We all have those moments when we wonder whether or not we are going to make it, are we on the right track, have we done the right thing? This is essentially human and could be turned into a force for good if we harness it correctly. We are talking about self-doubt.
Sooner or later we are all going to be confronted with some degree of self-doubt over a stance we have taken, something we said, or actions we have put in motion. Was it the right thing to do? Doubting yourself can be self-destructive. The worst enemy of getting ahead in life is self-doubt. It will hold you back and make you lose good opportunities that you should otherwise have embraced. It can also adversely affect your ability to build rewarding social relationships.
Anyone who claims they don’t experience moments of self-doubt is surely fooling themselves. Some people have very confident personalities and may not often concede that they have concerns about themselves. On the other hand, people who are timid and lack self-confidence may doubt themselves a lot more often.
So, in part, the degree of self-doubt you experience in your life can be a personality trait. Alternatively, it may be a result of your environment. If people are constantly put down and belittled, either by an overbearing partner or perhaps at work, they may begin to doubt themselves and their validity, more and more.
Ask yourself why? Once you understand where your self-doubt comes from and why it affects you the way it does, you are already on the path to overcoming this state of mind. So, go ahead, ask those searching questions, dig deep and gain a better understanding of why you are letting self-doubt affect your mental wellbeing and diminish your self-image.
Next, you need to actively develop a positive response and set up steps to overcome your lack of self-assurance and your insecurities.
Stop comparing yourself to others, celebrate the fact that you’re different.
Overcome your fear of failure
Start to believe in yourself
Rely on your own innate wisdom and your instincts to guide you
Don’t dwell on mistakes of the past, just learn from them and move on
Don’t fear the risk of failure, instead, fear the absence of progress
If you are feeling negative, tell yourself to get over it and move on
Don’t worry that people might judge your performance harshly, just do your best and be proud of yourself
Write down a Pros and Cons list when conflicting over a good opportunity that has come your way. If you go for the opportunity, what is the worst that could happen? What is the best that could happen? Rein in your self-doubt by logically exploring the best and worst scenarios to discover that in fact, often there is more in the gains column than there is in the loss column.
Confide in a friend or someone you love. Tell them your doubts and fears and get some dispassionate feedback. Talking about it and gaining new insight from someone else’s perspective can be invaluable.
Turn your negative thoughts and insecurities into something positive. Go to seminars and workshops on how to harness positive thoughts and optimism to power you forward into a more successful life. Learn how to dispel negativity and focus on the positive.
Use failures and setbacks as lessons to guide you on how to avoid the same mistakes. This is how we all gain experience and become more successful in the future.
When you have achieved a milestone that you wanted, make sure you celebrate your success. This will boost your motivation to grasp other challenges and it will improve your confidence.
When you have learned to embrace your own strengths and good qualities your insecurities and self-doubt are able to fade into the background.
None of us are perfect, so you are not alone. When you start to recognize your better qualities and learn to love yourself despite a few imperfections, you are on the path to a more positive and more fulfilling life.read more
Five Key Techniques For Coping With Bad Times
Sometimes it feels like the universe has given us everything we’ve ever asked for. But other times we get so down and exhausted by the hurdles thrown at us we feel like crawling into bed and pulling the covers over our heads.
It may sound trite, but there’s no escaping adversity — everyone, sooner or later, has to face it. The secret is how some people cope with seemingly endless difficulties — illness, the death of a loved one, job loss or divorce — or all four — and somehow get through it and end up smiling. How do they do it, you ask? We’re here to offer a few tips for coping with the profound trouble’s life tosses your way. Next time, think of these suggestions and you’ll see your way out of adversity more easily.
1) Remember That Everything Passes: Even the worst. It may sound like cold comfort, but the worst issue you face will, in fact and eventually, pass. You’ve lost your job — you will get another, and in the meantime make economic adjustments at home. No matter how much adversity tries to knock you down, once you really understand the problem, get on with the business of finding solutions. And don’t forget: ask for help when you need it.
