i am a dreamFinancial independence lives in many people, especially in the present time in which we live. Day in and day out we are bombarded with ads and advertisements related to investing, finance, insurance and much more.
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For young people who are just starting out in the world of finance, or even for those who are already in this world but don’t yet understand how the market works, saving can be more than a simple task. In some cases it becomes a big challenge.
So it’s important to highlight four common mistakes people make when managing their finances and how to avoid them.
Mistakes to avoid with your money
Emergency saving is extremely important. It can save your life if you ever lose your job or get sick. Having a reserve in case of an emergency is like paying for insurance. This saved money can be used when needed. Therefore, it is imperative to responsibly organize and plan an emergency fund.
Instead of spending your entire salary in a single month, it’s important to save some to think about your future. By saving an amount each month, you can enjoy a comfortable and peaceful retirement.
We are currently living in a time when wasting large sums of money is considered admirable. Spending a lot of money on unnecessary things and consuming excessively “is in fashion”. However, the rise in the cost of living begins when people begin to see oldfashioned luxuries as a necessity, or even when they believe that by doing or owning a certain object, life or product they will reach a ‘level’ in contemporary society .
Recently, stocks like NFTs, meme stocks, SPACs, and cryptocurrencies have gone viral in the business world. However, putting all your chips on these investments can be a terrible mistake. These specific assets are highly volatile and end up putting the financial health of thousands of people at risk.
Many people invest all their money in stocks like the ones above. Investing is particularly attractive to those looking to build wealth quickly. However, for Lamar Watson, a certified financial planner from Reston, Virginia, that idea doesn’t seem like the best solution.
“It’s extremely dangerous to invest all your money in highrisk assets like NFTs or cryptocurrencies,” Watson said. The planner also commented a bit more on planning: “Financial planning is more about preparing for the worst than it is about finding the greatest return.”