What are some financial economics fundamentals to help you manage your personal finances?

Get your household expenses down to 50% of net monthly income. Then set aside 50% of the balance to invest. If you can’t get your housing expenses down to 50% by cutting as much if your discretionary spending out, you need to consider how to earn more money. Becoming wealthy takes hard work, sacrifice and time. Coincidentally, these are the 3 reasons most people don’t become wealthy

Budgeting is a fundamental practice for managing personal finances effectively. By creating a budget, individuals can meticulously track their income and expenses, offering a clear overview of their financial health. This entails cataloging all revenue streams and categorizing expenditures into fixed, such as rent and loan payments, and variable, like groceries and entertainment. With a well-structured budget in place, individuals gain insight into their spending patterns, enabling them to exercise better control over their finances and allocate funds wisely towards their financial goals.

It takes a fundamental understanding of important financial economics concepts to manage personal finances. To lay a solid financial foundation, begin by tracking spending, developing a budgeting mindset, and giving savings top priority. Learn about ideas like risk management, diversification, and compound interest to maximize investment strategies and reduce monetary risks. Accept lifelong learning to keep up with economic and market trends, which will enable you to make well-informed decisions. People can start down the path to prosperity and financial resilience by learning these principles.

Time value of money Digital Literacy Systematic investment plans Systematic withdrawable plans Post office investment schemes

Uma das premissas que aprendi na economia é nunca gastar além do que ganha, bem diferente do que os governos fazem né? a segunda é sempre ter uma reserva de emergência, pois nunca sabemos o dia de amanha, terceira ter mais de uma fonte de renda, seguindo estas 3 premissas acredito que ajudará bastante deixo aqui um livro já bem conhecido do meu xará Robert Kiyosaki Pai Rico Pai Pobre, esse livro lhe ajudará a ter uma visão melhor sobre suas finanças pessoais!

-Knowledge of interest rates help in making informed decisions regarding borrowing and saving, such as choosing the right loan or investment option. -understanding interest rates and inflation enables individuals to assess the risk and return trade-offs associated with different financial instruments, helping them to build a diversified portfolio that balances growth potential with risk tolerance.

Les taux d'intérêt et l'inflation sont intimement liés. Les banques centrales utilisent les taux d'intérêt comme un outil principal pour contrôler l'inflation. En augmentant les taux, elles rendent l'emprunt plus coûteux, ce qui peut aider à ralentir l'économie et à réduire l'inflation. À l'inverse, en abaissant les taux, elles cherchent à stimuler l'emprunt, la dépense, et par extension, la croissance économique.

Desde la perspectiva de las finanzas personales quien tiene solo como activos un salario, esa es la persona más vulnerable frente a las volatilidades de la economía, por ejemplo tasas de inflación, tasas de interés y variación del tipo de cambio; es muy común que las personas usen de refugio al dólar estadounidense; si embargo quien tiene activos materializados en existencias, inmueble destinado para la renta, tiene una posibilidad de protegerse ante los cambios antes mencionados, y se recupera más rápido respecto del primer caso. Gracias!!!

Taxas de juros afetam tanto o custo do dinheiro emprestado quanto os retornos sobre nossos investimentos. Se as taxas estão altas, podemos pagar mais em empréstimos, o que aumenta nossos gastos e diminui a capacidade de poupança. Por outro lado, em um ambiente de taxas baixas, podemos obter empréstimos mais acessíveis e pagar menos em juros, o que pode ser uma oportunidade para refinanciar dívidas existentes a taxas mais favoráveis. A inflação é o aumento geral dos preços ao longo do tempo. Logo, o dinheiro que temos hoje comprará menos no futuro. Portanto, é essencial considerar a inflação ao fazer planos financeiros de longo prazo, como aposentadoria. Investir em ativos que superem a inflação é crucial para preservar o poder de compra.

