The topic of personal finance is very broad, but as a start, I would like to discuss what I consider the foundations of personal finance: Security, Stability, Growth and Protection & Management.
Security
Security to me means that I prepared for the “hit by abuse” scenario.I the life insurance to provide for my wife and children.Health, disability, auto and home insurance policies also provide me additional protection in their respective areas. I also have a list of where this policy, my agents are, phone numbers and basic policy information (# S, amounts, costs, etc.) I keep this information in both afile to my house and into a safe at the bank ( a friends house will also work – think: “house burns down” scenario). Also my wife and my brother and sister-in-law who live nearby also know where these things.
Stability
The next level of personal finances is stability.Stability with me that first of all I have in my life means. I do not spend more than I deserve. Otherwise I spend my savings, investments, emergency money, or in debt. I have a lot of debt, but most of it is real estate which is producing an income. I try to credit card debt and buy everything with money I already have to avoid. I do not buy things expecting that next month I will have more money or I will make a big raise or promotion to get.
growth
Once you are safe and stable, you can start to think about building your wealth. Not that you figure out how to the next Bill Gates or Warren Buffet touch. But you to begin building the second egg “that you will rely on when you retire.
Protection and Management
The final level of personal finances is to protect and manage your wealth. Most people never develop wealth enough to need this level. But some of the concepts can be applied to any amount of wealth you possess, $ 10,000 at $ 10,000,000. Part of the protection to hold back as we will discuss at the first level personal finance: security.
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