2) Discover Your Sense of Humour: Finding reasons to laugh, even simple ones, puts a smile on everyone’s face. Watch cat videos online. Spend time with a special friend who makes you laugh. There may be no humor to find in the problem you’re facing, but there is humor in life. Distract yourself even temporarily by laughing, and you’ll feel better instantly.
3) Take Inventory Of Where You Are: By that we mean you need to take stock of your life, of your strengths, weaknesses, talents and other qualities. Adversity gives you the chance to employ your life skills, and develop them further. When we think about problems in the abstract, we imagine we would never be able to deal with them: a breakup, perhaps, or the death of a favourite pet. But then it happens, and somehow, you cope. Maybe not well at first, but eventually you figure out how to live, and live well, in spite of what’s happened. And that helps brace you for the next hurdle.
4) Seize The Chance For Change: Okay, so your partner dumped you. It’s tough, but no matter how long you two were together, your new status presents the opportunity to embrace change. Think of all that’s available to you in your new circumstances, and go for it. Do some silly things, like get a new haircut or take up a hobby — anything you couldn’t do as part of a couple. Just don’t sit at home stewing.
5) Never, Ever Give Up: Especially on yourself. Adversity comes to everyone, so understand it’s not something you did, or asked for, or are to blame for. Think of all your qualities that people love, and have helped you get where are today.
Every successful person on the planet has faced adversity — try reading about Oprah’s childhood, then think of all she’s overcome. Or Walt Disney. Did you know he was let go from a job early in his career for lack of creativity? Can you imagine!?
Our point is that adversity comes to us all. Now it’s time to handle it, and get on with the business of living your most fabulous life. You can do it!read more
Remember when you were a child and people told you, you could be anything you wanted to be when you grew up? That was a great feeling in knowing that if you worked hard enough, you could be awesome. The problem is that as we grow older, we begin to doubt ourselves. We seem to put ourselves in a second class of citizen in which we will never measure up to those that have achieved greatness. It is not the fact that we cannot achieve our goals and live an awesome life. It is the mere fact that we doubt our abilities for too long and begin to believe we will never amount to anything. It is time to shed those negative thoughts and begin to live the life you have always wanted.
Tell Yourself You Can Do It
Positive thinking is a powerful tool you can employ to help you achieve greatness and stop doubting yourself. You deserve a chance to live the awesome life you want and negative thinking will only drag your down. Remember that little human that was so amazed at the thought of becoming anything they want to be. Recapture that imagination and begin to dream once again. You still have goals, dreams, and aspirations no matter what age you are, so tell yourself you can do it and even if no one else believes in you, believe in yourself.
Never Compare Your Journey To Anyone Else’s
Comparing yourself to another is the quickest way to drain your confidence. It is so easy to look at another successful person and make comparisons. However, you must remember, you are merely seeing what that person wants you to see. You cannot see into their lives apart from the surface. You do not know what they have gone through to get to where they are. You cannot fathom the challenges they may have had to overcome, so it is irrelevant to compare your journey with theirs. We all have our own personal setbacks and obstacles we have to overcome, so avoid comparisons at all costs.
Goals are not met all at once. For instance, if you intend on losing 20 pounds for better health, you will not simply exercise once, jump on the scale, and hope that 20 pounds will be there. The goal of losing weight is not measured in one setting, but by achieving small goals throughout the journey.
Set small goals for yourself that are easier to achieve than the ultimate larger goal at the end. Consider your journey to an awesome like as a set of stairs. You cannot possibly jump up an entire flight of stairs, but by taking each stair one at a time, you will reach the top no matter how many stairs you have to climb to get there.
Document and Celebrate Those Achievements
Write down what you want to achieve as an ultimate goal along with your small goals along the way. A great way to do this is along a time line. Use a marker to fill in the time line as you go and when you reach a small goal, have a little celebration. Do something just for you and enjoy being in the moment of accomplishment.
