Category: Financial IQ

Financial Attitudes, Financial IQ, Understanding Money

Why Nine-tenths of Enterprises Fail

by Enes Öner1 Comment on Why Nine-tenths of Enterprises Fail

“The beginning is the most important part of the work.”

Plato

All business owners and even employees should think big and make plans for expansion. In order to start a job, a strong reason, in other words a source of motivation, is required. This part requires thinking big, and unfortunately most people fail at this step.

Ray Kroc, unlike most people, was able to think big and realize his plans. He got into the hamburger business. But if he had chosen another business, he would probably have done well there too. Many small business owners tend to keep their business small. Ray Kroc developed a system for his small business, then expanded his hamburger business into a huge company.

The triangle below is the one that Robert T. Kiyosaki often emphasizes in his books. The purpose of this triangle is to help focus thoughts and teach the eight main topics that will make a business successful.

Statistics show that, nine out of ten businesses fail in the first five years. Nine-tenths of businesses that can continue for more than five years end before they see the tenth year. Here is the 90/10 rule of money again.

Many business ventures fail because at least one of the eight sections in Kiyosaki’s triangle is weak or lacking in these ventures.

A Business Needs A Very Strong Mission to Be Successful

In the triangle, the “product” is uppermost; but it has the smallest area. The “mission” is at the bottom but is one of the three items with the largest area. Mission is at the base of the triangle. Undoubtedly, the most important item in this triangle is mission.

I’ve heard a lot of people who want to be entrepreneurs say, “I have a great idea.” These great ideas sometimes have a chance to come true. The world is full of great products that have failed. This is because the base of the triangle is not strong. When you ask those who want to be entrepreneurs about their mission, most of them answer you: “I’ll make money!” If the focus is on making money rather than enterprise, the result is likely to be disappointing.

Mission is the most important thing to the business. Mission is the soul and heart of a business. The lack of Mission, means the lack of power to tackle tough road to tread.

When the most successful businesses studied, you’ll see a well-based and solid triangle. Their mission is motivating, leadership is well executed, managers are competent and work in harmony, cash flow and finances are good, sales and marketing communication are effectively provided, the system established for employees works efficiently, legal documents and contracts are clear and understandable, and of course the product produced – as a result of all of them – very good.

The System Is a Major Difference Between Small Businesses and Big Businesses or Companies

Most of us can make more delicious burgers than McDonald’s burgers. But how many of us can build a better system? The system is a crucial difference between small businesses and big businesses. In small businesses, the owner of the business is the system itself. Things don’t work out in his absence. Many businesses operate in this way depending on people.

Big businesses and companies operate on their well-designed systems. Employees or leaders can change over time. However, thanks to the system, the same process continues. McDonald’s works the same all over the world.

When businesses with well-educated, high-salary, hardworking employees who still achieve little are analyzed, it is seen that these businesses depend on people. A system has not been developed for these enterprises. Even a business with well-educated and highly paid employees will fail unless there are well-functioning systems.Entrepreneurs are the people who have to build great racing cars. CEOs are the pilots of those cars. A great pilot can’t win a race with a bad car. There are very few people who produce racing cars and become their drivers at the same time. Bill Gates, Michael Dell and Steve Jobs are such people. We’ve seen these guys all building and driving excellent racing cars.

You may also read my THE DIFFERENCE BETWEEN YOUR WORK AND YOUR BUSINESS post if you are interested.

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Financial IQ, investment, motivation

You are the Person to Take Control of Your Investments

by Enes Öner1 Comment on You are the Person to Take Control of Your Investments

Rich people use much more leverage than poor people. If you want to get rich, you need leverage. If you really want to get rich, you need a lot of leverage.

We mentioned about leverage before. Now let’s talk about another thing we need to achieve a better economic situation, control power.

