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Personal finance lessons
Learn from the experiences of others!

These personal finance lessons are a collection of thoughts and comments of various persons about their experiences with finances followed by our observations.

We'd like to point out that these are not in any particular order regarding timing or importance.

1. Emergency funds are essential

This lesson comes from an article titled "Personal finance lessons learned from Monopoly" and concludes that emergency funds are as important in the game of Monopoly as they are in real life and the only difference is that in real life there are more emergencies that in Monopoly.

Before beginning out financial planning my wife and I had no idea of how important it was to have this fund until we became aware of the number of unforeseen events which can happen and for which it was evident that we would need money to deal with them.

For this it is important that you analyze your own situation and that you are thinking of creating a fund for whatever event might happen.

2. Life mean relationships

This lesson also comes from the article mentioned before and mentions that business owners build networks of other professionals such as lawyers, financial advisors, bankers and others because they know that these will be needed at some time.

We are totally in agreement with this lesson.  Whether you are planning your personal finances or beginning you business, you will realize that you will need a variety of expertise which you may not personally have.  Of course, you may wonder why you should pay someone for advice instead of learning to do it yourself....

This is simply because it is more efficient to use someone who already has the education and experience to help you. In other words, when you are paying an accountant, a financial planner or a lawyer, you are paying for:

  • professional quality work based in part on knowledge and his experiences and
  • for the freedom of not having to do these things yourself, saving your time for other activities more important

3. Every time your buy something you sacrifice a bit of your dreams

This lesson come from an article called "Personal finance lessons that rocked me like a hurricane" and, in essence say that every frivolous purchase is a voluntary choice to postpone your dreams.

It also concludes that you should keep your dreams in mind each time you pull out your credit card to pay for what you're buying and ask yourself if what you're buying really with worth giving up part of your dream for.

In our opinion it is sometimes complicated and contradictory when our dreams and personal actions are involved.  For example, the dream of retiring young and financially free might be in conflict with your habits of buying the latest technology or the latest style in clothes every time you get you paycheck.

For this, if you believe that your buying habits are or could be a problem, perhaps it will be necessary to rethink these to discover why you have these habits.

On the other hand, life is too short to make every decision based only on how to save money and it may be necessary and healthy to let go from time to time provided that you are not facing any extreme debts.  The key here is to keep everything in balance.

By the way, if you need to save money, please visit 101WaysToSaveMoney.com. This site is for anyone who wants, or needs to save a little
or a lot of money. These 101 ways to save money can be implemented in
anyone's everyday life.

4. Investing isn't just for rich folks, it's for anyone

In this lesson, the writer concludes that anyone who can spend less than they earn can invest and get great profits for their effort.

We believe that this writer wished to say that now days it is relatively easy to invest and even more so using the Internet.  However, we must point out that investing is a lot more than simply buying some kind of investment vehicle.

First, it's about your objectives, risk profile, knowing the demand, markets, the pros and cons of different investment vehicles, etc., etc.  In a few words, investing requires a made-to-measure plan and knowledge about finances.

That being said, it isn't necessary that you have to learn to do it all yourself -- life is too short for that.  On the contrary, review these personal finance lessons (especially the second one), seek professional help and get into action as soon as possible.

5. "It's not always the popular person who gets the job done"

This lesson comes from an article titled "Personal finance lessons learned from famous movie quotes."  Specifically the character of Gordon Gekko from the movie Wall Street, is who said this.

In this article it's mentioned that often it is necessary to make difficult decisions to pay off your debts and, as an example mentions that you may have to give up certain comforts in order to pay off what you owe and that these decisions are not always welcomed by your family.

In our experience, when you analyze your financial situation and you insure that your entire family participates in preparing the plan and their objectives are taken into account (although this may be difficult) you are not necessarily the bad guy because everyone in the family is participating, is committed, and is aware that the decisions are not simply imposed by you.

Share your own personal finance lessons!

If you'd like to share some personal finance lessons you've learned through your own experience, please click here to tell us.

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