Make Sense Of Your Finances

The reality is money comes and goes; what is more important is how you handle your funds. Long time ago when I was learning how money works; the rule of 72 was an eye opener. The rule of 72 is a simple way to determine how long it takes your funds to double; it’s based on an annual interest divided by 72 which will equal the number of years it would take to see some real growth overtime. As an i.e. let’s say a 1K investment at an annual return of 1.0{db3ae8a81280553779663c6dc431a922c9e5ce920863bf636bccd15cfbaaca0d} which is more than what your bank is currently paying; it would take 72 years for your funds to double. (72/1=72 years). The money will grow to only 2K over a 72 year period.

Now, take that same 1K invested properly in the financial markets at a rate of 10{db3ae8a81280553779663c6dc431a922c9e5ce920863bf636bccd15cfbaaca0d} which has been the average historically, it would take 7.2 years for your funds to double. So, in that 72 year period you would have 10 doubling periods or $955,594 just a little under 1 million dollars; not bad for 1K. Have you ever wondered why local and national banks have plush atmospheres and marble floors to walk on? We must learn how to manage our finances; budgeting, spending, and saving; are all part of being wise responsible stewards.

Over the years, many of us have made mistakes with our money; whether through extended credit, bad financial management, being buried in debt; or by being ripped off by different financial advisors’ or scam artist. To make sense of our finances, it takes discipline to do the right thing and refrain from frivolous meaningless bad habits. Over the last several weeks with this Corona virus pandemic, I have seen people spending their hard earn cash foolishly; buying more than what he or she would usually need on any given day. The world is not coming to an end. Spread your funds across the table and get what you need to make ends meet. It should not take a crisis to get our attention with our finances, this should be a year around process on how to manage money properly.

It is during times like these that grabs our attention to slow down and to think things through before we act on impulse. Also, this is another way God gets our attention; for those of us who believe He is the true and living God. He is in control of this whole situation and has the whole world in His hands. The goal of every person when he or she comes into the knowledge of how to manage their finances, should include but be not limited to: the purchase of life and health insurance products, have legitimate sources of income streams through the diversification of multiple assets, owning real estate, have a basic understanding of how to buy low and sell high or at least break even; or make a profit with whatever business venture you may engage in. Last but not least, be advised by trusted reputable professional financial advisors’ to help manage large financial portfolios’.

The truth behind money is knowing how to manage it properly and living within our means and being at peace in mind, soul and spirit. We have to learn from our mistakes and errors and be a blessing to others who may lack both finances and the knowledge on how to have more than enough. Share your education with others to help them change their mindset from a poverty thinking mentality to help increase their wealth accordingly. It is time to let your money start working for you; instead of working for the money!

Pungky Dwiasmoro Hiswardhani

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