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Bored Panda got in touch with Nick Loper from SideHustleNation.com and he was kind enough to speak to us about managing money and not getting into the situations that many of these people found themselves in. First, we wanted to hear what he thought is the biggest misconception most people have about managing money.
“Probably that somebody else will magically take care of it for them, or that they'll get to it "later" — when they have more time, money, or both. But the truth is you have to be the CFO of your own household and set up the right financial systems for yourself. That means doing the basic stuff — creating a budget, living within your means — but also the longer-term stuff like setting up retirement accounts, automated investing, and being proactive about increasing your income.”
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Of course, many people do not even reach the “money management” stage, as they focus on just getting by. Even when times improve, this often leads to some degree of financial illiteracy. We wanted to hear Nick’s thoughts on this issue. “I think it can be intimidating and a little depressing/embarrassing if the numbers don't look good when you're starting out. It's not something we were ever really taught in school.”
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“But there are a couple of simple things you should keep track of on a monthly, just to get in the habit:
1. Your personal profitability (what you made - what you spent = personal profit) This helps you start thinking as the owner of the little business that is your life.
2. Your net worth (what you own - what you owe = your net worth). Some months it'll be up, some it will be down, but tracking it over the long-term lets you see the positive progress you're making, and may even lead to early retirement.”
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“Plus, we're naturally loss-averse and investing can seem risky and volatile. That's why you have to take a long-term view and slowly let compound interest start to work in your favor. And the younger you are, the more you'll benefit from that,” he added. He recommended some resources, such as the books “Rich Dad Poor Dad”, “The Simple Path to Wealth,” and “I Will Teach You To Be Rich” as a start.
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I think my most shameful and 'felt so low' moment was having to use toilet paper and scotch tape, as I couldn't afford pads or tampons.
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Nick left us with some parting thoughts. “A lot of personal finance content is focused on saving and investing, but there's a limit to how much you can realistically save every month. If you still don't have much breathing room in your budget, it's time to address the income side of the equation. In some cases, that means learning new skills to advance your career, exploring a side hustle, or starting a business of your own. Because your earning power is limitless — and it's a lot more fun than clipping coupons or never turning on the heat trying to save a few dollars.” You can find his site here.
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