La economía financiera te ayuda a comprender cómo las tasas de interés y la inflación impactan tus finanzas personales. Tasas de interés: Afectan el costo de los préstamos, como las hipotecas. Cuando las tasas suben, los pagos mensuales también aumentan. Inflación: Reduce el valor del dinero a lo largo del tiempo. Si tus ahorros no crecen al ritmo de la inflación, pierden poder adquisitivo. Para protegerte, puedes: Fijar una tasa hipotecaria para evitar que las subidas te afecten. Invertir en activos que superen la inflación, como acciones o bienes raíces. Aumentar tu ahorro para mantener su valor real. Comprender estos fundamentos te permite tomar decisiones informadas sobre tus finanzas y protegerte de los cambios económicos.

The general rule that says that with more risk comes higher return tends to be true in investing. However, what really matters is finding the "right" level of risk and expected return that works for an investor. Up to what point shall I take more risk to get more money in the future? That equilibrium point is often approached by maximizing the risk-adjusted return (i.e., maximizing the Sharpe ratio). That comes with some underlying assumptions and might not be the best thing to do if an investor's preferences are more complex or their level of risk appetite is very high. But maximizing the risk-adjusted return is most of the time a good place where to start.

1. Black Swans: Taleb highlights the importance of unpredictable, extreme events (“Black Swans”) that are not accounted for in traditional risk models, leading to an underestimation of real-world risks. 2. Skin in the Game: He argues that accurate risk assessment requires decision-makers to have personal stakes in the outcomes, ensuring more responsible risk-taking. 3. Antifragility: Taleb advocates for systems and strategies that benefit from volatility and stress, rather than merely withstanding them, to improve outcomes in uncertain environments. 4. Barbell Strategy: He suggests a two-pronged investment approach, combining extreme safety with high-risk opportunities, to avoid the poor risk-return trade-offs of medium-risk options.

Saving and investing are crucial pillars of financial stability and growth. It's essential to set aside a portion of your income consistently to establish an emergency fund and work towards long-term financial objectives. Recognizing the potential of compound interest, individuals can leverage it by investing in various assets such as stocks, bonds, mutual funds, or real estate. These investments not only offer opportunities for wealth accumulation over time but also serve as a hedge against inflation. By embracing a disciplined saving and investing strategy, individuals can lay the groundwork for financial security and prosperity in the future.

Risk and return are essential concepts in finance that go hand in hand. Risk refers to the level of uncertainty or potential for loss associated with an investment or financial decision. It can arise from various factors such as market volatility, economic conditions, political events, or company-specific risks. Generally, investments with higher potential returns tend to have higher levels of risk. Return, on the other hand, represents the gains or positive outcomes from an investment and is the reward for taking on the risk. Investors expect to be compensated for the level of risk they are exposed to.

En el mundo financiero, riesgo y rentabilidad van de la mano. A mayor riesgo, mayor potencial de ganancias, pero también mayor probabilidad de perder dinero. Al invertir, es importante diversificar tu cartera para reducir el riesgo. No pongas todos tus huevos en una misma canasta. Investiga antes de invertir y comprende los riesgos asociados a cada instrumento financiero. Establece objetivos de inversión realistas y define tu tolerancia al riesgo. Recuerda que la rentabilidad a largo plazo es más importante que las ganancias a corto plazo. Aplicando estos principios, puedes tomar decisiones de inversión más informadas y alcanzar tus metas financieras.

Charlie Munger’s view on diversification emphasizes: 1. Concentration Over Diversification: Munger advocates for a concentrated portfolio of high-quality businesses that investors understand well, rather than spreading investments thinly across many companies. 2. Knowledge-Dependent Strategy: He differentiates between “know-nothing” investors, who may benefit from broad diversification through index funds, and “know-something” investors. 3. Quality and Understanding: Munger believes that investing in a few outstanding companies, based on thorough research and understanding, poses less risk of permanent loss than owning a diverse array of average or poorly understood businesses.

