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Can abundance of money solve your financial problems?

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Too much money is not easy to handle. 

There is a general belief that having more money keeps you financially safe.  In fact, too much money can multiply your problems .If you can search the net, you’ll find a long list of famous people who lost it all in spite of having plenty of money.If more money had solved their financial requirements, they wouldn’t have landed in such a soup. Money disappears fast from people who don’t handle it carefully.

For example, take the recent case Mr. Vijay Mallya whose kingfisher brand is nothing due to heavy losses. Will his problem be over even if banks lend another 9000 crores? No. These are people who had a lot of money at their disposal but, somehow failed when it came to managing it and creating wealth  – as a result, they’re unable to come out of the financial troubles they’re in. The key issue is in efficiently managing your finances – be it a few thousands or billions.You cannot solve financial turmoils with more money.

But, you can definitely solve your financial problems by doing something different from what you were doing so far. The idea is to change the way you deal with money by making changes in the way you think about money. You have to think about the importance of spending more wisely ( what some people tend to forget as they get more money) and retain more savings and how to invest more smartly so that your money keeps working for you.

Basic principles:

The first step towards a better financial future is to be aware of certain very basic principles of money management  –

  • To Live within your means
  • To Save more and control expenses.
  • Learning the effects of Inflation
  • Utilizing the compounding effect
  • Keeping yourself insured
  • Having a budget for everything ..etc

Whether you are an individual or a big corporate, the basic principles remain the same as mentioned above. A successful corporate entity will have all these requirements in place- they will not spend above their means, will take only calculated risks, they would try to save more through cost cutting measures, invest the surplus effectively, protect their assets with adequate insurance over and will have a budget and a backup plan for everything.

The same logic applies to finances of an individual also. By keeping up with these basic principles, you will be in a better position to manage whatever money you’ve got and be financially safe.So, unless you have knowledge in managing money, you will continue to have financial problems – no matter how much you’ve got.

Key ideas :

  • Abundance of money cannot solve financial problems.
  • Reckless handling of money is the reason for financial turmoils.
  • Be it individuals or big corporations – The basic rule of handling remains the same – Be wise with money.

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