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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motivation

Ten Characteristics of Leaders and Successful Investors

by Enes Öner1 Comment on Ten Characteristics of Leaders and Successful Investors

They Think Positive

From time to time everyone fails, moves away from their goals, or becomes disappointed. But only those who do not give up on their goals can achieve success.

Almost every successful investor is a positive thinker. No matter how difficult the conditions are, they manage to look to the future with hope. Moreover, they do not stop improving and walking towards their goals even in the most adverse times. They don’t allow negative people or negative situations to divert them from their path. An average investor experiences dozens of small and big crises throughout his life.

Of course, we are not talking about a naive positivity here. A positive thought, strengthened and supported by knowledge, benefits everyone.

They Make Conscious Choices Towards Their Goals

Great investors and leaders make clear plans for their goals, and everything they do is directed towards that.

For example, Muhammad Ali, when he was a skinny boy, set his mind on becoming a heavyweight boxing champion and started working towards it. Warren Buffett was trying to accumulate capital by distributing newspapers with a profit of 1 cent each.

If we want to be successful, we must make sacrifices in this regard and all our steps must be directed towards this.

In particular, financial independence requires serious learning and practice. Saving can be learned, investing can be learned, but these skills do not come to you. You have to start somewhere. Then, it is necessary to constantly improve yourself.

We will either find a way or make a one. 

Hannibal

Goals Don’t Work Unless Taking Action

Successful investors and leaders “take action”. They must always move. They make and implement their decisions. Of course this requires a solid character.

You may owe a lot and you may not have invested yet. So you have to act now. Because the 100 dollars saved today is not just a piece of paper. It is a step for your new life that you are constantly improving.

“The best time to plant a tree was 20 years ago. The second best time is now.”

A popular Chinese proverb.

Successful People Never Stop Learning

Studies have found two common characteristics of successful people. The first is that they work in many different jobs and take on various responsibilities as a child. The other is reading too many books.

Warren Buffett tells students who ask the secret of being a successful investor: “You should read 500 pages of books a day. Because knowledge is like compound returns. It increases exponentially. But I know that most of you will not do that. “

The Key to Success is Working Hard and Being Persistent

Investing is like a long-term marathon. In this way, you always learn, develop and mature. Successful investors never give up.

Jesse Livermore, despite three bankruptcies, continued to renew his system, take lessons, and work harder. When Tesla first went to America, he had to dig holes for two years, Michael Jordan was kicked out of the basketball team in high school, Einstein received an F in mathematics and did not receive acceptance from the university to become a researcher.

Many of life’s failures are people who did not realize how close they were to success when they gave up.

Thomas A. Edison

Successful People Make Detailed Analysis and Search for the Facts

Famous investors attach great importance to details and work hard to get the facts. While most people forget their mistakes, they confront them and do detailed analysis.

“Plot out your mistakes on charts, study them, and write some additional rules in order to correct your mistakes and the actions that cost you money.”

William O’Neil

“When the facts change I change my mind, what do you do sir?” 

John Maynard Keynes

Successful Investors Focus on Time and Money

Successful investors value their time very much. Being able to say no is their biggest weapon. They don’t let anything get in their way and distract them from their goals.

Focusing and saying no are important to achieving goals.

Success Often Requires Doing Things Different and Innovating

Most successful people have found new ways to do things more efficiently. Most of the time, they criticized the existing.

Sam Walton warns people to swim against the flow of the river, to go the opposite way of everyone’s heading, and to go against the general public belief. “If everyone is doing something the same way, you can find different things only by going in reverse.” he says.

John C. Bogle, who revolutionized the Fund Management industry with low-cost index funds, could not convince anyone when this idea came to his mind. Now, most of the savings in America are parked in low-cost S&P 500 index funds.

Successful People Inspire The Masses

Successful people set an example to others with their lives and words. They are a teacher, motivating coach or inspiration for the masses.

Warren Buffett’s letters to Berkshire Hathaway shareholders are read by millions.

