Financial Independence has direct correlation with happiness. It is now proven that Financially independent people are more happier than those that are in the same income age group of people who are not financially secure.
I know that many people argue that money is not everything or money is the root of all the evil… etc… But well, This is not true. According to several studies and research work on wealthy people from all around the world, it is now proven that if you are financially free, then you are more happier than those people in your age/income group who are not financially free.
Of course, Money cannot buy happiness. But still, up to a certain level of happiness, Financial Security is very important. Most of the people are scared of being broke or even bankrupt after their retirement or even before that because of the heavy debt.
In USA, most of the people worry about their debt while sleeping at night rather than Heart disease and diabetes. This is the scenario of people from everywhere around the world. But people that are Financially Free are not worried about these kinds of financial uncertainties and that’s why they are more happy than others in the same age/income group.
Financially free doesn’t mean that you should be a millionaire or multi-millionaire. It means that your monthly Passive Income from your various Investments such as Stocks, Bonds, Gold, Real Estate & Businesses is much more than your monthly expenses. Thus, suppose even if you stop working today, you can live for the rest of your life on the Income you generate from your Investments.
This is known as Financial Freedom. And Believe me, if you really want to be happy in your life then first of all, become a Financially Free.
Do You Have Clearly Defined Financial Goals?
Do You have a Clearly Defined Financial Goal?
What will be your answer if I were to ask you the above question? Many of you will say “Yes”. Many will be confused while many will answer “No”. Now What if I ask you this, Do you have a Clearly defined daily, weekly, monthly, annual, and lifetime financial goals?
In this case, most of the people will answer “No”. That’s because most of the people don’t understand the importance of daily, weekly or even monthly financial goals. But according to one survey, If you ask this question to the millionaire households of United States (USA), then most of the millionaire households will answer this question with a “Yes”.
Wealthy people have clearly defined set of daily, weekly, monthly, yearly, and lifetime financial goals. The key of becoming rich is that you should have clearly defined financial goals.
Just tell me that how many of you sit down every week or a month with a sheet of paper and pencil and write down your financial goals? But those who clearly define and write down their financial goals on paper become more wealthy than those who don’t set any financial goals at all.
In order to become a financial success, you not only have to work hard but also you have to focus on where you will manage your money. You will have to focus on managing money well, if you want to achieve financial freedom.
And you can only manage your money well by having clearly defined financial goals on paper.
Credit Cards of Millionaires
Credit Cards of Millionaire Household Members
One interesting survey done in USA on literally several hundred millionaire households. And according to the survey, here are the top 5 Credit Cards that millionaires love to own.
But before reading further, just guess which credit cards millionaires in America prefer? Of course, you will say that after all they are millionaires so they will prefer American Express Platinum, Diners Club & Carte Blanche credit cards, right?
Although, This is not true. Most of the millionaires are money savvy and they prefer simple and cheap credit cards just like regular households in United States. Here is a List.
Choice: 1 Visa
Choice: 2 Master Card
Choice: 3 Sears
Choice: 4 Penney’s
Choice: 5 American Express Gold
Only less than 5% of Millionaires in USA prefer to use luxurious and high cost credit cards such as American Express Platinum and Diners Club.
Lack of Financial Education is the root of all the bad money habits. Most of the people think since childhood that Rich people use luxurious credit cards. And the reason behind developing this kind of thinking is their parents. If the parents are high Income but low net worth group of people then it is very likely that their children will develop bad financial spending habits.
Children of High Income but low net worth group think that rich people use luxurious and expensive credit cards. And that’s why they grow in age, they buy those luxurious credit cards.
You will be surprised by knowing that less than 5% of millionaires use those luxurious credit cards. Then who is using these luxurious credit cards? Well, these are the high income but low net worth group (Upper Middle Class) of people.
High Income Low Net Worth
Most of the people in our world consider high income, the high net worth. I mean most of the people around the world consider their income as wealth. And this is the reason behind their financial struggle.
In reality, Income & Wealth are two different things. Income is something that you make every month from your job and Investments such as Interest, dividends, capital gains, rental income, Business income… etc… while the Wealth is something that you accumulate.
High Income people are not necessarily wealthy people. Because most of the time, to realize the high Income, you have to pay more in taxes and thus compromising with the wealth.
Let us discuss 2 examples of Mr. Smith & Mr. Eric. Smith earns $ 90,000 a year while Eric earns $ 200,000 a year. Even though Eric earns more than twice that of Mr. Smith, the net worth of Eric is just $ 600,000 while the net worth of Smith is $ 4 Million.
You will now ask this; what is the reason behind this much difference in wealth? Even though Smith earns much less than Eric, his net worth is 6.5 times more than Eric.
That’s because Eric is just a high income but low net worth person. He spends most of the money he earns. And on the top of that, to fuel his luxurious lifestyle, Eric has to realize more income every year and thus he has to pay almost twice as much on taxes than Mr. Smith.
Smart people are those who pay less in taxes (Legally) and accumulate more wealth. Wealth has to be accumulated. If you don’t accumulate it, you can never be rich and wealthy.