La diversificación es clave para reducir el riesgo en tus inversiones. No pongas todos tus huevos en una misma canasta. Invierte en diferentes tipos de activos, como acciones, bonos, bienes raíces y efectivo. La asignación de activos es la distribución de tu dinero entre diferentes tipos de activos. La proporción ideal depende de tu edad, objetivos financieros y tolerancia al riesgo. Un asesor financiero puede ayudarte a crear un plan de inversión diversificado que se ajuste a tus necesidades. Recuerda que la diversificación no elimina el riesgo, pero lo reduce significativamente.

Once you start saving, start investing. Remember the minimum criteria to invest in any asset is it should beat inflation. Focus on long-term investment. It has less risk and far more reward. Diversify your investment. Don't put all your eggs in one basket. Remember! there is always some asset in the market that is going up no matter how bad the market is. Diversification helps you catch that gain.

Diversification and asset allocation are key concepts in investment strategy and risk management. Diversification involves spreading investments across different asset classes, industries, or geographic regions to reduce risk. By diversifying, investors can potentially mitigate the impact of any single investment performing poorly on their overall portfolio. Asset allocation, on the other hand, refers to the distribution of investments within an individual's portfolio. It involves deciding how much to invest in different asset classes such as stocks, bonds, cash, and other alternative investments.

A diversificação e a alocação de ativos são duas estratégias essenciais para gerenciar o risco e otimizar o retorno em um portfólio de investimentos. os investidores podem reduzir o risco, maximizar o retorno e alcançar seus objetivos financeiros de longo prazo.

I think opportunity cost and marginal analysis are crucial in personal finance. Opportunity cost helps individuals evaluate trade-offs, while marginal analysis assesses the additional benefits and costs of incremental changes. Understanding these concepts enables people to prioritize resources effectively and pursue opportunities that align with their goals.

En economía, el costo de oportunidad es el valor de la mejor alternativa que se renuncia al elegir una opción. Al tomar decisiones financieras, es importante considerar el coste de oportunidad de cada opción. El análisis marginal compara los beneficios adicionales de una decisión con los costes adicionales. Te ayuda a tomar decisiones eficientes, como cuánto ahorrar o cuánto invertir. Utilizando estos conceptos, puedes tomar decisiones financieras más informadas y alcanzar tus metas con mayor eficiencia.

Understand the sensitivity of your habits and discipline in your personal finance. Your rent and food is the biggest expense you have. Do daily average usage cost for a long-term use expensive product. When trying to budget for everything, understand how each item has its own sensitivity to your savings in the long run and also have different marginal utility to expenditure. Lets say your rent is $1500/m and takeout cost $20/day. Saving 10% on each will save you $2500/year. Now imagine instead of working on saving on these everyday items that have more weight on your finances, you're ending up trying to save money on everyday use mattress, chairs or laptops that gives you benefit of quality everyday.

Opportunity cost refers to the value of the next best alternative that is foregone when making a decision. In other words, it is the cost of choosing one option over another. Every decision involves trade-offs, and by choosing one option, we give up the potential benefits or gains that could have been obtained from the alternative option. Marginal analysis, on the other hand, involves evaluating the additional benefit or cost of an incremental change in a decision. It involves comparing the additional benefit or cost of producing or consuming one more unit of a good or service.

Whenever you plan to sell one asset to move into another remember staying long-term in one asset is far more profitable than frequently switching. This is especially true in the case of mutual funds. The time duration of being invested in a fund is more important than the amount. Only switch to other assets after calculating how much it costs to move to the new asset.

L'ancrage est un autre biais comportemental courant qui peut fausser notre perception de la valeur. Lorsque nous nous fixons sur un prix initial ou une valeur (l'ancre), nous avons tendance à faire des ajustements insuffisants à partir de cette base pour arriver à une estimation de prix ou de valeur plus précise. Cela peut nous amener à surévaluer ou sous-évaluer des investissements, des biens immobiliers ou d'autres décisions financières importantes. En reconnaissant et en comprenant l'effet de l'ancrage, nous pouvons travailler à ajuster notre processus de réflexion pour prendre des décisions plus informées et rationnelles.