Long-Term Success Requires Honesty and Solidity

Successful leaders are all honest, reliable, and responsible people. They never give up on their principles. Because these principles are the products of experience they have created to prevent them from making the same mistakes again.

Jesse Livermore has never taken a venture with all his money again after losing all his money twice. In addition, he has adopted the principle of cutting his losses after reaching a certain rate. Warren Buffett never invests in businesses he doesn’t know about.

Principles like these have saved the lives of investors.

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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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investment, motivation

You May Lose Money Because You Don’t Invest Enough Time

by Enes Öner1 Comment on You May Lose Money Because You Don’t Invest Enough Time

There are only two things we can invest with: Time and money. Many people lose money because they don’t invest enough time.

Remember the 90/10 rule of money. I can say that 90 percent of the investors invest with money, but don’t invest enough with time. And the 10 percent who earn 90 percent of the money invest more time than money.

Let’s take a look at the diagram of three types of investors below. This is important to understand the relationship between time and investing.

When we look at this simple diagram, it is easy to understand why non-investors and passive investors say “Investing is risky.” They either have little or no financial training, and they have little financial experience.

Most investors consider investing risky and seek financial advice from finance professionals with little financial training or experience.

Did you know these?

• Becoming a licensed massage therapist takes more time than becoming a financial advisor.

• Less than 20% of all stockbrokers and real estate dealers invest in products they recommend to their clients.

• Very few politicians and legislators have any investment.

• Economics department academics generally don’t have a financial training or experience in investment.

• Many journalists who write on finance issues have little financial education or investment experience.

Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.

Warren Buffet

It was discovered that the most used word in English is “time”. The word “money” may also be in the top 100, but it wasn’t even near “time” on the list. 

How you spend your time is very important because lost time can never be recovered. The money lost is often recoverable. As Pericles puts it, ” Time is the wisest counselor of all.”. I recommend that you be mindful of your time and learn to invest your time thoughtfully.

If wasting 15 minutes meant losing $ 500, would you be more conscious of how to spend those 15 minutes? I think you would. If you are in the hospitality industry, going to new restaurants doesn’t mean you waste time and money. What waste is, is different for all of us.

Be aware of how you spend your time. Not all money in the world can make up for lost time.

We are all affected by money, regardless of who we are or where we live or what we do. If there is something that will affect your life, it’s best to learn as much about it as possible. Can you find time to invest in your financial education?

Evaluate how you spend your time. There are 168 hours a week:

Can you devote between 4 and 10 hours a week for your financial education? You can probably do that. The real question is: Will you take the time?

Make a promise to yourself to take more time to learn, and then keep your word! Reading this blog is a good start. But more is always needed. What else can you do?

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investment, Stock Market, Understanding Money

Are Your Retirement Plans Really Safe?

by Enes Öner2 Comments on Are Your Retirement Plans Really Safe?

Unfortunately, millions of people around the world have to invest despite having insufficient investment knowledge. Many who try to spend their lives free from financial risks now have to risk their chair days. The vast majority will find out if they are investors or gamblers when they retire.

Today, the stock market is on the agenda of the whole world. However, not only those who have knowledge are active in the stock market, but also many people who try to become investors but do not understand investment.

The four ways of earning income.

Since the vast majority of these people are currently working in a company or a government agency or are in the self-employed category, they are concerned about assurance by nature. Therefore, they want to work in a job that provides assurance or they want to acquire professions that provide assurance, even if they establish their own business, they care about having the control on them.

The reason why they want to switch to the “investor” category today is that they want to find “assurance” when they end their working life. Unfortunately, being an investor is not known for providing assurance. On the contrary, risk speaks here.

Since the distinguishing feature of these people who want to be investors is security, the stock market reacts according to their expectations. This is why you often hear “diversification”, “reputability” or “investment trust”…

Diversification

Those who love guarantee often use the concept of diversification. Because diversification is an investment strategy determined “not to lose” but not “to earn” also. Successful or rich investors do not use diversification.

