A Different Angle On Basic Financial Advice

Let's face it, financial advice can get stale over time and lose its appeal in the process. In some cases, we toss it out and declare ourselves a financial rebel, playing the financial game the way we want.

But playing the financial game unguided comes with its own set of risks. While shaking off tired advice is tempting, ditching it all can lead to costly mistakes.

Imagine navigating a treacherous mountain path 'blindfolded' just because the map or guidebook seemed dull. Some wisdom, even if repetitive, serves a purpose.

So, before tossing out what seems to be boring financial tips, let's take a more closer look. Perhaps, these seemingly boring bits of wisdom just need a little creative interpretation?

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A Look Into The Gap Between Viewpoints

Traditionally, 'spend less' is one of the main golden financial advices. Without context, this can be interpreted in all sorts of ways.

If you think about it, investing is a form of spending. But the general idea is to spend less than we earn, so that we can have a positive cashflow, which is fundamental for financial stability.

The catch is there's a limit to spending less, especially in the modern era and the other side of the equation, which is earning more is often overlooked or ignored.

Unless we have a serious spending problem, we ought to put more focus on earning more than on spending less.

This isn't a rejection of mindful spending, but a recognition that financial growth comes in both directions.

The pressure to invest early when we’re young is real. But oftentimes, it feels daunting for those with immediate needs. For me, the question was build the present or secure the future?

For the most part, the answer lies on individual preferences and circumstances. However, I think it's not a bad advice to prioritize building financial security first. Laying a solid foundation of emergency savings before taking on investment risks.

Planning for the future is definitely crucial, but it shouldn't overshadow the present moment.

Is debt good or bad?
Well, a correct answer is that it is both. High-interest debt is a predatory beast, true, but not all borrowing is bad.

For example, taking on strategic debt, like funding a business venture, pursuing higher education with a high earning potential, or investing in assets that appreciate in value, can be a springboard to financial growth.

The key is responsible management, since debt is a double-edged sword. Wielded wisely, it can open doors and not debt traps.

When we first set out to track our expenses, it's easy to slip into the microscope zone. Every expense, no matter how small or trivial gets meticulously noted or logged in. This hyper-detailed approach can feel exhausting over time. Ultimately leading to analysis paralysis and, ironically, losing sight of the bigger picture.

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But here's another way that I find more efficient and effective: the telescope view. This means taking a step back, and broadening our focus to key categories like housing, food, and entertainment. Since these pillars hold much weight in our financial lives, tracking them gives us a broad and clear sense of where our money truly flows.

The microscope view has its merits, offering granular insights into spending habits and potential areas for immediate cuts. But in my view, the telescope's power lies in its simplicity and long-term vision.

In Closing

The key takeaways?
Basic isn't necessarily boring. Explore beyond "spend less," focus on both earning and mindful spending, and prioritize secure foundations before building financial castles.

Debt can be a tool, tracking can simplify, and the best approach is always the one that fits your unique financial landscape.


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Posted Using InLeo Alpha