Existen comportamientos que pueden poner en riesgo nuestras finanzas personales como: 🚨𝗠𝗶𝗲𝗱𝗼 𝗮 𝗹𝗮 𝗽é𝗿𝗱𝗶𝗱𝗮: Nos hace tomar decisiones impulsivas, como vender acciones en un mercado bajista. 🚨𝗘𝘅𝗰𝗲𝘀𝗼 𝗱𝗲 𝗰𝗼𝗻𝗳𝗶𝗮𝗻𝘇𝗮: Cuando experimentamos ganancias inesperadas, subiendo nuestro ego y nublando nuestras decisiones. 🚨𝗣𝗿𝗲𝘀𝗶ó𝗻 𝘀𝗼𝗰𝗶𝗮𝗹: Nos hace sentir obligados a seguir el ejemplo de nuestros amigos o colegas. 🚨𝗜𝗺𝗽𝘂𝗹𝘀𝗶𝘃𝗶𝗱𝗮𝗱: Pueden llevarnos a realizar compras impulsivas, sin considerar el largo plazo. 🚨𝗔𝗻𝘀𝗶𝗲𝗱𝗮𝗱 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗲𝗿𝗮: Puede llevarnos a evitar tomar decisiones financieras importantes, como invertir para el futuro o buscar oportunidades de crecimiento económico.

• Influence of Narratives: People’s financial behaviors are heavily influenced by the stories. • Risk Perception: Advocates for a nuanced understanding of risk, influenced by personal experiences and psychological comfort. • Long-term Outlook: Stresses the benefits of long-term financial planning and the patience required for compounding to take effect. • Simplicity in Investments: Recommends keeping investment strategies straightforwardz • Adaptability and Humility: Highlights the need for flexibility in financial planning and humility in acknowledging the limits of one’s knowledge. • Emotional Resilience: Underlines the importance of managing emotional responses to financial fluctuations for maintaining a healthy financial life. l

The sunk cost fallacy is a widespread temptation in life — there are going to be many times when you have put significant effort, money, or time into something that it might seem like a necessity to keep putting more in, even if it is actually a bad idea. Recognizing that this and other heuristics are affecting your judgments and decisions is a strong first step toward being able to correct and optimize.

Understanding the time value of money is crucial in personal finance. This principle emphasizes that money available today holds more value than the same amount in the future due to its potential for earning. Recognizing this, individuals can grasp the significance of investing early and consistently to leverage the power of compounding returns. By investing wisely and allowing their money to grow over time, individuals can maximize their financial potential and work towards achieving their long-term goals.

There is a fundamental principle missing, and that’s having a goal. What is it you’re trying to achieve and when do you want to achieve it. However, a goal without a plan to achieve it isn’t really a goal at all. It’s merely a dream. A wish. As a grown up you should no those don’t come true. You need a plan. No one successful achieved that success without a goal and a plan to achieve it.

Planification financière des évènements de vie La planification financière pour les moments clés de la vie constitue une élément important pour assurer la sécurité financière. Que ce soit pour l'acquisition d'un premier logement, l'organisation d'une cérémonie de mariage, l'arrivée d'un enfant ou la préparation de la retraite, chaque événement de vie demande une stratégie financière bien pensée.

A powerful yet basic concept in investing is the value of any investment is the discounted cash flow back to the present. The discount rate is the market expected return, which is key to rank and rate investments across asset classes, countries, sectors, etc.

Um fundamento de extrema importância é o endividamento consciente, que envolve o uso estratégico de crédito e empréstimos sem que comprometa sua saúde financeira. Alguns aspectos importantes sobre o uso do endividamento consciente são: Avaliação da necessidade da dívida, compreender os custos deste novo crédito, planejar o seu uso, criar um fundo de emergência e renegociação de dívidas. O endividamento consciente serve para proteger sua estabilidade financeira.