Let’s look at what Warren Buffett, perhaps the world’s best investor, said about diversification: “The strategy we have adopted is against the standard diversification rules. Therefore, most experts say this strategy is more risky than conservative investors pursued. We do not agree with this. We believe that the portfolio concentration policy will both reduce the risk that may arise and provide the comfort and business conditions that the investor seeks depending on the economic values that he expects before purchasing. “

In other words, focusing on portfolio concentrations or a few investments is a much better strategy than diversifying, according to Warren Buffett. Compared to diversification, concentration requires a person to be smarter and to take their thoughts and actions under more intense control. In his article, Buffett says that a mediocre investor avoids volatility because he thinks the ups and downs are risky.

“Reputable companies”

Investors seeking assurance are interested in stocks of reputable companies. The company may be reputable, but things are very different with the stock market.

Investment Trust

People who know little about investing prefer to hand their money over to a fund manager in the hope that they will use it better than they do. This is a smart way for those who do not intend to become professional investors. However, it does not mean that mutual funds are less risky. Frankly, when the stock market is upside down, we may experience a disaster similar to the Tulip Mania in the 1600s or the Great Bond Massacre we witnessed in the 1990s.

There are millions of people who love guarantees and want to be investors in the markets today. But due to the changing economy, investment doesn’t have much to do with assurance. Most people believe their retirement plans are safe, but not at all. An economic crisis can ruin everything. Things are not like they were in the past today.

Great Economic Turmoil at the Door

Such turmoil heralds the end of an age and the arrival of a new age. At the end of each age, some people cling to past values while others progress. I must say that those who give responsibility for their financial security to a large company or government will have a lot of difficulty in the coming years.

Nobody has a crystal ball. I follow major investors and most of their investment publications. Each say a different thing. Some say the near future looks bright, while others say the stock market crisis and a great depression are at the door. I listen to both views to look at the situation objectively, because they both have some merit. And those who are ready for bad days will reach wealth no matter what direction the economy takes.

We should be concerned about our long-term financial security and leave the responsibility for this neither to a company nor to the government. Conditions have changed since companies declared that they are no longer responsible for their employees’ retirement. Therefore, we all need to be awake investors and be aware of the ups and downs of financial markets.

My advice is to learn how to become an investor instead of handing over your money to someone else to invest on your behalf. If you invest your money in a mutual fund or give it to an investment professional, you may have to wait until the age of 65 to see the result. If they did a terrible job, you may need to continue working for the rest of your life. Millions of people will be faced with this reality because they will be too late to invest or learn to invest.

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investment, Taxation

Don’t Be Afraid To Invest Your Money

by Enes Öner2 Comments on Don’t Be Afraid To Invest Your Money

Wealth Is Measured in Time Not Money

“Wealth is the number of days a person can live without physically working and maintaining her standard of living.”

Let’s say your monthly expenses are $ 1000. If you have $ 3000 in your savings account, your wealth means 3 months or 90 days. Wealth is measured in time, not money.

After all, it is not how much money you make, but how much money you can keep and how long you can increase the money. I know many people who make a lot of money every day, but most of their income goes to the spending column.

If their income increases, they consider buying a bigger house or a new car. This means long-term debt and hard work, so nothing is left for the asset column. Money runs out quickly.

“Going in Red” Shortens The Life Of The Engine

To go in red is to continue driving even though the gas gauge drops empty. This phrase is also used to describe going at full speed.

Whether rich or poor, there are many people who always “go in the red”. No matter how much they earn, they quickly spend what they get. “Going in red” shortens the life of the engine.

According to many doctors, the main cause of stress today is hard work and not making enough money. Especially some people insist that “wallet cancer” is the biggest cause of health disorders.

Money Works for You So You Don’t Have To Work

No matter how much money people make, eventually they have to use some of it to invest. Investors are more interested in making money out of money. This is also the idea that money works for you so you don’t have to work. But the important thing here is to know that there are other ways to invest.