Put Yourself Out There
You can do a lot of good in the world, but first, you must climb over the hurdle that tells you to stay inside and not talk to anyone about it. The world is a big place and it is full of amazing people. Going out and finding those like-minded people is essential for you to reach your goals. Networking with those who have similar goals will allow you to have more opportunity to achieve your overall goals and become the person you want to be.
Do Something Out of the Ordinary
A routine is a great thing to have, but when that routine leads you into a rut, there is a problem. In order to make your goals and live your awesome life, you need to get out of the ordinary and make it happen. Do something you have never done before. Go on that vacation of a lifetime, drive a racecar, or try bungee jumping. Anything you can do to shake up the routine will help you live a more fulfilled life.
You are an amazing person. Keep repeating that to yourself until you believe it. We are all amazing if we let ourselves be. Remember, you are truly unique. No one in the world has your exact look, fingerprints, eyes, nose, or any other attribute that makes you. It is time to celebrate who you are and go after that awesome life. You are amazing and you can do great things. It just takes you believing that to achieve your ultimate goals.read more
Every new human being comes with a hidden talent or some special skill – they just need the opportunity to discover what that is. We are all special in one way or another. With some children, their talent is quickly revealed when they demonstrate great passion for something and quickly excel at it. For other children, though, lack of opportunity can mean it takes much longer to discover their special ability or interest.
A child who can be involved in something they are passionate about experiences a great sense of satisfaction and a sense of accomplishment. This positive feeling of achievement bolsters their self-confidence, promotes a sense of inner peace and increases their level of contentment with their little world. With a robust level of mental well-being, children can do better in other aspects of their lives and it helps build rewarding relationships with family and friends.
It is important to discover what activities stimulate your child’s involvement the most. They don’t even have to be superstars to experience the benefits gained by actively pursuing their interests. Participation itself is what is important. Being involved in a favorite sport, singing along with the choir, learning a new instrument, collecting stamps, experimenting with recipes in the kitchen. All these activities demand the child’s full attention and make them happy and engaged. Happy kids are calm, more relaxed and cooperative. Anxieties are diminished and often their schoolwork and their sleep patterns can benefit.
Childhood activities can flow on to adulthood vocations. Expose your kids to all kinds of activities and learning experiences while they are growing up – who knew little Johnny would be a brilliant guitarist? How surprising when little Wendy became a surfing champion? How amazing that little Phillipe grew up to be a celebrated chef. And what about Georgia? Where were the clues that she would become a gardening host on a successful television series?
Parents often have a sense of what might capture their children’s interest and should expose them to activities that might resonate with their personalities. Understandably, an expensive hobby may out of reach for many families. Not everyone can afford years of music or singing lessons and a grand piano in the salon! But the parent can consider their budget and guide their child to suitable interests within their reach.
Despite parents saying they know their child and what he might enjoy doing, yet the little fellow can still surprise everyone. A chance experience with a new sport or unusual activity can quickly become a passion that the child can become very excited over. For the well-being it promotes, it is great if the parent is in a position to support the child’s new interest and enable his participation.
With success in pursuit of their passion, youngsters can benefit from the positives it brings to their lives. It fortifies their self-image and develops their feelings of self-worth. This can translate to success in other aspects of their lives and helps promote better interpersonal relationships right into their adult lives.read more
When we find time hanging heavy on our hands, we can feel discontented and restless. Many of us head for the fridge to find something stimulating to eat. After all, boredom is simply a lack of stimulation, so a tasty snack provides a momentary lift. This reaction to stave off boredom, however, can lead to long-term health issues if it happens too often and contributes to an increase in weight.
So, what is boredom? It’s a state of mind that arises when there is idle time with nothing interesting to do to help pass the time. We can feel listless and unenergetic. The best solution when we’re in this situation is to channel that lethargy into something productive. We should find something interesting to engage in, to make ourselves busy.