People who earn are careful about their thoughts. They don’t think they can’t. They don’t say “This is too risky.”. They don’t back down by saying “I cannot afford this.” Instead, they ask “How can I do this?” or “How can I reduce my risk?” or “How can I afford this?” People who invest to earn money are also extremely careful when choosing people for financial advice. Just as Olympic athletes should be careful when choosing foods that go into their bodies, investors who invest to earn must be careful with advice that will enter their minds. This process may sometimes involve cleansing your mind from old thoughts.

Control Power

Investors who invest to earn want control as well as leverage. People think investing is risky because they have no control.

Think of a car. A car with steering wheel, brake, accelerator, gear and engine. Just imagine if you could drive without any of these. If you got into a car without a steering wheel, could you drive that car?

Many people think investing is risky because they lack control. Imagine investing in mutual funds, stocks, bonds or savings accounts without any knowledge. When you invest in these tools without being able to answer the questions of what will happen next, how they will be traded, or how they will be affected by price volatility, you have almost no control over them.

Interestingly, most of the people who invest are not trained in this field. Driving a car requires at least a driver’s license to show that the driver has been trained and can drive a car.

The lack of control of uninformed and inexperienced investment advisors, financial planners and stockbrokers also makes things worse. For this reason, they make recommendations “Diversify, diversify, diversify”. Diversification is something you will need when you are out of control. Warren Buffett doesn’t diversify because he’s investing in a controlled manner. It buys either all or most of the shares of a business.

Lack of Control

Most people feel powerless because they have no control over their work. I know many people who lost their jobs not because they were bad employees, but because their companies were sold. More and more people feel like they are losing control, as there are many jobs shifting overseas these days. It is difficult to feel safe when you have little control over your job and salary and invest in assets over which you have no control, such as blind investments in savings accounts, stocks, bonds and mutual funds.

There are three reasons people find it risky to invest.

– They have very little financial education.

– They invest in investment instruments over which they cannot control.

-They get investment advice from salespeople and these salespeople have no control over the investment.

Once you understand the use of leverage, your next task is to make sure you have control.

Control is all about education. The more financially educated we are, the sooner we distinguish between advantageous and unfavorable situations. It is also much easier to sort out the bad ones among the good ideas.

Life is full of risks. We don’t have full control – at least not as much control as we think we have. But by getting educated, making reasonable choices, and having a positive attitude, we can reduce risk. Many people have achieved magnificent successes, even when “fortune is not on their side.” They have won because they have decided to take control of their destiny and refuse to give up.

One of the ways to gain control is to always have the big picture in your mind. When people talk about the big picture, I usually think of a tapestry. If you look from behind an extremely beautiful and invaluable tapestry, all you will see will be many knots. Sometimes it’s all that people can see, because they haven’t seen the completed design on the other side yet.

One of the ways to gain control is to always have the big picture in your mind. When people talk about the big picture, I usually think of a tapestry. If you look from the back at an extremely beautiful and invaluable tapestry, you will only see many tiny knots. Sometimes it’s all that people can see, because they haven’t seen the completed design on the other side yet.

Someone once told me that there are many knots in his life that he could not untie. I quickly realized that his problem was simply that he wasn’t visualizing his own tapestry. He was quite relieved when I told him about it.

Look at the situations from the other side. It will help you gain control and gain insight into how to deal with problems and people. At the very least, you have to be able to control what is going on around you as much as you don’t get stuck with your life being full of knots.

You may not have control over many things, but you can start with yourself. The real leverage is brain power. Winners accept responsibility and retain control.

Review your life today. Can you choose how you spend your day, or are you told how you should spend your day? Do you direct your financial investments or do you leave this business to someone else?

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Financial Attitudes, Financial IQ

Why Financial Security Is More Important Than The Employment Security

by Enes ÖnerLeave a Comment on Why Financial Security Is More Important Than The Employment Security

Take Risk

Low risk high return investments can be made. All you have to do is learn how to do it. Remember, when it comes to investing, knowledge always eliminates risk. Learning is not difficult at all. It is no different from learning to ride a bike. You may fall at the beginning, but after a while learning not to fall, investing becomes as natural as walking.

People who haven’t achieved their financial freedom are more likely to avoid financial risk. It is always better to learn to manage risk rather than avoid risk.