Other Ways to Invest

People invest in their education. Traditional education is important because the better you study, the better your chances of making money. If you devote four years to college, you have the potential to earn between $ 24,000 and $ 50,000 a year or more. Considering that an ordinary person actually gives 40 years to work, studying at a four-year university or similar institution can be a very good investment.

Loyalty and diligence are also another means of investment, for example a lifetime working in a private company or a government agency. The reward for this is the retirement bonus and lifetime pension, as well as the right to various services. However, this type of investment, which is valid in the Industrial Age, has lost its validity in the Information Age.

Others invest in a crowded family and want children to take care of them in their old age. Such an investment used to be good, however, due to today’s economic difficulties, families are no longer in a position to meet the living and health expenses of the elders.

There are also independent pension investment plans called individual pension plans. The federal government provides tax relief for incentives to both employers and workers so that they participate in these plans.

Income from Investments

Although all of the above are investment tools, people who invest are more concerned with a continuous source of income than these. Are you currently deriving your income from your investments? In other words, does your money work for you and generate income for you?

Let’s look at someone who buys a house for investment and rents it out. If the rent he receives is more than he has to spend for that house, it means cash coming from investments. The same is true for those who earn interest on their money in the bank or receive dividends from stocks.

Advantage of Earning Income From Investments

The main difference that separates those who make money from their investments from others is to make money from money. If they succeed in this, they can run their money, and the next few generations of members of their family also benefit.

In addition to the obvious advantages of knowing how to earn money from money and live without having to get out of bed in the morning and go to work, there are also tax advantages that are not available to those who work to make money.

One of the reasons the rich get richer is because they earn millions but do not pay taxes on that money. Because their earnings are included in the “active column”, not the “passive column”. Or they make money from their investments, not physical work.

Those who work to make money are not only subject to high taxes. Also, a certain tax is deducted from their wages, that amount goes to tax before they even get it.

Why Are More People Not Being Investors?

Investing means working less, earning more and paying less tax. So why don’t more people become investors? For the same reason as the small number of people starting their own business. In one word, we can say because of “risk”.

Many people are afraid of losing money when they are investing it somewhere. Even if they know how much their investments may earn them, they avoid investing and risking their money because they are afraid of losing.

Fear of losing money divides investors into four classes:

1. Those who avoid risk, love guarantees and keep their money in the bank

2. Those who leave their investment decisions to experts such as financial advisors or mutual fund managers

3. Gamblers

4. Investors

We can distinguish between the gambler and the investor as follows: According to the gambler, investment is a game of chance. For those who hand their money over to someone else to invest, investing is a game that they do not want to learn. It is important for these people to be careful when choosing financial advisors.

It’s Time to Become an Investor!

The defined and predictable plans of the Industrial Age are gone. As the Information Age shifts to specific retirement plans, everyone has to be responsible for their own finances. However, the number of people who realize this is very few.

I urge you to read my WHY YOU NEED TO INCREASE YOUR FINANCIAL IQ post.

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Financial Attitudes, investment, motivation

Earn More With Less

by Enes ÖnerLeave a Comment on Earn More With Less

The difference that separates a good investor from a bad investor is that the good investor can make more money with less money.

Leverages allow us to do more with less force.

The Key Is Leverage

People have sought to do more work with less labor since they lived in caves. When a child was old enough, he was taught to use a spear for hunting and defending himself. Spear has provided a great deal of convenience to human beings in their cruel environment. Over the years the spears have shrunk in size and the bow and arrow have been developed. This was a superior technology. Compared to a spear, the bow and arrow allowed people to do more with less.

As time progressed, man learned to tame horses. More distance could be taken on horseback in a shorter time and with less fatigue. It was an important convenience used not only in transportation and agriculture but also in wars.

When gunpowder was invented, the rulers who owned the cannons triumphed. Indigenous peoples such as the American Indians, the Hawaiian people, the Maoris of New Zealand, the Aborigines of Australia, and many other cultures lost to gunpowder.

Just a hundred years ago, cars and airplanes replaced horses. Once again, these new technologies have been used in wars and peacetime for some work. Telephone, radio, television, computer and internet networks all also enable people to do more with less. Actually, they are all levers. Each breakthrough new invention brings more power and wealth to those who have access to these tools.