For some people, a downtime when there’s nothing going on is very welcome. They grasp the opportunity to just relax. Relaxation is an activity in itself, that helps us de-stress and chill out. Their relaxation may include enjoyable passive activities like meditation, watching TV, reading or just resting. Relaxing and embracing some quiet time without demands besetting us from all sides can have positive results on your health and can foster a positive state of mind.
However, for others, downtime and periods of inactivity are just plain boring. Many people have a higher need to keep their minds stimulated and busy to maintain their sense of wellbeing. For these individuals, the best thing to do when boredom looms is to get active.
When you find yourself with time on your hands and nothing to do, ask yourself what you would like to be doing? What is something you‘ve always wanted to do and never got around to? Was it learning a new language? Was it building children’s wooden toys? Did you always have a flair for sketching or painting but never got a chance to explore this talent and learn more? Did you always want to establish a vegetable garden? Is now the time to develop your own keep-fit routine, join a gym or take up a sport?
You could consider the idea of taking up volunteering. The benefits here are for both the cause you are volunteering for and the good feeling you experience in being involved in something worthwhile in your spare time.
Search your mind for activities that have eluded you in your busy life and make a quiet determination to give it a try. Try not to plunge headlong into something new with great expectations and impossibly high goals right at the outset. You are more likely to develop a new interest if you ease into it slowly and sensibly. Dip your toe in the water to get started. Set small targets and you will be encouraged to continue when you reach more modest milestones as you continue to meet your new challenge.
Turn boredom from a problem into an opportunity. When people develop new skills or embrace new activities when spare time hangs heavy on their hands, they can open up new, unexpected opportunities for themselves. Many people develop whole new careers from hobbies or activities that they have developed a passion for.
If you take up volunteering when you have too much time on your hands, maybe because you are unemployed, people notice your involvement and when a paid role opens up you could be the first person they turn to for recruitment. If your artistry skills develop well in your downtime, you may end up in an exciting new career. If you wrote a book, you might become famous.
It’s always a benefit to both your physical and mental health if you can dispel negativity in your life. Boredom is a state of negativity. Your newfound activity may prove very therapeutic, contributing to a healthier state of mind and a more positive outlook on life. This will translate to better performance in your working environment and more positive interpersonal relationships.read more
Leaping out of bed and boldly embracing the new day may not be how we all start our morning. Yet, a positive start to the day is a good omen for how your day will unfold. If we crawl out from under the covers and drag our way around the kitchen and bathroom, reluctantly preparing to confront the coming hours ahead, how can we expect to get the most out of our day?
On the other hand, starting out in a positive frame of mind will help ensure the rest of your day will continue to be pleasant and fulfilling. How can we shift our outlook from reluctance to enthusiasm?
First and foremost, a good night’s sleep is a great foundation for a feeling of well-being to get us through the day. People can turn to tried and tested methods of ensuring a better chance of gaining a good night’s sleep.
Try practicing meditation before bedtime. It will settle you down, bring on a feeling of calmness and a sense of equilibrium. It will help you relax and empty your mind of the day’s clutter and help you let go of any traces of negativity or anxiety.
Also, first thing in the morning or at odd moments during the day, an ideal way to encourage calmness and improve focus is to relax and practice a little meditation. Another strategy to improve the enjoyment of your day is, if you can find a few minutes in your busy schedule, to pause and relax in quietness and reflection. The stillness of these precious moments will instill a greater sense of appreciation and improve your capacity to cope with the daily demands of living.
Another excellent strategy to own your day is to prepare a schedule that incorporates everything that you need to achieve that day but still allows room for some leisure time. Working your way through your planned schedule can provide a sense of accomplishment when you achieve your daily objectives and the time set aside for leisure helps make the day enjoyable. Running your day to a sensibly planned schedule can help dispel any chance of that depressing grind you feel when you procrastinate. Get stuck into the tasks on your list and at the end of the day, feel great about your accomplishments!
Many people increase the pleasure they experience during their day when they pat their pets. This is a sneaky spot of leisure time that you can easily slot into your busy timetable. Interacting with an animal companion is a scientifically proven method of encouraging feelings of relaxation, pleasure and a sense of calm.
