And start saving while you are young!
When the rewards are higher than the cost of participating with a decent probability of success are called asymmetric risks/rewards.
Contrary to what we might think, one of the most important characteristics of rich people is that they are risk averse, so they risk asymmetrically. They want to take as little risk as possible, for a reward as great as possible. Wealthy and wise, right?
Are you looking for advice to become rich?
A fearless entrepreneur used to take the necessary risks, and sometimes unwisely. It always takes more time for me than for others when I need to take an entrepreneurial risk, and this didn’t save me from losing, but it has done it of losing badly. I didn’t know about the asymmetrical risk until now, but I am an expert in saving, and allow me to say that; it helps!
In my blog post Wix Website Editor | zitrevyourbetteryou I mentioned my business failure, I didn’t mention how the quarantine affected my plan and investment, but yes I lost a bunch of money even do I had to close I am not broken. My savings saved me! Is important for an entrepreneur to learn about the cost of losing, because if you lose money, you will have less to invest, and you should become resourceful. I shared one personal experience that can help you become resourceful in my blog post Wix Website Editor | zitrevyourbetteryou
Saving is not just about keeping money under the mattress
On my way to becoming wealthy, I became an expert about taking the minimum risk. I must confess that I need to consciously learn about asymmetrical risks/rewards. I said consciously because I was unaware of doing it. I am risk averse, I focus on less risk, even talking about investments. I invested in cryptocurrency; I did something similar with a brokerage portfolio, I Invested in index funds, and I didn’t know that this investing could be categorized as asymmetrical risks/rewards investment. It wasn’t that bad so I will start training myself to try that again.
I operate in numbers, then I don’t dislike jumping into these topics, however, I am not an expert on them. I did it because I am good at saving, which has allowed me to be my main investor and employer. I am an enemy of bank loans or worse, using credit cards as a budget resource. Don’t worry if you don’t like numbers you don’t have to operate in numbers or be an expert to do so, knowing essential math and having a convenient mindset is good enough. However, I do recommend you start a basic relationship with numbers if you want to learn how to feed your piggy bank to start saving.
“Never depend on a single income: Make investments to create a second source” Warren Buffet
I know in America using a credit card or loans is very common. In my country, people pawed their assets to pay off their bills or to invest in their businesses, and they use their credit cards for “emergencies”. What do you think could be an emergency that could request the use of your credit card?
Then certainly, if you don’t have the money for that emergency, you don’t have the money to pay the credit card debt, I dare to say that is important to consider the next point:
If you are thinking of an emergency, eventually you will attract it and with this mindset is not recommendable to ask for a credit card.
Here I share some basics that have worked for me
Having a monthly income, with some calculations previously considered, you can use your credit card benefits without getting into debt.
Make an accurate payment plan and borrow money from your friends and family. Most of them who are willing to lend money won't take the interest you want to pay them; some others will voluntarily cooperate with your cause.
Find a second income source. Even a scholarship, the kind you do not have to pay back can help much more.
“Money is a terrible master but excellent servant” PT Barnum
People believe that having a huge amount of credit on their credit card is equal to having money, and that is a very inconvenient belief because that money belongs to someone else who can become a terrible master.
Yes, you can have many benefits using credit cards, I wrote a tiny book talking about how to use credit cards for your benefit, and I will share a little about it in another blog post because the book is in Spanish. This is kind of embarrassing but, some friends who bought my book said that it wasn’t as good as they thought, because, in the book I am teaching the opposite of what they wanted, they were expecting me to teach how to avoid or how to calculate to pay the little interest as possible. How can I teach that if I do ignore my credit card interest rates? I understand nothing about the parchment paper they ask you to sign as a contract, but that is not the point. The point is to learn how to auto-financial yourself and avoid getting yourself into debt using credit cards.
Allow me to share an experience, I had a business partner who used to tell me; you think too much to take the risk. Yes! I do! I make numbers, and a lot of calculations about the risk, the time to have the investment back, and if it is not back as well. I even calculate how that risk will impact my home expenses.
She was like King Midas. Everything she touched became gold, but she was unable to manage that gold and she was always broken or in debt, which for practical facts is the same. I see now that a remix of us could make the wealthiest woman in all over the globe because I was always focused on the asymmetrical lowest cost/risk, and she was always focused on the asymmetrical greatest rewards.
I probably should be more focused on the asymmetrical rewards, but you can start as early as possible.
Money Mindset
"Do not save what is left, but spend what is left after saving" Warren Buffet
How is your relationship with money? Do you need to have a good “relationship” with money to start saving?
Yes! You do! Our money mindset or relationship with money is super important, as to increases our capacity to be comfortable with money and with more money than the one we feel currently comfortable with. Besides to feel comfortable around wealthy people we need to learn how to feel comfortable talking about money. Who wants to be around someone you don’t feel comfortable with? If you don’t feel comfortable with money, you will find a way to push it far away from you, and most of the time you will do it unconsciously. And this will be directly reflected in your … savings!
How did I start learning about saving?
Believe me, is a quick lesson. When I was around seven years old, my father gave me a piggy bank, and together with it he told me a history of his childhood that I shared in my book with more detail. He lost his father when he was five years old, so he had to become an employee at that age. He earned ten cents every week, then he asked his boss to give him two coins of five cents each, that way he could give her mother five cents to contribute to their home expenses, then he saved 50% and spent the rest of his five cents. Since then, I started doing the same a little more aggressively. Fifty percent of my total income before expenses goes to savings! with the other fifty percent; taxes, business investments, and home expenses. This way your cash flow is always healthy.
Are you willing to start saving your money? To start exploring asymmetrical investments? Or better, to start doing both?
I will share about saving in more detail in another blog post.
In the meantime, you can read more about Entrepreneurial Lifestyle insights on my blog “Zitrev The Alpha Blog” and you can listen to more topics on my podcast “Zitrev Your Pass for a Better You” which is coming soon.
See you in the arena…
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