Two Financial Ideas That Will Change Your Life

Tough times are upon us. People are losing their jobs and their homes. Folks are taking stock of their lives, and their finances are part of that reckoning. Most of us are hamstrung with debt and earning too little. As such, people are looking at their finances, wondering how they can change their circumstances. The two ideas that follow, if they are new to you, will change your life. I guarantee it.

Life has a way of taking us down conventional paths. We go to school. And for most of us, that means that we take out school loans to pay for college. College asks us to decide on our life's vocation (which is absurd) and take classes. That absurd scenario makes most young adults stay in school longer, and consequently, incur more debt. After school, we get a job and start paying for that debt. Ouch.

Epic Security

Not long thereafter, we start to tire of our old cars and apartment lifestyle. Maybe we get a raise, and that's all the incentive we need to go get more debt. Yep, we get a car and house loan. Now, we've arrived. We've arrived at the typical "American Dream" of complete indebtedness. That should be a strong hint that I disagree with this dream.

Most of us go through life not having a clue about assets and liabilities. They aren't taught in school, which is a crime. And parents usually don't know about them either. This also is a crime. It's really not hard to understand. Assets make you money, liabilities take it. That's oversimplified, I know, but it serves our purpose here. People tend to put their money into liabilities. They buy tons of clothes, cars, boats, etc. Don't be like those people. What you need to do is start spending money on assets. What are assets? Well performing stocks, businesses, and cash flowing real estate come to mind. But the sky is the limit here.

If you can grasp this first concept, you are ahead of ninety-nine percent of people. This will put money into your pocket, instead of taking it out. It's a simple idea that is very, very powerful. It's like growing your money tree. Keep the tree growing, and it will make you money season after season.

The second idea is equally powerful. Not too long ago, I was on a stock forum. I was in a particular thread, talking about a very good company stock. All the fundamentals of the company were great and their management was excellent. People in the forum were obviously smitten with it. And then I had to rain on their parade. I made one statement that started an epic flame session. I simply said, "This stock is great, but won't do well in the prevailing winds of the market." You would have thought I stabbed their mother.

What followed was a tirade on how the company was amazing. They pointed out the fundamentals ad nauseum. They talked about their track record and incredible management team. I commended them and told them they were correct. But I also told them that the primary trend was against them. That fell on deaf ears. Since that time, the company stock has struggled even with the incredible fundamentals and management team.

Macro factors are like the current in a river. You can swim with them or you can try to swim against them. When macro factors get unstable, that current becomes like a rip current. And you can't fight a rip current. This brings me to the second idea. Always, always invest with the primary trend. The hard part is knowing what the primary trend is. Knowing that requires study and education. And that is a whole other topic. But, once you start understanding market trends, it will change your life. Suddenly things won't be a mystery to you. You won't be able to play every investment perfectly, but now things are stacked in your favor.

Two simple ideas. They are simple, but they take time and commitment to execute. Do yourself a favor and learn them. It will change your life.

Two Financial Ideas That Will Change Your Life

Paul has been writing informative articles like this for 6 years. Come and take a look at his newest site which discusses 2 faux wood blinds and faux wood blinds to help consumers make an informed choice about them.