To liven up your day with positive experiences, take the time to explore your senses. Spend time in a garden enjoying the perfumed smells, hearing birdcalls, and taking in the sensory blast of colorful foliage and flowers. Time outside can really make you feel more alive.
Be sure to actively discard, expel or avoid any aspects of negativity during your life. Always think positive and only associate with like-minded companions. To feel great during your day, practice random acts of kindness. Think of someone else and do something to brighten up their day, even if they are a complete stranger. It may be just a small gesture but it will be deeply appreciated and both of you will feel good.read more
Taking the plunge into working for yourself can be daunting for some but it can represent an exciting challenge for others.
First, you need to take stock of your personality. You know yourself better than anyone. Does the thought of being your own boss, determining your own working hours and drumming up business sound exciting and achievable? Or are you better suited to the structure of a job where your hours, your duties and your remuneration are reliable and predetermined? The world needs both types of people and both can be winners.
However, working for yourself carries a greater level of risk than a steady job working for an established business. There is room for failure if you don’t pay attention.
When you are a sole-trader, you need to perform all roles; find customers, create/supply your product/service, do the book-keeping like billing clients and paying bills, take care of all the administration, manage taxes, meet with the bank, organize insurances, look after promotions and advertising, among other tasks.
An important early step is deciding where you will operate from. A laptop in your bedroom? A home office or study or that spare bedroom? Off your kitchen table? Piggyback off a friend or relative’s work premises? Rent a serviced office? These decisions will depend on the nature of the work and your financial means but they will impact on your performance as a self-employed worker.
One of the critical keys to success, when you are running your own business, is structure. Set-up your working hours program and stick to it. An important asset that will help you succeed is discipline. Don’t let your working day get frittered away by distractions like day-time TV or extra-long lunch breaks.
A vital skill you must master is successful time management. This goes hand-in-hand with the structure you have devised for the running of your business and finding the best efficiencies as you progress. It may be tempting when you are working for yourself to put in long hours and skip days off. After all, the harder you work the more successful you will be? Not necessarily. You need to learn how to plan well and work smarter, not work harder.
Good time management will ensure that you complete your work tasks in a timely fashion to bring in the money, but allows time for relaxation and family time. There are courses and training that you can opt for, to develop this skill.
There are several areas of training you should invest in when you set yourself up to work for yourself. Contact your local chamber of commerce or small business council to see what is available for small business owners. A lot of material is supplied free and they are usually short courses aimed at a basic but comprehensive level for anyone to understand.
One area of expertise you should master is the basics of financial planning. You need to be able to forecast your trading activity for the year in advance, including expected revenue and expected expenses, to formulate your expected profit. This can be valuable planning for when you seek funding.
Other valuable information is often free or inexpensive, like some basic training in marketing and promotion. Learning the most successful marketing methods can make the difference between your growth and expansion, or failure. If no-one knows what you have to offer, then you will struggle to make your business grow.
You will also need to pay attention to your trading ethics. Does your business have a mission statement or charter of quality? Paying attention to the quality of what work or products you provide is vital in building an ongoing business. It will mean the difference between an unsatisfied customer who never comes back or the successful building of repeat business. When the client learns to trust you and the quality of what you provide, they keep coming back and they recommend you to others. This is the most valuable form of promotion you could ever wish for.
Excellent customer relations translate to repeat business. Advertising and the promotion of your business functions to attract new customers, and it certainly costs money. But if you don’t treat people right and win their repeat business you are forever stuck with having to chase new customers. It is much more cost-efficient to build repeat business and reduce your need for running up advertising costs.read more
Self-doubt can be the single most destructive vice that blocks you from achieving your life’s set objectives and success. But what if I tell you can turn that negative energy into positive energy?
Yes, that compelling voice that hinders your personal development and stops you from developing and seizing opportunities in life can be tamed. Self-doubt will slow you down and prevent you from getting started with projects and life activities/tasks. Sometimes you will end up not finishing the tasks you are working on for fear that they are not of the quality you wish for.
