INCREASE YOUR FINANCIAL LITERACY
systematic approach to creating personal wealth

Finances & Investments
Systematic approach to creating personal wealth

Finances & Investments it's such a massive topic, I was trying to make a clear structured plan and almost wrote a book! I definitely need an editor to help me with formating my topics, to separate them into smaller parts for Instagram posts.
Let's begin with 7 steps plan "Systematic approach to creating personal wealth"
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► Today I am starting this module. We gonna learn how to go from a little to a lot in a short period of time.
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► We learn our knowledge from study, but mostly we learn from experience. And experience means losing money. You make money, you succeed and you learn, BUT you learn THE MOST from your FAILURES! There are two parts of succeeding when we talk about money - 1) it's succeeding and 2) is avoiding failures at the same time. I am gonna tell a little bit more about failures and how to avoid them. It's not only about EXCITEMENT of making money (creating wealth), it's also the WISDOM of not losing money.
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► There are certain skills that you need to master, it is a foundation for your wealth. The foundation must be deep. The greater the wealth you want — the deeper your foundation needs to be dug.
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► The foundation of personal finance is how to manage the money you bring into your life - we have never been taught how to deal with it. There is no class or teacher who teaches you how to deal with money right, to get rich. Neither the school nor university gives this knowledge because the teachers are employees and they also have never been taught how to: • get wealthy, • manage income, • control costs, • save and invest, • make money grow and work for you, • create multiple streams of income, and the most important - • protect your wealth and • save in for the next generations, they don't have financial plans for their lives etc.
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► Let's save time and millions wasted on failures (lessons) and learn from those who have already went through this and sharing the knowledge – billionaires, successful entrepreneurs, great investors. Everything I tell based on the knowledge I got from my teachers – W. Buffet, R. Kiyosaki, B. Tracy, R. G. Allen, T. Robbins and my own experience, I share only those things, which worked for me.

► The plan is created in pyramid form and consists of a 7 layers. We gonna start moving from the foundation to the top carefully diving into each step for the next few days to make them more clear. Then we move to the more specific topics and tools which would help you to increase your Financial IQ. This are very important basics we need to go through.

Personal Finances

We will explore the PYRAMID from the foundation to the top, so we are starting with a "Personal Finances" part.
Let's begin:
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1. CHANGE THE ATTITUDE TO MONEY.
– Value every single coin!
► Most people don't value money, they loose it they spend it and they don't calculate the ultimate value of that single penny, if you loose it its just a penny, its not a big deal. if yous spend it to the clothes the value goes down, if you carefully invest it this penny can turn into enormous amount of money.
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– The tiniest investment has massive growth, 20% = 100 billions!
►This is what made Warren Buffett a billionaire and the richest investor in the world! He took that 20% and he was very careful with his money, so 1 US dollar has that much power if you are careful with it. We talk more about compound interest later.
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– Don't be careless with money, appreciate it!
► If your parents gave you a 1$ everyday since you was born until you reach 66 (y.o.) how much would you have in your bank account with 0% interest? It's 2.400.000, if 5% = 20.000.000, if 10% = 275.000.000, 15% = 5.000.000.000 (take a look to the picture on the left)

– When you destroy the seeds, you lose the whole forest of money trees.
► It's a fundamental rule. How many of you have heard about compound interest before? 99% may know everything I just said, but only 1% actually really does it. And I'm here telling all this to make you the 1%, make sure you become a part of that 1%. Whenever you waste your money (buy a car, buy a house, clothes, travel, party etc), CALCULATE the REAL cost of your mistakes, calculate how much money it can turn into in 2, 5, 10 years, if you were passively, regularly and carefully investing it in a long period of time.
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❓ If you got what I was saying you probably have a big question in your head: "Where to find those pretty 20%?" Be patient, we will come to it as soon as we build a strong foundation for your wealth!

