Thursday, 17 December 2015

Useful habits on your way to early retirement

Yesterday i was talking about mistakes. Today i will take that discussion even further, talking about useful habits i created or i want to create in order to avoid the previously mentioned mistakes.

1. Do not lose money
A lot of people focus on making money, but as well is very important to not lose them after you make it. Warren Buffer No.1 rule is "Never lose money!".

2. Take small risk for big rewards.
As we said, a good 5-10% of your investment should be allocated for risky, highly rewarding projects. Finding ways to make a lot investing only what you can afford to lose.

3. It is what you save, not what you earn that matter.
Again, we talk about this yesterday. If you save 50% on average wages, you will be there much faster than saving 0.01% on a highly paid job. Right?

4. Diversify to reduce risks and maximize returns.
But clever diversification not random selection of shares and bonds. Low fee index fund ring a bell?

5. Stop mindless and useless spending.
Tony Robbins use to say: "spend on things that dramatically enhance your quality of life and stop spending that doesn't add any value to your life.". You get the idea. But it is only up to you to find what to cross from the list.

6. Focus on results or themes instead of to-do lists.
Relevant research find that using to-do lists is counterproductive on long term. Worth a try, i would say!

7. Knowledge is not power, execution of what you know is.
It is not enough to learn, you need to put it into practice. Just make a little bit of progress every day, every week, and before you know it, your financial independence is achieved. Somebody told me a story, about a person who choose to put some money daily in a financial freedom account. And at the end of every month to invest all the money. Imagine that, 12 years later, financially free. Just doing that. Every day, for 12 years in a row. Now that's perseverance.( I am on day 42 right now.)

8. Notice what is working and what is not.
If something work, do not change it. If something is not working, look for a different approach. But do not forget: No problem can be solved from the same level of consciousness that created it. (Einstein)

9. Do not sabotage you own success.
Sometime in order to become financially independent you need to change your core beliefs. You cannot be free with the same mindset that made you poor. It will help to see some of the video of T.H.Eker related to being rich mindset.

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