Risk takers change the world. You can see very few people getting rich without risk. Many choose to depend on the state to avoid the risks of life. At the beginning of the Information Age, the phenomenon of benevolent state has come to an end. We know that. The Benevolent state was costing dearly. Unfortunately, millions of people around the world will be in a very difficult financial situation as they depend on “their rights” and lifetime bonuses. The greatest requirement of the Information Age is that everyone is self-sufficient.

The idea of “work hard and find yourself a solid, secure job” is from the Industrial Age. We no longer live in that age. Times are changing. However, people insist on not changing their minds as rapidly. They still think they deserve something. They believe investment is not their business. They expect the state, companies, unions or their families to take care of them on their retirement days. I wish they were right.

If you have already achieved your financial freedom, I will just say “Congratulations!”. Please help others to follow your path. If they need guidance, do not hesitate to help. Guide, but let them find their own way. Because there are many ways to financial freedom.

Whatever you decide, please keep this in mind: Financial freedom may be free, but it is not cheap. Freedom has a price, it’s worth it if you ask me. The trick is that financial freedom requires neither money nor good education. It doesn’t have to be risky either. The cost of financial freedom is measured by dreams, will, and the ability to overcome obstacles along the way. So are you ready to pay this price?

Assurance or Freedom?

• Go to school, get good grades, then find a solid, secure job.

• Go to school, get good grades, then start your own business.

If all people in the world were given these two options, the results could have been halved. However, people have become so used to the system that they do not know what they want. Even if they know, they don’t have the motivation to bring it to life. After all, many unknowingly find themselves applying the first option.

The reason millions of people seek assurance is actually what they’ve been taught at home and at school.

Most of us are instilled with employment security, not financial security, at an early age. In addition, since we are taught little about money, both at home and at school, what could be more natural than clinging to the idea of employment security?

If you look at people who are poor and have not achieved their financial freedom, you will see that they have opted for employment security. If you turn your head and look in the opposite direction, the rich and the people who have fully secured their financial freedom, you will see that they act with freedom.

Falling into the Debt Trap

The reason why most of the population chooses the first option and works without financial freedom is because of what they learned in school. They get into debt shortly after they finish school. This is such a deep debt that they cling to employment security even more tightly in order to pay their bills.

There are many young people who graduated from university with their diplomas and education loan debt. When they see that the amount of debt is between $ 50,000 and $ 150,000, they get depressed. If the parents covered the tuition expenses, then the parents may have to pay a loan.

An article I read recently wrote that most Americans had credit cards when they were students and would be in debt for the rest of their lives. This is because they took part in a scenario that became famous in the Industrial Age. Here is the scenario:

The boy goes to school, graduates, gets a job, and soon has money to spend. Now he can rent an apartment, buy a TV, new furniture, new clothes and of course a car. One day, this hero meets someone special, they fall in love with each other, and after a while they get married. Life goes easier with a double income. By putting a few dollars aside, they plan to own their own homes as all young people dream of. One day, they find that house, withdraw the money they have saved in their savings accounts, deposit the house down payment, and go under mortgage debt. Well, the new house needs new items, and they enter the furniture store that advertises in talismanic words, saying “Furniture in installments with no down payment”.

Everything is great, they throw a party to show off their new home, new cars, new stuff and new toys. After that, they will live in debt until the end of their lives. Then their first child is born.

Every morning, this ordinary, well-educated, hard-working couple leaves their children at kindergarten, making their way to the company where they work intensely. Now, employment security has become even more important for them.

Do you still insist on choosing the first option?

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You Need to Know These to Get Rich

by Enes Öner2 Comments on You Need to Know These to Get Rich

We don’t always like the rules. But it would be in our best interest to know them. To get rich, we first need some information. We must know the rules, laws and restrictions. No matter how talented we are, we cannot be a perfect captain if we don’t know the rules that apply at sea. The world is full of people who try to be the great captain even though they don’t know the rules of the sea. Talent alone is not enough; we also need information and education.

