The 9 level of Personal Finance
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Do you ever think about why some people work very hard, harder than anyone, but still live without anything. However, on the other world, there are some young bloods who never work before but making plenty of money without any hard works?
Actually it is hard to answer this question. Many books and expert claim that this is because the mindset or action that taken by them. I don’t know but one thing I believe is the rich or people who making lots of money really do something different because they are in different level of Personal Finance.
Today, I will try to separate the level of personal finance according to risk and returns. I managed to list down 3 categories with 9 level of personal finance.
Primary Category
Level 1 : Saving - Saving can be considered as the basic for personal finance. You don’t have to know any financial literacy but only a budget and saving plan which can help you to save some money out every month.
Level 2 : Insurance - Nowadays there are many different kinds of insurance available in the market. Insurance is a popular tool for financial planning. It not only can help you save and plan for you retirement, some insurance plan also able to protect you and your family and playing an important role while emergency incident happen.
Level 3 : Fund - Recently I found that more and more people talking about buying fund for retirement planning. This is a good idea as most of the funds in the market are coming with low risk but reasonable returns.
Above is the 3 level that can be included in Primary level of personal finance. Its specialty is you don’t have to care and learn about all the complicated finance and investment knowledge because banks, insurance company or fund managers will take care for you. The common benefits are low risk, low returns but steady and high liquidity. If you are looking for security and steady plan, then you should go for this 3 level of personal finance.
Intermediate Category
Level 4 : Stocks and Futures. As the standard of financial literacy going up, more and more people start paying attention on stocks and futures. However, both of them are just like broncos. You need to learn how to control and deal with them, if not you will get hurts. However, once you get used of them, they will be your good friend.
Level 5 : Real Estate. Something that I must make it clear is investing in real estate are purely trading property or land and not buying your house. Real Estate investment is just as hot as stocks and Futures. You can read that everyway in the world would have the opportunities to invest in real estate.
Level 6 : Invest in Artwork or Antique . Not very much people invest in here. You need to have more professional and experience to invest here. You need a lot of modal and its liquidity is low too.
Level 4 to level 6 is under the same category - Intermediate Category of personal finance. All the investment in this category is high risk and high returns. You need some experience, knowledge and some lucks to invest in this category. If you able to take risk, handle risk, leverage on these investments and maximize your returns, then you will become rich and wealthy.　 　
Advanced Category
Level 7 : Invest In Business. Invest and buy a business. If you want to be rich and wealthy, you must learn how to start your own business. This is because business is one of the important elements to support your wealth. However sometimes it is hard to start a business and it takes time too. So one of the best way is invest or buy others business system and run it. If you success, a business will be able to generate considerable income for you.
Level 8 : Invest in Brand. Doing almost the same with Level 7. However there is a small difference. People in this level will concentrate on long term and cover bigger market. By building a brand, they will able to attack bigger market and make their business last longer in the world.
Level 9: Invest in talented people. One of the main job for you as a leader and boss is try to find more talented people and let them help you to make more money. Smart people will always hire people that smarter than them and build a team to work for them. They simply know the theory that team work and cooperation is better than solo. So the highest level in personal finance is invest money on talented people and make them use their knowledge, know how and experience to help you make even more money.
In advanced category of personal finance, people no longer invest in products or other investment tools. Instead, they invest in system, team and people. So communication is becoming the main factor here. This is because what they invest is dealing with human, people. So you need even higher level of experience and knowledge to get into this level.
Conclusion
No matter which level or category you are, to be success in personal finance, what you must do is “Mind Your Own Businessâ€Â. This is because there are nothing more important than “YOURSELFâ€Â, don’t you think so?
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[…] Harrison Loke at Journey To Financial Freedom presents The 9 Level of Personal Finance. […]