INTRODUCTORY PRESENTATION

Hello! Throughout the upcoming year we will be your guide to the world of personal finance and investment. In this lesson, we will tell you about our course for the year.

For all time people have always loved money. Just as they love
it now, they will continue to do so in the future. However, at the same time not having enough money causes suffering for billions
of people. What a nightmare! What's the problem with money? Maybe it’s just that we don't understand it. Why do so many people get depressed when they think about money? Perhaps because
we are instinctively afraid of things we do not know much about.

Almost everyone learns ways to make money and they think this is enough for success and financial freedom. But look at the people who by the age of 50 earn five times more than at 25. Are they more successful? More protected? Can they now work just for fun? Do they have enough money? Of course not.

They may have better cars, larger homes, better credits, more sophisticated food and more expensive clothes, but they have failed in changing the most important thing. Every day they still have to find ways to earn more money. As a consequence, these people missed
out on freedom.

The secret of money is not how to earn it. It doesn’t matter what we do or where we work. The secret of money is in saving, managing and investing it. Money should work as hard as you do to create more money. That is the secret to financial freedom and success. So the main question we ask ourselves is: How can I do that? This is what we are going to discuss this year!

What is this course about?

When I start talking about the essence of the course I have a strong desire to say, “Embrace the new knowledge on this exciting journey and adventure!”

Skills, not just one time profit

We mean skills and not just information, a fishing rod and not just fish. The skills we acquire let us develop a system for making decisions that continually work for us not just once, but over and over again.

Do your financial skills allow you to live today as you wish?

Let’s say one of your current financial goals is to buy a new car, or pay off a loan, repair your home, pay for your children’s education or even fly to the moon. By learning to solve one of these problems you will acquire experience, skills and a system of decision making. These skills may either be helpful or harmful. On the other hand, having acquired effective skills you will be able to use them for solving other financial problems.

It is important to understand that what we are going to do is like learning to walk again. First we crawl, then take first steps, fall and get back up again. It is a painful process. We dream of walking just like the giant adults around us and nothing can stop us – cuts or bruises, parents or grandparents.

As a child you are happy to take a few steps and reach your goal, say, a toy which you would probably toss in the air and break. Later on we increase the distance and make our goals more difficult. The skills acquired in childhood let us walk, and then run to achieve our goals and overcome difficulties.

It works the same way in investing, family budget planning and personal finance. Once skills have been acquired they can be used for the rest of your life.

The Master of Personal Finance course is the ABCs of financial knowledge. It will help you understand our main
course – the Master of Investments.

Money Magic

Your money can do amazing things! That’s why everything I talk about in this course always concerns your personal finances and wealth. Let me say it again: "Your money can truly do amazing things."

Of course it can’t take you to Mars, but there are certain things it can do. For example, even a small amount of money can turn into a large sum over a period of time.

Albert Einstein once said that compound interest is the “greatest invention in human history”. Compound interest allows you to succeed in life regardless of your income level. We will talk about it in one of the next lessons but the question is do you want to wait for 32 or 69 years for your million dollars?

Speed and Quality of Income

Of course not! That’s the reason why you should learn about other amazing things money can do. And most importantly you need to acquire the skills required to make this happen. By the way, the calculations given earlier are true. You have read everything correctly and your eyes are not playing tricks on you!

How much are you worth?

Your value may be increased only if you are developing your skills and creating new income sources. Give $1,000,000 to a poor person without any money management skills and in a year he will be poorer than now. Give $1,000,000 to a manager who is earning $20,800 a year, has long-term debts, a mortgage on his house and a car of $30,000 bought on credit, and in a year he will be even poorer! An absence of skills with a gift of money is a path to nowhere.

How many sources of income have you created over the last 5 years?

In order to work on becoming richer we need to make precise calculations. The rate of money generated in your life is your income divided by the number of hours in your life. We call it your price per hour.

But that’s not all, since you should also be working on the “quality” of money coming into your life. The more money you are getting without any effort, the more freedom you have in your life.

How many hours per month do you exchange for money?

How much money do you get without any effort?

One of my friends is earning over $500,000 a year but neither I, his wife, his children (I wonder how they were even born), nor his friends ever see him. We sometimes hear about him and know that he often complains about his health, his boss and employees, that he is tired, busy or has not used any of his vacation time. We see him once a year at his birthday party if, of course, he can get there. We understand that we do not want to live the way he does. He has money but does not have a “quality” lifestyle. I call this income “low-quality”.

Hunting for Little Things

The quality of our financial life is influenced by little things. I do not think you can get rich by taking your money to an investment or management company. This decision is too easy and not cheap. Financial life has many aspects to it.

Any picture consists of smaller parts. Each little part consists of tiny strokes. The same is true for the picture of our financial life which consists of a large number of little things, each of them influencing the final result as profit, loss, capital, debt, stable income or dependence on employers.

One of my friends from Russia calls it “hunting for 2%.” The first percent we can save and the second we can eventually earn. Though this example is conventional it is very demonstrative.

Is a 2 percent gain or loss much? At first glance no, but it all depends on our perspective. If we earn 2% of a small amount once, this is still not much. If we earn 2% of a small or large amount for a long time, then it is definitely significant.

What we are going to do is hunt for 2%. We will learn to spend wisely, though we are not going to waste much time on that. These skills are easy to acquire. We will learn to save efficiently. This is not hard either. The most important thing we will learn is how to earn money more effectively.

The skills of efficient money management will not magically create multiple millions in your life immediately. But over time, they will slowly and steadily help you control your financial life.

Financial Freedom

Control over your financial life can provide you with important resources such as more time, increased money and better health. I list “time” first because this is the most important component of our financial freedom.

In this course as well as in the course The Master of Investment we will achieve financial freedom using the third way, the way preferred by millions of people. This does not make the first two ways less important, as I think we should be developing in all directions.

The third way is the longest and may take 10 or 20 years. But it’s the most reliable way and it’s available to everyone.

Motivation Level and Losses as Lessons

Soon you will start investing, experimenting and acting on the content of this course and the Master of Investment course. Your activities and investments will bring profits but they may also bring some losses.
 

To get to the top of the next mountain you must first descend from
the one you are at now. To acquire a new habit you must first get rid of your old ones. To learn to swim you may have to take in and swallow some water. The same is required for learning how to control your finances. Just as no swimmer enjoys gulping down salty water, no investor wants to suffer a loss. It is easy to give up, but you will never reach your goals if you lose hope so quickly.

Every time I make a bad decision or suffer a loss from an investment, I think of a child learning to walk. I say to myself: “Get up. You have just fallen down, and you don’t want to spend all your life crawling. You deserve more than that, so stand up and try again.” The experience is much more important than worrying about a single loss.

Which scares you more – single loss
or a lifetime of regret?

This simple idea keeps me motivated. We are not focused on making money from a single day or week. We want to acquire the right skills which will let us enjoy a lifetime of steady and increasing income growth. Once I told myself: “I do not want to depend on my salary or worry about the living costs.

I am ready to fall a couple times while learning to stand on my feet.”Will you have some unsuccessful transactions? Yes. Will you suffer a few losses? Yes. Will you occasionally be disappointed and discouraged? Yes. Just as in learning any new subject, skill, or trade some days will be worse than others.

 

See you at our first lesson! We will talk about your finances and I will reveal some secrets, which will help you start mastering the skills you need immediately.