How you develop in life entirely depend on how you can soberly remind yourself of your self-worth, and eliminate your current limiting beliefs.
By using these strategies, you will quickly turn your self-doubt into positive energy.
1. Identify the problem
First, you need to identify the problem. Identify what makes you doubt yourself, what triggers the doubt. You risk addressing the symptoms instead of the root cause of your self-doubt. This is the critical stage of your journey to embracing your self-doubt. Discover what makes you tick and work on yourself.
2. Take Quick Action
Once you have identified the triggers of your self-doubt, the next thing is to instantly act on them. When you doubt begin to show, you must move quickly to subdue them. Don’t let your triggers come out and push you down or make you look down upon yourself. Fight that doubtful person inside you, talk to him/her. Think about the things that lead you to negative thoughts and quickly drive them out of your mind. By so doing, you will avoid the thoughts that cause you to doubt yourself, keep practicing this and make it a habit.
3. Think of the Good Old Days.
When you are hit with self-doubt, try and look back at those days that you did something successful despite doubting yourself. Most likely, you have memories of the past instances where you performed outstandingly well despite second-guessing yourself.
Reminiscing about what went well in the past will make it easier for you to avoid worrying about your ability to perform the task ahead of you. It will help you dismiss your doubtfulness to channel all the energy on the activity you are handling. Focusing all your energy on the task ahead of you will most probably give you a positive outcome.
4. Open up to someone
Sharing what is haunting you or what limits your success is a good way of letting the steam off. A problem shared is half solved. Your friend or family member will often give you a different perspective of things you most probably would have overlooked. When we are in a stressful situation, we usually tend to undervalue our abilities; thus, getting a second or third opinion from someone you trust is beneficial.
Keeping your thoughts to yourself will only lead to distorted, meaningless, and unreasonable conclusions. Opening up to a friend or a professional will help shed some light on certain aspects of your life that you often overlook.read more
The year 2020 will forever be remembered. Unfortunately, not for good reasons! Hundreds of thousands of jobs were lost in this year. Brick-and-mortar business was the hardest hit as a result of the pandemic related restriction.
But despite the gloomy year, there were a lot of lessons learned from the experience. As service delivery and jobs went online, it was a lesson to many on leveraging the internet’s ability and working from home. This is the dream of any freelancer.
The biggest takeaway from last year’s events is that it is important to learn how to create the life you love without necessarily working from 9 to 5. Is this even possible?
Yes, you can still pay your bills and meet all your daily needs without necessarily being employed or working for someone from 9 am to 5 pm.
How can you liberate yourself from a 9 to 5 job and still live a happy life?
Whether you need to retire early or you need freedom, you have to strategize early. Make a clear path for your exit way before you “fire your boss”.
How can you do this?
Here are some essential tips that you need to keep in mind when working your way out of the 9 to 5 job.
Identify what you love.
To many, escaping the traditional 9 – 5 job means getting right into doing freelance jobs. Yes, this is the quickest way out. But how do you make sure the freelance work will make you happy and still pay your bills? This is the big question.
It is important to choose something that you love doing. Something that you would still do even if you were not being paid to do it. That way, you will enjoy every single day of your journey to financial freedom. Once you have found a way of monetizing what you already love doing, you will never work a single day. Every day you wake up will be unique, because you will always be looking forward to doing that task.
Make a plan
Always plan. Escaping the 9 to 5 jobs means that you are now your won boss. You will realize that you are the hardest person to manage because you will always do what you want or feel like doing instead of what you ought to be doing. Therefore, creating both long-term and short-term plans will help keep you on track.
Sharpen your skills.
Traditional jobs would sometimes offer you the training and grow your career. The same applies to working for yourself. Since your biggest asset is your skills, it, therefore, goes without saying that you need to horn your skill. Sharpen your skills and try to be the best in your niche.
In the current highly competitive world, you need to work on your skills to stand out from the rest of the freelancers in your space.