There is something we all value: Our loved ones. Suppose your family’s well-being is at stake. What do you do? You do your best to keep your family ship from getting water. I don’t want to cause fear, but your ship can start taking water at any moment. The financial security of all of us is at stake. Just because something is fine today does not mean it will continue like this tomorrow.

In order to protect ourselves financially, our need for financial education is increasing. Education gives us vision. If we have a vision, we can identify economic problems and turn them into opportunities. We need to get outside of our comfort zone and learn some finance.

Someone said: “I could see the world clearly before ads came into our lives.” This person complained that advertisements, propagandas, and politicians influenced and manipulated his thoughts. He said that the experts who came up to clarify some issues actually blurred our opinion. In such an age, we must learn to think critically. We should aim to obtain accurate information while also learning finance.

Just as we cannot learn how to swim from textbooks, we cannot learn to manage our money simply by reading. Besides theory, practice is also required. We must learn from both reading and experience in order to financially secure our future.

We need Financial IQ in order to map the sea of economy nationally and internationally, to make the rest of our journey well and to make the right decisions at the helm. Improving our Financial IQ takes patience and effort. However, anyone who wants to live in prosperity needs to improve their Financial IQ.

“The mind that opens up to a new idea never returns to its original size.”

Einstein

A captain should know also history as well as geography. We can learn very important lessons from history. Learning why ancient civilizations and empires disappeared can contribute to our existence. Do you know how many years the Ottoman Empire ruled? So how and why is it collapsed? Knowledge is power and helps us to survive.

What would you like to remember if you suddenly thought today was a thing of the past?

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Financial IQ, motivation

A Motivation Post for Those Who Want to Get Rich

by Enes Öner2 Comments on A Motivation Post for Those Who Want to Get Rich

Everyone has financial problems. If you want to get rich, you have to solve problems. Identifying the problem creates the opportunity to reach a solution.

Each generation has and will have a unique set of financial problems. The challenges faced by my generation of parents were the global economic crisis and the oil shock. Their solution to these problems was going to school, finding a safe and good job, retiring at the age of 65, and spending the rest of their lives watching sports. For the vast majority of my parents’ generation, getting a good education and getting a good job was enough to survive financially.

Our generation is faced with a different set of financial problems. A good university education and a good job are not enough today. Exporting jobs overseas also makes the problem even more intricate.

The next generation, Generation Z, will have different financial problems that it will have to deal with. If our generation fails to clear the mess that the generation before ourselves left us, the complexity that the generation Z has to deal with will be much greater. Generation Z will have to deal not only with their own financial problems, but also with the problems they inherited or even inherited to their parents.

The growing scale of this problem, currently worth trillions of dollars, is daunting. Simply handing this problem over to the next generation will only make the problem bigger and more complex. As financial problems become bigger and more complex, the financial IQ we will need to solve them has to be higher. We will need all of our brainpower to solve this problem.

My suggestion to you is to overcome the storms in today’s financial world with proper financial education and planning. Find ways to solve problems and get richer with this training.

One thing we should all bear in mind is that a little effort is the best substitute for excuses. If we all make some effort to understand what is happening around us; If we can think with a superior, caring mentality, a more enlightened and correct way of thinking will emerge. While defining intelligence, problem solving skills are mentioned. This is possible with education. Just as there is no understanding, there is hate, if there is no education, there is fear.

Ignorance may be easier, but it often comes out of fear. Reduce your fears and trigger your courage.

This is an amazing power of energy if you have the determination to move forward quickly. And when you focus on the right thing, your chances of success are very high. I have always liked this statement of Alexander Graham Bell: “Concentrate all your thoughts upon the work at hand. The sun’s rays do not burn until brought to a focus.”. If you can control your energy then you will have a good opportunity to create and control your own level of wealth.

Problem solving will also become a lot easier if you think they are a challenge. Problems are part of life. It is inevitable that a positive approach to problems will give you more energy. Trust is a big step on the road to courage, and fear will evaporate when confronted with confidence.