If you want to be rich and not a victim of global changes, it is essential that you develop the leverage that is stronger than all others: Your mind. If you want to be rich and protect your wealth, your mind, your financial education, is your strongest lever.

You might say: “I don’t know anyone who can teach me finance. I haven’t heard of such an education. There is nothing to do.” Perhaps because of this mindset, your chances of reaching great wealth and, more importantly, protecting your potential wealth are extremely low. Your chances are low because you are using your most important asset, your mind, against yourself. You’re using your mind to find excuses instead of making money or finding solutions. Remember that your mind is your strongest lever. If you can’t control your mind, you can’t control your life. Excuses are easy to find. For this reason, unsuccessful people always have an excuse.

We Are All Born Rich

We are all born rich. Each of us has been given intelligence, the world’s most powerful lever. So instead of using our minds to make excuses, let’s use it as leverage to make us rich.

In summary, the difference between cavemen and monkeys is leverage. The difference between the rich, the poor, and the middle class is leverage. The difference between savers and investors is leverage. A well-educated and disciplined investor can achieve higher returns by taking much less risk and spending less money. But this requires leverage. And in order to have leverage it requires you to train yourself and use your mind wisely.

If you want to learn more about investing, you may read my YOU NEED TO SAVE MONEY post.

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Debts, economy, Financial Attitudes, investment, Understanding Money

The Difference Between A Good Investor And A Bad Investor

by Enes Öner2 Comments on The Difference Between A Good Investor And A Bad Investor

Many people invest in mutual funds. When I ask someone, who is investing in mutual funds, he answers: “But I am also investing. I have a portfolio of mutual funds. I also have bonds and stocks. Isn’t this all investment?”.

Yes, saving is also an investment. Buying mutual funds, stocks or bonds is also an investment. But it is the kind of investment a saver would make, not an investor.

Let’s take a look at the passive investor philosophy. Most investment advisors provide a recommendation like that:

• Work hard

• Save money

• Get rid of your debt

• Make long-term investments

• Diversify your investments

This is good advice for a certain group of people – suitable for people with a savings philosophy or passive investors. In today’s circumstances, I believe this advice is riskier than any financial advice. It may seem as a reliable and wise advice to those who are financially inexperienced.

There is only one word to distinguish between a saver and an investor. That word is leverage. Thanks to leverage, you have the ability to do more with less.

Many savers do not use financial leverage. And if you don’t have enough financial knowledge or experience to apply leverage, it would be better for you not to use it. I will explain this to you later. Let’s take a look at these standard recommendations from the perspective of the saver and then the investor.

Work Hard

When many people think of “work hard” advice, they only think about their own hard work. The leverage effect on one’s own hard work is very small. Imagine if others will help you to get rich with their hard work. This is the power of leverage. States do not ask us to seek jobs, but to create jobs. If everybody starts looking for work, economies will collapse. For economies to grow, we need people who can create jobs.

Save Money

The problem with saving money is that the current economic system needs borrowers, not savers, to grow. In order for our economic system to continue to grow, it needs smart borrowers. The system does not need people who get poor by borrowing, but people who can borrow money and get rich. While 10 percent of the people who borrow money in the world benefit from their debts to be rich, 90 percent of them become poor with their debts. And this ratio is getting worse every day.

Get Rid of Your Debt

Many savers think that debt is bad and it’s smart to pay off mortgage loans quickly. And for many people, borrowing is bad and getting rid of debt is wise. However, if you are willing to devote some time to your financial education, you can use your debt to move forward. But if you are considering investing with debt, I would like to warn you once again that you should invest in your financial education first.

There is good debt and bad debt. Being financially smart is knowing when to borrow and when to avoid it.

In these economic conditions, savers are losers and borrowers are winners. For whatever reason, you should always be careful when using borrowed money.