Evaluate yourself: do a SWOT analysis on yourself.
Before going full-time on a freelance or any personal business venture, you have to do a detailed Strength, Weaknesses, Opportunities, and Threats (SWOT) analysis of, the business, and your skills. Look at what you can do best (your strength), where you need improvement and further training (your weaknesses), the low-lying fruits (opportunities) and the threats (competition).
Once you have a detailed analysis of these four factors, you will establish whether you need to fire your boss or hold on to your job for a little while.read more
The path to wealth may feel like a journey fraught with peril. Often it seems that no matter how hard you try to improve your lot in life there are obstacles at every turn. There are tons of books and courses that will ’teach’ you a sure-fire way to get rich. There are get-rich schemes that ‘everybody’ succeeds in, except you. It’s difficult to sort out the truth from the garbage.
Your parents taught you the golden rule; buy a house and live in it for thirty years until it’s paid off. Meanwhile, keep your spare cash in the bank. That’s the way they got ahead. Really? How rich are they now? Is that the modest level of wealth you are aspiring to?
Then there’s good old Uncle Bob who will spout knowledge on getting rich at the drop of a hat. But why is he driving a beat-up old car and living in a little, cheap rented unit? Don’t take advice on building wealth from someone who isn’t rich.
In order to actually succeed in building wealth, you need to stop getting advice from your broke uncle or your struggling neighbor, after all what do they know? In fact, there are a lot of timeworn ‘rules’ on getting rich that you need to break or totally disregard.
Have you ever considered investing in the stock market? Now there’s a good place to turn a large fortune into a small fortune if you follow the traditional rules. Go with the herd, buy when an asset is rising, like everybody else, they say.
Was it Martha Stewart who proposed that the path to wealth was to stop running with the masses, go against the tide? The essence of this advice was that you buy promising stocks when they are going down to rock-bottom, when nobody wants them, and wait for them to rise. That is when the herd will jump on board. Too late. They won’t make the biggest gains, like the rebel who bought when the stocks weren’t worth anything.
There are good rules that help people manage their money better. Eliminate or pay down bad debt, which typically is consumer debt. Better still, avoid consumer debt like credit cards and pay-later lines of credit. The only debt that can lead to wealth is borrowings for assets that increase in value beyond the costs of holding them. Like real estate that appreciates. In this way, you can leverage ‘good debt’ to build wealth.
Say good-bye to your parents’ rule of living in your house for thirty years until it’s paid off. Develop a plan to pay down your home loan twice as fast, which is quite achievable on a regular salary. It just requires good planning and discipline. Then you can upgrade to a nicer home in a more desirable neighborhood, rinse and repeat.
Better still, buy three solid properties in good growth areas and rent them all out. You can live anywhere else, maybe travel around, or even live at your parents’ place while your tenants and the tax advantages pay down your investment mortgages.
But with investment properties, be sure to break the golden rule of ‘negative gearing’. Don’t do it!
Inexperienced or uneducated people who expect to get rich with investment properties can be drawn into a trap when they ‘negatively gear’ their properties. Everyone will tell you that it is the golden path to wealth, including your accountant. He stands to earn plenty from preparing your portfolio tax returns every year.
As well as your accountant, the real estate salesman gets richer, the financial lender earns interest and fees and your property manager makes a nice sum. But you earn nothing, you are operating at a loss. You will find yourself spending more and more every year just to keep the properties. You need to meet the difference between what rent comes in and what the actual mortgage payments are, pay the insurance and property management, repairs and maintenance, city rates and possible land tax. There could be a token tax refund for your costs but a tax refund only occurs if your costs can reduce some of the tax you have already paid.
Remember, nobody ever accrued wealth by making a loss.
Then there is another rule you might have heard from your parents. Keep your savings in the bank, as they did. There are many better ways you can make your money work harder for you. You need to do your research, attend a few seminars and put it to work earning bigger returns than a bank savings account will ever provide.read more