At the beginning of the post I said that a problem can create an opportunity. If you start seeing your problems from such a perspective, I can also assure you that you will be on the way to solving them.

Like everyone else, I know that problems can be complex and sometimes seem like never ending. However, I would like to encourage you to see them as an opportunity to challenge you to great success. Just remember that reaching nothingness is easy… But who wants to reach nothingness? You can achieve great things with your financial intelligence.

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The Biggest Financial Problem In The World Economy

by Enes Öner3 Comments on The Biggest Financial Problem In The World Economy

There are many definitions of intelligence. To me, the most practical definition is as follows: “Intelligence is the ability to solve problems.” If you can solve math problems at school, you are considered smart. Outside of school, if you can fix a car, it is assumed that you have automotive intelligence. When it comes to money, it is thought that the more you can solve bigger financial problems, the higher your financial intelligence is.

Today, the world is facing a number of serious financial problems. Many of these are linked, while some are independent problems. Some of the most urgent problems are:

  1. The fall in the value of the dollar
  2. Increase in national borrowings
  3. The exponential increase in personal debts
  4. Increase in oil prices
  5. The widening gap between the rich and the rest
  6. Salary drops
  7. Export of jobs and workers
  8. Melting of savings
  9. And the most important of all is the lack of financial education

The questions that need to be answered urgently are as follows:

  • What can we do?
  • What are the solutions?
  • Is our Financial IQ high enough to solve these problems?
  • How can we avoid being the victim of these problems?
  • How can we protect our families and loved ones suffering from these problems?

Many of today’s financial problems still exist because they were not resolved when they emerged. Unfortunately, instead of raising the Financial IQ of the population, people were taught to wait for the state to solve their personal financial problems.

“We need to look after those who can’t take care of themselves.” you might say. I agree with this. As a civilized society, we must care for the needy. However, many people may be able to take care of themselves if they are trained. For this, the Financial IQ of the societies should be increased.

Due to the low financial IQ solutions found in the past, the demographic structure of today is the impoverishment of the people except the rich; even though more people earn more money. Unfortunately, the United States is not the only country moving in this direction. Many of the world’s economies are transforming into two-class societies: The rich and the poor… The upper class or the masses…

Simply put, the world is on its way to becoming a well-educated place of rich and poor people. The middle class is endangered. The real problem is that the world is beginning to consist of people who are good people, well-educated, hardworking, but still expect the state to take care of them when they retire.

Apart from these, there are two other problems: The first is that even Ponzi Scheme is not known what it is, since nothing related to monetary matters is taught in schools. The second, most of the people now deserve to be paid because they have made all their retirement payments.

However, if each of these people in the US starts receiving only $ 1,000 per month under Social Security and Health Insurance, the government will have to allocate an additional $ 75 billion per month for salary payments. This amount is equivalent to the cost of Hurricane Katrina or the Iraq War. The good news is we still have time to prepare for the impending financial hurricanes.

You can feed a person for a day by giving fish. And this is what we have been doing as the world for a long time. This is the thought that underpins Social Security and Health Insurance Services.

I want to encourage you to get rich because the world is turning into a two-class society; only rich and poor.

The middle class in Western nations is slowly but surely disappearing. If you want to stay in the middle class, you may need to consider living in China or India. These two countries are making their middle class bigger, rather than destroying it. But keep in mind that middle class members in China or India generally don’t live a better life than many poor Americans. This is because the middle class is too crowded in these countries. 

The rich will always spot opportunities, while the poor will bury their heads in the sand and pretend nothing has happened.

Let’s think a little bit. Let’s consider how we can take advantage. 

Can you identify the opportunities that may arise from this economic order?

Let me know what you think in the comments below.

You can also read WHY YOU NEED TO INCREASE YOUR FINANCIAL IQ if you are interested in. In this post, I have outlined how to improve Financial Intelligence.

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Work in the Same Field But Earn More

by Enes Öner8 Comments on Work in the Same Field But Earn More

A few days ago, my computer suddenly broke down. I immediately contacted a friend who understands electronics but is a student in a completely different field. My friend solved the problem in minutes with a video call. Listening to the sound of the case was enough for him to understand the problem. I was shocked.

