Businessman and financial realist, Ronnie F. Lee’s latest book, Know Money No Problem 978-1952263583, serves as an intensive and effective guide to wealth acquisition and management. In the book, Lee discusses important principles of money management that can help readers get a head start on their road to financial success, even while facing economic problems. During childhood, he watched his parents make financial mistakes that put a strain on the household by the end of every month. As his father was the sole provider of the family, a single paycheck could hardly support the house. Through these mistakes, Lee learned all he knows about money management today. He worked hard and smart to pull himself out of a financial crisis. So, his own family and children would never have to face financial difficulties in their lives.
In the book, Lee shares tried and effective tips to help readers build up their net worth and make their money work for them. Similarly, Beyond Your Hammock shares four fundamentals of personal finances:
1. Spend Less Than You Make
If your spending far outpaces your income, then you’ll end up in the red, in debt, struggling to dig yourself out of a very unpleasant financial hole.
Bummer, right? The solution to this unhappy outcome: live below your means. It’s that simple.
Know how much money comes into your accounts each month, and manage how much goes out so that you do not spend more than what you earn.
2. Spend Way Less Than You Make (and Save the Rest)
Rule number two requires that you double down on this idea of living within your means. If you want to generate serious wealth and you’re starting from scratch, you need tools to leverage. In this case, tools = your money. More specifically, the most powerful tool at your disposal is your cash flow. And like any tool, you need to know how to wield it if you want an excellent result.
When it comes to your cash flow, focus on making the gap between your income and your expenses as wide as you can without going to extremes and depriving yourself; this isn’t about living a miserly life.
This will provide you with freely-available cash to use each month to increase your net worth either by saving or investing.
3. Earn More Money
This may sound good so far — unless you’re looking at your income, and then tallying up your expenses, and realizing there just isn’t that much left over to use for the purposes of boosting your nest egg.
That’s why you may need to focus on earning more money. Telling people “just spend less!” seems to be the one and only solution the majority of the population of personal finance bloggers and money advice-givers has to offer.
Frankly, I don’t find that very useful. Of course, you need to keep your daily spending in check; of course, you need to build a budget, stick to it, and not blow your money on stupid, superficial purchases that bring you no value.
But money is a tool. It’s meant to be used.
The end-all, be-all answer to all of life’s money problems is not to spend less. You might need to spend better, but using your money in a way that aligns with your values and what you want for your life is not a bad thing.
4. Make Your Money Earn Money
Hey, it’s not just you that should get to work. All the extra money you start earning? Give it a job, too. Invest it.
Building a strong savings habit and adding to cash savings provides a good start — but just like “spending less” isn’t a complete solution, “saving more” isn’t either. If you want to build wealth from scratch, you must invest. You can invest in yourself, in the financial markets, in a business (or businesses), in real estate, and more, but you need to invest in something you believe in.
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