Make Long-Term Investments

Look at this advice in terms of sellers: “Give me your money to keep me for years, and I’ll get certain payments from you over the long term.” The phrase “make long-term investments” is like the advantages that allow you to earn points. You become a loyal customer.

Depending on the payments you make to manage the fund, mutual funds may not earn you as much money as other investments.

Diversify Diversify Diversify

Warren Buffet, considered the richest investor in the world, says this about diversification: “Diversification is a safeguard against ignorance. It won’t make much sense if you know what you’re doing. “

Then the question arises: Whose ignorance do you protect yourself from? Is it your own ignorance or the ignorance of your financial advisor?

Diversification generally means that you should not put all the eggs in the same basket. Warren Buffet puts them all in the same basket. He once said: “Put all your eggs in one basket, but watch your basket carefully.”

Personally, I prefer to focus rather than diversify, and actually the reason I was able to move forward was focus, not diversification.

I saw an acrostic on focus in a book I read.

For many, diversification is a good strategy. This is only because it protects investors from themselves and inadequate advisors.

The traditional financial planning advice “work hard, save money, get rid of your debts, make long-term investments and diversify” is good for the average. This advice is also good for those who are rich but are not interested in learning how to become an investor. Many movie stars, wealthy professionals, or former athletes do that. Just remember that while following this path, you will have a very small leverage.

Are you interested in investment? Check out my other posts about investment here.

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motivation

Work in the Field You Wish to Work in

by Enes Öner1 Comment on Work in the Field You Wish to Work in

It is important to know yourself and your inclinations before taking a step on the path you are thinking of.

I know that some people’s gaze becomes dull when they see a formula or a graphic. Because they know it takes some time and effort to understand them. But those dull looks can turn into a joyful or even exciting gaze when it is realized how much cash flow and profit success can be improved thanks to understanding the graphics. This is a choice.

We all need to do some internal research to find out what we want to be and do. What if you realize one day that you are not living your life as you wish? If your own life isn’t yours, then whose? If you are not going to think about your own life, then who will think about it?

I hope we all chose which area we would like to do business in. It’s about having the vision and goals to make things happen and achieve success. It is difficult to change the status quo if necessary, but sometimes it is best to do so.

The right to choose is a freedom that we should all have. When I meet people, whose lifestyles are different from mine, I think of restaurant menus: There is something for everyone. And if what we’re looking for isn’t on the menu, we can always find another restaurant we can go to. After all, everyone has their own taste.

We can be very influenced by the people around us. It is not easy to get out of our comfort zone and do something different. We may need some time to be able to move forward our own way. But we can eventually manage to choose a path full of people and events that we really enjoy. This is like writing the screenplay for the movie we’re in. We enjoy writing, playing and watching it.

Imagine yourself writing the scenes of your life movie. What kind of scene would you like to act? I don’t think any of us would want to write scenes where he was doing unnecessary work or getting bored or poor. While such scenes are not fun to write, they will also be boring and depressing to act and watch. Give yourself the freedom to move towards the person you really want to be or the things you want to do.

I say “give yourself the freedom” because most likely you will be the one who gives yourself a chance. Many people want their status quo to continue. However, maintaining a position will not get anyone forward. You have the ability to take steps. Reading this post and this blog is a step towards change.

Life is a war. Make sure you fight well. Also, avoid empty and meaningless wars. Don’t live a worthless life and waste your energy.

Do not forget to write your own script. Then act it and see you live the life you desire. This is a freedom, this is a power, and that means winning in every sense.

If you want to make a change in your business, I recommend you to read my MAKE MONEY IN A BETTER WAY post.

Do you need to get motivated for your financial growth and getting rich? You can reach my other posts in motivation category here.

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Financial Attitudes, investment

Which Path Are You More Inclined To? (Employee, Self-Employed, Employer or Investor)

by Enes Öner3 Comments on Which Path Are You More Inclined To? (Employee, Self-Employed, Employer or Investor)

To earn money, we must be an employee, self-employed, employer or investor. Of course, we can be a few of these at the same time. We mentioned about that. Let’s look at these four ways to make money in more detail. Thus, we will see the characteristics of the people who tend to take each path.