The world is full of awake, resourceful, educated, and gifted people. We come face to face with them every day. On the road, in the market, in the movie theater, in the stadium… They are around us.

I am always surprised how little talented people earn. I recently heard that the proportion of Americans making $ 100,000 annually is less than 5 percent. I know smart, highly educated people whose annual income is less than 20 thousand dollars.

Someone who specializes in buying and selling medical supplies told me that doctors, dentists and physical therapists are facing financial difficulties. He said: “They are one step away from great wealth.”

Most people can manage to increase their income substantially if they add another to their skills: Financial intelligence is the synergy of accounting, investment, marketing and law. Making money is easier if you combine these four technical skills.

If my friend who helped me fix my computer had learned sales and marketing skills, his income would have grown tremendously. If I were him, I would research how I could do this business online and develop it. At the same time, I would improve myself in public relations. I would learn to reach the masses with free publicity. Ultimately, I would have more opportunity to profit from my own skills. In a short time, I would be one of the “best” in this area of expertise.

I suggest you look for jobs that will help you improve yourself. Before you decide on a particular profession and become a prisoner in a rat race, you have to decide what skills you want to learn.

Once a person gets caught up in a bill-paying cycle, they’re just like little mice spinning small metal wheels. They always run, but never go forward.

There is a lot of big talk in Jerry Maguire, in which Tom Cruise stars. Perhaps the most memorable line is: “Show me the money.” But there is another line that seems most realistic to me. The sentence Tom Cruise said when he left the company. He was fired and asked all the company members: “Who wants to come with me?”. But everyone is silent, almost frozen. A woman speaks only, “I’d love to come, but I’ll be promoted in up to three months.” she says.

Perhaps this is the most striking phrase spoken from the beginning to the end of the movie. It’s the kind of word used by people working to cover their bills. We all have someone around who studied for years and then got a job with an average salary. These people look forward to the hike they will receive each year, and they are disappointed each year.

I often ask everyone: “Where is this daily activity taking you?” I wonder if they too are looking where this hard work is taking them. What awaits them in the future?

I ask you too, do you think about your future or are you looking forward to the next paycheck without questioning where you are going?

Please let me know your situation and your thoughts below.

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I recommend you to read THE TWO MOST IMPORTANT SKILLS TO INCREASE YOUR INCOME.

Book Recommendations, Financial IQ, investment, Taxation

Why You Need to Increase Your Financial IQ

by Enes Öner10 Comments on Why You Need to Increase Your Financial IQ

The average American today works for six months to pay taxes. This is a very long time. The more one work, the more she pays the government.

In this article, we’ll take a look at how taxes work in favor of corporations and the rich, and then discuss the power and advantages of corporations.

When the poor and middle class try to punish the rich, the rich do not bow down and react. Because they have money, power, and are determined to change things. They don’t just sit around and agree to pay taxes. They look for ways to reduce their tax burden, recruit skilled lawyers and accountants and persuade politicians to change laws and create legal loopholes. They have the opportunity to change the rules.

For example, the US tax law provides some possibilities to avoid paying taxes. Many people cannot access these opportunities because they are busy with their own work. These legal loopholes are details only the rich can see. For example, “1031” means the section numbered 1031 of the State Revenue Law. It allows the seller to delay tax on real estate sold to be exchanged for a more expensive property for the purpose of capital increase.

Real estate can offer great tax benefits. If you are not selling for disposal, you will not pay tax on your earnings as long as you trade them to increase their value. People who do not take advantage of the tax savings made possible by law miss the opportunity to grow their assets.

