though that is a major reason Berkshire Hathaway holds a lot of cash so when good deals come up Warren Buffett and Charlie Munger could be at the

front of the line to take full advantage during the financial crisis of 2008 Warren Buffett was able to pump five million dollars into Goldman Sachs shortly after Lehman Brothers collapse serving as a massive boost of confidence for Goldman Sachs and helping to stabilize an already shaky Market

however I also netted Buffett a hefty Profit of approximately three billion dollars all because he had the cash to do so the number nine greatest personal none;">Finance lesson that changed my life sounds a bit counterintuitive but that is that we should willingly spend money extremely on the things that we love but with a caveat of course as long as we’re willing to cut that ruthlessly on the things that we don’t we meet

Sethi the self-proclaimed personal Finance Guru and the author of I will teach you to be rich said it best spend it tragically on the things you love and cut costs

mercilessly on the things that you don’t one major purpose of having money is so that we can buy the lifestyle that we want so it really doesn’t make sense when we spend our hard-earned money on things we don’t love just because they’re on sale because every dollar we spend

on frivolous things takes away from our ability to spend money on things we truly care for and love for example I love a good book especially a hardcover book but I could care less what I wear as you can probably tell in all my CashNews.cos I wear the same shirt for all of them so I spend

extravagantly on books but I cut back mercilessly when it comes to anything related to clothes my wife has literally forced me to buy a new pair of socks whenever they have holes in them I say why bother I like the very relation this balance of spending is traveling and the things that you love and

cutting back mercilessly on the things that are important to you is one of the most powerful personal Finance lessons out there it shows that good money management

isn’t actually about just cutting back on everything rather it’s about good prioritization the number 10 greatest personal Finance lesson that changed my life is

actually my favorite lesson and that is that the greatest purchase that money can buy is freedom freedom to work if you want to freedom to spend our day however we see fit and the freedom to completely control our time gel Collins the author of the simple path to well said it best there are many

things money can buy but the most valuable of all is freedom freedom to do what you want and to work from whom you respect and I couldn’t agree more money gives us the freedom to be our own boss the freedom to create something of lasting value and the freedom to live a life that is truly

fulfilling on our own terms and that was the case for my wife and I as well that we haven’t completely reached Financial Independence yet we have a massive enough resource to buy back some of our time and freedom and this Freedom has allowed us to spend more time at home with our kids explore

our other interests such as this YouTube channel and frankly more more brain space to just pontificate about life so if you’re at a crossroad debating how best you should spend your hard-earned money consider buying Freedom it will be the greatest purchase that money can buy thank you guys

for watching if you haven’t learned more about life’s other great Investments please check out my CashNews.co here until next time all the best