Employee

When I hear the words “assurance” or “side income,” I get an idea of who the person is actually speaking. The word “assurance” is a sign of fear. There are many who hate the fear that comes with economic uncertainty. Employees frequently use the concept of assurance when they are afraid. 

The concept of “side income” refers to a defined additional income besides the wage received, such as a health plan or individual pension. The important thing here is the desire of employees to feel safe and to see something on the document. Uncertainty doesn’t make them happy; they seek certainty. They say, “I’ll give you this… but in return, promise to give me that.”

Employees want to reduce their fears. They want assurance and solid agreements when it comes to employment. When they say “Money doesn’t concern me.” they say it right.

For them, assurance is more important than money.

Employees can be senior managers or janitors. It doesn’t matter what they do, what matters is the employment contract they signed with the institution they work for.

Self-employed

These are those who want to “be their own boss” or “do their own business.”

They’re tight when it comes to money, and they don’t like their income dependent on others. If a self-employed person works hard, they want to pay off. They do not like to be determined by someone else or someone who does not work as hard as they do. If they work well, pay them. No, if they don’t do their job well, they will understand that they have to get as much as they deserve. They have a completely independent spirit when it comes to money.

This group includes well-educated “professionals” such as doctors and lawyers who have spent their years studying.

Most self-employed people are perfectionists. They want their work to be very good. According to them, nobody but themselves can do the best. They don’t believe that no one can do a job the way they want to. These people are artists in their own field and they do their work in their own way.

That’s why we become their customers. For example, you will go to a dentist, you want her to be well trained and experienced in her field. But more importantly, you pay attention to her being a perfectionist. You show the same care for hairdressers, marketing consultants, plumbers, electricians, lawyers or trainers. Whichever self-employed you need, you look for the best in the field.

It is not easy for these people to find someone to work with, because they do not believe that there is someone who will do the job better than they do. It is not easy for these people to find someone to work with, because they do not believe that there is someone who will do the job better than they do. “I cannot find a suitable colleague to recruit,” they often complain.

They train someone and teach the business. Most of the time, the trained employee quits the job to “do his own job”, “to be his own boss” and “to go his own way”.

Employer

They can do almost anything that self-employed people do not. Real employers hire people from all four categories for their business. Unlike self-employed people who do not like to distribute work to others because they don’t think that anyone but themselves will do the job the best, real employers love to share work. The motto of these people may be “Why should I do it when I can have someone else do it?”.

Henry Ford, for example, is one such person. It is said that a group of intellectuals accused him of being ignorant. They claim that Ford is “unaware” of the world. Then Ford invites them to his office and tells them to ask him questions. Thus, these intellectuals begin to pose questions to America’s most powerful industrialist. After listening carefully to the questions, Ford reaches for the phones on his desk and calls one of his smartest assistants inside, asking him to answer the questions. At the end of the panel, he tells his guests that he is hiring smart, educated people so that he can devote time to more important tasks. His more important task is “thinking.”

Self-employed people own a business, whereas employers own the system they have set up and employ people who are qualified to run that system. Most of the time, self-employed people can’t leave their jobs. When they want to take a vacation, their income must also go on vacation. This is an important difference between self-employed people and employers. Employers can take a vacation whenever they want, thanks to the systems. When they go on vacation, the flow of money continues.

The requirements to be a successful employer can be summarized as follows:

a. Owning or controlling the system;

b. Leading people.

Investor

Investors make money from money. They don’t have to work because their money works instead.

This way is the playground of the rich. Whichever way one earns money, if one day aims to get rich, sooner or later he has to choose the investment path. This is the only way where money can be converted into wealth. And the great thing about all of this is that it is possible and easy for anyone, whether poor, middle-class or rich, to choose this path.

I recommend you to read my THE KEY TO BEING A SUCCESSFUL INVESTOR post. You may also read THE FIRST RULE OF GETTING RICH if you are interested in investing.

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