A high Financial IQ is required to be aware of and benefit from these opportunities. And raising Financial IQ only takes four areas of expertise:

  1. Accounting. We can also call this financial knowledge. This skill is a must to build an empire. The more money one takes the responsibility, the more careful one has to be. Otherwise everything will be ruined. Details matter. Financial knowledge is reading and understanding bank statements. This skill allows to identify the strengths and weaknesses of any organization.
  2. Investment. The science of making money. Strategies and equations are important for making the right investments. This skill is linked to creative intelligence.
  3. Understanding Markets. It requires knowledge of supply and demand. It is necessary to know the “technical” aspects of the markets. Whether an investment is right or not depends on current market conditions.
  4. Laws. A company with technical skills related to accounting, investment and the market grows rapidly. But a person who knows the tax law and is under a corporate shield can get rich much faster than someone working for someone else or just someone who owns a small business. This is like the difference between walking and getting on a plane. The difference is huge when it comes to long-term wealth.

Employees earn and pay taxes, and live with the rest. The company earns and spends money and pays taxes on the remaining amount. This is one of the biggest legal tax loopholes benefited by the rich.

This is easy to do if you have investments that generate good cash flow. For example, you can turn your vacation trips into board meetings in Hawaii. Automobile payments, insurance, repair expenses turn into company expenses. You can show your sports club membership fee as company expense. You can add most of the restaurant expenses to company expenses. There are many more advantages like this, but they should be done before paying tax.

The rich hide most of their wealth. They use companies or foundations to protect their assets from creditors. When someone sues a wealthy person, they face a legal protection shield, and often that wealthy person “has no property”. The rich keep control of everything, but they have no property. The poor and middle class try to own everything and lose them to either the state or other people.

In short, if you have legal assets, find out as soon as possible the benefits and protection shield a company can offer you. You will find many books written on the subject. Even if you look at the company establishment stages, you will get detailed information on this subject. The power of sole proprietorships is well described in Napoleon Hill’s book Think and Grow Rich.

Financial IQ is actually a synergy of many skills and abilities. But I think the combination of the four technical skills I listed above forms the basis of financial intelligence. If you have a desire to make a great fortune, then the combination of these skills becomes even more important.

As part of your overall financial strategy, my suggestion is to have your own company equipped with assets.

Please let me know what you think below.

Keep reading with WHY ACCOUNTING KNOWLEDGE IS NEEDED.

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Debts, Financial Attitudes, Financial IQ, investment, Understanding Money

Don’t Work Too Hard -Work for Yourself

by Enes Öner6 Comments on Don’t Work Too Hard -Work for Yourself

The mentality of considering home as investment and seeing wage growth as a resource to buy a larger house or spend more is the foundation of today’s debt-based society. Most people move up to higher positions in their jobs over time and receive regular salary increases. However, due to the increase in expenses, many families are under greater debt day by day and face more financial uncertainties.

If you are an employee,

  1. You work for someone: Most wage earners enrich the boss or shareholder. Your efforts and success contribute to the success and retirement of the boss.
  2. You work for the state: The state gets its share before you get your salary. By working harder, you increase the amount of tax charged by the state. Most government officials work from January to May only for enriching the state.
  3. You work for the bank: After taxes, your biggest expense is deductions and credit card debt.

The problem with hard work is that each of these three stages gets their share thanks to your increased efforts. What needs to be learned is how to translate increased efforts directly for the benefit of you and your family.

Most people have to rely on their salary to pursue their profession and receive income-generating active funds. So how do they measure the extent of their success as their actives grow? How does one realize that he or she is rich or has wealth? In this regard, besides the definition of active and passive, the definition of wealth is also important. Let’s look at what R. Buckminster Fuller said. Although what he says seems quite complicated, it begins to make sense after reading it thoroughly:

“Wealth is a person’s ability to survive so many numbers of days forward … or if I stopped working today, how long could I survive.”

R. Buckminster Fuller

Wealth is the measure of cash flow from comparing the expenditure column to the asset column. If it sounds a bit complicated, let’s explain it with an example:

Let’s say you have $ 1000 a month of cash flow from the active column. Your monthly expense is 2000 thousand dollars. How much is your wealth?

Let’s return to Buckminster Fuller’s definition. How many more days of financial power do you have according to Fuller? Only half a month’s cash flow.

