Today I’m going to share the second big idea in my book, Understanding Money. The idea is the 30,000 foot view of how to think about your money.
My book is divided into three sections – Solvency, Security, and Success – and the important thing to learn is to do these things in order.
The first thing you need to do is become solvent. Solvency is the ability to pay your essential bills. Only after you are solvent, then you can worry about security. After you have security, then you can worry about success.
But again, you need to do these things in order. For example, you wouldn’t want to become a day trader to buy stocks (success) when you can’t even pay your car payment without going into debt (solvency).
Solvency
In the solvency section of my book, I talk about setting your long-term goals first. By doing this, you give yourself a main focus – to keep yourself on track to achieving those goals. Then, I talk about earning and spending. Earning and spending are the two main categories of how you’ll deal with your money.
Security
In the security section, you’ll learn about insurance, savings, and credit.
Success
The success section of my book is last, and for a good reason. You need to achieve solvency and security before can think about doing things that involve being successful. In the Success section, I write about investing, real estate, stocks, and starting a business.
Stay tuned for future posts where I’ll go into more detail on these topics.
For even more on these topics, order my book Understanding Money and subscribe to my YouTube Channel.