Personal Finances

We are moving to the layer 2 and 3 of the #AnnaTorresPyramid.
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2. CONTROL COSTS.
Number two is learning how to control the money that flows into your life.
⠀– Different family members may have different skills.
► Someone could be great at earning/making money, another – good at saving and investing. Find out your strongest skills and improve them, delegate the skills you think you are not great at, to those who you trust (wife/husband, children, a partner etc.)
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– For poor mindset people cost optimization means "to say NO to the things they want". For rich mindset people cost optimization means "to say NO to pay MORE for the things they want".
► First thing rich people do to optimize cost is 1. they look for the same thing, but cheaper (making a research, comparing the market prices, looking for the promotions, discounts etc.), second thing they do (if they didn't succeed at the first – 2. buying a cheaper analogue, and only then, if none of the offers satisfied them – 3. they delay the purchase for another time, plan the budget OR cancel the deal at all. What poor people do – is opposite (read it in reverse order from 3 to 1)
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3. LEARN TO SAVE.⠀
– Poor people save to increase expenses. Rich people save to increase savings (capital which will be invested later).
► Hope its clear - poor people waste the money they saved on something to something EXTRA. Rich people keep what they saved.

– Never spend more than you earn! Don't play catch up!
► If you make some fast money don't try to go to the luxury ladder. Don't buy things that go down in value, what do you wanna leave after yourself for the next generation? An old watch, a used car or a FINANCIAL FREEDOM?
► Delay gratification by 10 years, wait for 10 years, see how it goes, if you are 10 times richer from now then GO - buy yourself a nice car! Investing into that car NOW is stealing from your FUTURE. Don't hurry to look rich!
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If this was useful, please share with somebody who also needs this, thank you!

Investments (4,5)

There are another 2 levels of pyramid. Today we move to investment layers. There are active and passive investors.
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⚖️ Being passive investor is more profitable for a long term than active.
Long term investments, discipline and time make you a successful investor.
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► Financial freedom is only available if you spend LESS than you earn - there is no other way.

► There are two big mistakes while investing (both passively and actively) - FEAR and GREEDINESS, and you need to decide for yourself what's more important to you, desire to make more money or fear to lose money.

► IF YOU DON'T INVEST YOU'LL NEVER get a capital and get passive income and when you get retired you'll make yourself to live for fixed income from pension fund. Take a look to the scheme I just made for you. It perfectly describes how important is it to invest.

► Let's move to the simple calculations, here is an easy, but very important task:
How much do you need to make passive income per month? This simple planning would help you to create you passive income stream:
if your goal is to make 300.000 (whatever value) per month passively - you need (if you invested for 5% per year) 72.000.000. It's just 5% of non compound interest. The least possible option.
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► The main rule is to diversify your portfolio. I have prepared an example of well balanced portfolio of successful billionaire.

Protection & Preservation

Last two layers! We gonna finish our pyramid module and move further into finances and investments topics. Let's learn how to protect your assets and keep your wealth for generations!
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6. Protecting your assets.
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The 6th skill of is to protect your assets by the way in which you legally organize your wealth from people who try to steal it.
You also need to take care of an emergency case, if you are investing, all your data (passwords, accounts, wallets, emails etc.) has to be secure and protected. There should be an inheritor, the person you trust, so all assets will be saved and stay in a good hands.

► The 7th skill. Learn to GIVE money ultimately!

The great billionaires of the world, they work hard to build the business and then they create the massive wealth with multiple streams of income. As soon as you create a great wealth you usually need to start think about other people.
They start to GIVE ultimately, Mark Zuckerberg is a good example, he is giving away 99% of his Facebook shares, he is a massive giver.
► Philanthropy, kindness, humanity, charity - this are the skills all of us need to master.
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📚 The book I recommend you to read to dive deeper into this topic:
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James Hughes - "Family wealth";
► Family Wealth is not just about keeping money in the family. It is also a guidebook that helps families successfully manage their human and intellectual capital. By showing family members how they can make sound financial decisions with love and forethought, Hughes presents practical ways they can benefit others beyond their own lifetime.

INCREASE YOUR FINANCIAL LITERACYsystematic approach to creating personal wealth

INCREASE YOUR FINANCIAL LITERACY
systematic approach to creating personal wealth