If the cash flow from your assets reaches $ 2000 a month, then you are rich.

So, you are not rich yet, but you are wealthy. Every month, you have income generated by active funds that fully cover their monthly expenses. If you want to increase your spending, you must first increase the cash from your assets to maintain this level of wealth. Remember that you are no longer dependent on your salary. You are successful in building your active columns that gives you financial independence. Even if you quit your job today, you can meet your monthly expenses with net income from your assets.

The next target will be to transfer the surplus cash flow from active funds back to the active column. The more coins enter the active column, the larger the column gets. The larger your active funds, the greater your cash flow and net income. As long as you keep your expenses less than the cash flow from your assets, you will get richer, you will have income other than resources from your physical effort.

As this reinvestment process continues, you take firm steps towards getting rich.

Few people have enough money to survive today. There are even people who do not have enough money to live for a month. Many Americans have less than $ 400 in savings. A more shocking statistic in 2016, the GOBankingRates found that 34% of Americans had no savings at all. Few people can survive for a long time without a paycheck or government aid.

Lastly, let’s keep in that in mind:

The rich buy the active funds. The poor have only expenses. The middle class buys passives that they think are active.

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The First Rule of Getting Rich

by Enes Öner9 Comments on The First Rule of Getting Rich

In the previous post, it is explained that the first step to getting rich is to have accounting knowledge. In this article, I will tell you the first rule of simple accounting.

The first and foremost rule to get rich is to always invest money in active funds.

If we really want to get rich, this information is enough for us. This rule may sound very simple. It is so simple that it is often overlooked. Most people live without realizing how important this is. They always suffer financially because they don’t know the difference between active and passive investing.

If we adopt this rule, we will have a financial plan and will not suffer economically throughout our lives.

Now we must know the difference between active and passive.

While active funds make us money, passives take the money away from us. That’s all. If we want to get rich, we must buy actives for our lifetime. Thus, we can increase our wealth exponentially. If we want to be from the middle or poor class, we must constantly invest our money in passives.

The major cause of financial suffering in the world is due to not knowing the difference between these actives and passives.

Lack of knowledge is the main reason for financial confusion. Whether ignorance is about words or numbers. If people are in financial difficulties, there is something they cannot read about words or numbers. There must be something they cannot understand. The rich people get rich because they know how to manage their money. If we want to get rich and increase our wealth, we have to learn financial knowledge. In the language of both words and numbers.

Numbers alone may not make much sense. So are words. The important thing is the story of these together. This is the story of where the cash flows. We read that story in financial statements. The histories of four-fifths of families tell us that their financial history is hard work. It is not because these families work hard that they cannot earn money. They had to work hard all the time because they invested in passives.

It is not enough to have money. The point is not to get rich, but to sustain wealth. Therefore, we need to ask “How to maintain wealth?” question rather than asking “How to get rich?”.

It is obvious that, getting the money doesn’t solve the financial problems we have. Even it complicates the existing problems. Money often reveals our flaws. It reveals our unfamiliar sides.

Generally, the person who gets unexpected money gets relief for a short time, but soon starts to have financial difficulties again. Sometimes they even have worse financial difficulties. If the person with increased income tends to invest in passives, his expenses will also increase.

As we mentioned in previous posts, we take education to learn professional knowledge. We earn money thanks to our profession. But we don’t get financial skills at school. Therefore, our education cannot guarantee us a prosperous life. Even if we are very successful in our profession, we may have to deal with financial difficulties. Working more can’t solve this problem. Because the knowledge of how to spend the money in our education is lacking.

In fact, learning to manage money is more effective in getting rich than choosing a high-income profession.

Knowing how to manage money is a financial skill. People generally do not know the root cause of their financial problems. Because they do not know the cash flow and do not have financial skills. In this case, people cannot operate the money for their own benefit and they work too much and get tired.

Shortly, the active and passive investment issue is actually much simpler than it seems, and everyone should know about it. Cash flow is the story of how people use money. Active funds gradually make us money, and passive funds take the money out of our pockets.

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