Life is often perceived through the lens of impenetrable, compartmentalized boxes. These small, distinct containers house our dreams on one side, finances on another, and perhaps family and work discreetly tucked away in their own respective corners.
This method of organizing life provides a sense of easy management, fostering the belief that everything is perfectly controllable and stable. The illusion persists that if one box is in disarray, it won’t disturb the harmony of the others. As we explore the “5 lessons learned thanks to personal finance” this notion of tidy compartments gives way to a deeper understanding of life’s intricate connections and the interplay of various facets in shaping our journey.
Well, there’s a tiny glitch in this reasoning, and some experts argue the following:
So here let’s dive into the 5 lessons I learned thanks to Personal Finance
Life is complex, and nothing is divisible.
Incredible lessons can be learned from things seemingly unrelated, and wisdom doesn’t always come from expected sources. C’est la vie!
1)CONSISTENCY IS BETTER THAN BEING SMART
When thinking about an innate gift to choose at birth, most people consider two things:
- A particular talent,
- Super intelligence,
If I could I would have chosen to be born with the gift of…Perseverance
Intelligence or talent is a double-edged sword. I know many incredibly gifted people who haven’t achieved much in life because they leaned on their talent like a crutch without putting any effort in anything.
Perseverance, on the other hand, is democratic. It’s potentially available to everyone, but few truly manage to conquer it. And it’s immensely satisfying when you reach the finish line!
Unlike an innate gift, you don’t achieve the result “because it was your destiny,” but because through patience, you’ve made a recurring, boring, unexciting effort, seeing it materialize step by step.
Achieving the goal is not taken for granted, but in the end, you are the architect of your success.
Alas, Perseverance may not be sexy, but it’s fundamental in everyday life and even more so in managing money.
It’s the skill that compels you to go to the gym three times a week, prevents you from eating tons of chocolate when you’re feeling sad, and pushes you to invest every single month without changing your strategy.
It seems crazy how something so underrated has such a significant impact on life.
2)THE DIFFERENCE BETWEEN SAYING AND DOING
Intentions are one thing, actions are another.
People are judged by what they do, not by what they say. Each of us narrates and talks about our better version, building a beautiful idealism of who we would like to be, what we would like to do, and what we would do in certain situations.
Reality, however, consists of actions, the decisions we make when we truly have to choose what to do.
Money management teaches a lot about who we are because it constantly puts us to the test.
What do you do with that $100 found on the street? Do you buy a dress? Do you go play it at the slot machines, or do you put it in a savings account?
The beauty of money management is that it’s a constant training.
How many times in life have you been forced to decide whether to stand by a friend with problems? How often do you decide to give up something healthy for something good but unhealthy? Would you sacrifice something to make someone happy?
Important decisions happen, but not that often. They are rare. Money, on the other hand, confronts us with continuous decisions; sometimes we make dozens every day or even every hour.
3)INVESTING TEACHES YOU WHO YOU ARE
The emotional stress caused by investments is something you rarely experience in life. It’s one thing to think about investing, another to do it with your own money.
In a few minutes, you could experience the excitement of gain as well as the disappointment of loss, all while putting something dear to you at stake… yes, your savings!
Few other things in my life have given me such an emotional rollercoaster.
And it’s because some aspects of investment are challenging to grasp: after investing, there is no control over the markets, and control freaks may find it very destabilizing.
Beyond that, you have to fight many instincts, from self-preservation (not losing money) to greed.
Investing money in the stock market tells a lot about how we are as human beings.
It tells and explains our nature, whether we are cold people or prey to anxiety, whether we tend to procrastinate choices or have the ability to seize the right timing.
It also tells us if we settle for little or just enough, or if we love luxury. And above all, it tells us how patient and willing we are to wait for results.
Until you dive in, you won’t truly know who you are.
4)COMPOUND INTEREST WORKS IN PERSONAL FINANCE AND LIFE TOO
You understand how compound interest works, right?
Compound interest on investments explained easily
One might think that the compound mechanism only works on financial investments, but no, it works for everything.
Okay, with money, it’s more evident to understand how much, but in reality, the same applies to many other things: education, weight loss, physical training.
Think back to when you were kids, even more clueless than you are now, and the benefits of education over the decades.
Learning to read allowed you to read basic books, knowledge of fundamentals opened the doors to more specific texts, making you true experts (where? cut it out!).
Let’s talk about exercise and how you can now do triple the push-ups compared to before.
Well, these are all compound interest mechanisms.
5)FINANCIAL RULES ARE JUST… RULES!
How to manage money? 10 techniques for your finances!
I’ve repeated this concept in different articles, but I didn’t know what to put as the fifth point, so oh well, you get it again.
There are many personal finance techniques to manage your income and expenses and generally distribute your money intelligently.
The problem with rules is that they are… rules! They’re just summaries to create a system that adapts to the most common scenarios. They’re not made to solve your problems but to solve most problems.
Rules exist because they set boundaries on what you should and shouldn’t do.
It’s excellent because many people do whatever they want in any situation, and the best way to get results is to create a system.
If you can’t follow rules, various financial techniques are fantastic because they tell you exactly how to behave; you just have to shut up and follow them, feeling guilty when, undoubtedly, you will break the rule.
But if you can manage money, have optimized processes, and created something tailored to you… financial techniques don’t matter at all.
EXTRA: DO THINGS TODAY, PROCRASTINATION IS STUPID
Conclusion: Lessons Learned Thanks to Personal Finance — Unveiling Life’s Symphony
As we journey through the intricacies of personal finance, a profound realization emerges — life’s compartments are not impenetrable boxes but threads interwoven in a grand tapestry. The five lessons gleaned from managing money extend beyond the realm of finances, unveiling the complexity and interconnectedness of our existence.
From the democratic power of perseverance to the stark contrast between words and actions, the emotional rollercoaster of investments, the compounding effects shaping our lives, and the nuanced nature of financial rules — these lessons echo in the corridors of our everyday choices.
In the witty rhythm of life, procrastination stands as the discordant note, urging us to act today. As the curtain falls on this exploration, the melody of personal finance resonates as a guiding symphony, reminding us to dance through life’s complexities with wisdom, adaptability, and a relentless pursuit of growth.
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