The Mathematics Of Success
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I was taught that everything in the world runs on either math or science. As far as a successful business it takes a bit of both. In today's blog, we will be going over the math side of the two. Here are a few simple rules dealing with math that will help you go a long way. So get your notepad out and get ready for these equations or just a bunch of math that makes sense. If you can solve these problems you will do better in life.
Who Are The 1%
The simplest way to define the 1% is they are an elite group of people that control most of the world's wealth. To this group of people 100 million dollars is like being broke. These people control the world we live in. They make decisions that most people do not even see. they are the ones behind the scenes secretly changing the world, not the president or elected officials. It is not much but there are extreme differences between the 20% to 2% and the 1%. when we talk about the 1% is we are talking about Bill Gates, Elon Musk, Warren Buffett, or Jeff Bezos. That is the reason if one of these people tells you how they will invest their money the whole world listens. Just a few months ago Elon Musk said he like two Cryptocurrencies Bitcoin and Dogecoin and both shot up in a matter of minutes after his tweet. The same goes for any time Warren Buffet announced he is either selling or buying a certain stock. I am giving you a name that you are familiar with, there are more people that you never even heard of behind the scenes that are running this nation. The contributions they make to this world unbeknownst to the rest of us is what really has this World advancing in modern technology. So, to my understanding, it is more than just the income that makes these people with 1% it is what they provide as value for the rest of the world.
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The Average 1 Percent
The 80/20 Rule
The 80/20 principle is commonly referred with dealing in business. What people might not know most of your life you are using it and you do not even know it. This is when you use 80 percent of energy and only get 20 percent of your desired results or vice versa. Another know term that is used with the 80/20 is 20 percent of the people is doing 80 percent of the work that keeps the average business afloat. Even your day-to-day 80 percent of your time is wasted only 20 percent is used on something worth doing the rest is killing time. That is why you hear things like only 20% of the population own businesses while 80% work for someone else. Even with your money the average person spends it on 80 percent of what they think they need and 20 % on what they actually need. I feel this is the reason why so many people are broke or living check to check. So many people strive to become part of the 20% but realize how much hard work it takes and falls back into the 80%. I think in a way the means the 20% are the successful people and the 80% are the people that just want to get by.
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The 80/20 Rule
The 2 for 1 Guideline
We going to keep the 2 for 1 rule simple. The rule is, do not buy anything that you cannot buy twice. This theory really depends on what you are buying if you buy in a large purchase anything that you can buy twice if you are buying a smaller purchase the rule is really 5 times. So, for example, if you cannot afford to make two car payments or two mortgage payments without dipping into your saving account then you really cannot afford it. If you are buying a shirt from the store or some shoes or anything like that you supposed to be able to pay for it five times over. That is how simple the rule is, and these words came from people like Jay-Z, Gary Vee, YouTuber Graham Stephen, and many other self-made millionaires. Of course, it took them some time to learn these rules; most of them probably learned it on their own. So, I am basically giving you a CHEAT SHEET by giving you what it took the wealthy people half of a lifetime to learn in this 5-minute blog.
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If You Can't Purchase It Twice You Can't Afford It.
What Is The 70/20/10 Rule?
I know most people are not familiar with the 70 /20 / 10 rule. This is when you take 70% of your income and spend it on your needs 20% of your income and spend it on your wants and 10% of your income and save or invest it. The goal of the wealthy is to change these numbers around to whereas 70% of your income goes to your savings or investing 20% goes to your needs or wants and 10% will go to your bills. This as you know takes a lot of hard work, years of discipline, and sacrifice. When you first starting out, you are trying to figure things out most people do not have any assets or money saved. Over some years when you make that small investment each week, each month, each year it changes the tides of your overall lifestyle. With the savings and investments, you will now be able to purchase assets that will massively grow your income. The more your passive income grows, this will take care of your day-to-day daily expenses with your lifestyle. Until the point, you will no longer have to go to work giving you financial freedom. With all your expenses paid for, you now no longer must spend the bulk of your income praying for your necessities, rent, food, clothes, childcare, and transportation. If the 70/ 20/ 10 rule is successfully applied in a matter of 10 years or less, you will see some great results in your life. It is just that most people do not have the 10 years to spare to do something this extreme. One day they will wake up and 30-40 years will have passed by anyway. It is never too early or too late to start, and this is speaking from experience because I started late but I am so much happier. Financial freedom here I come.
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The 70/20/10 Rule
What Is The 60/40 Rule Of Investing
Now let us discuss the 60/40 investment rule. This is when you diversify the portfolio of your investments. Most people would put 60% of the investments in stocks the other 40% goes into bonds. This would ensure you some stability if the stock market were to crash. Bonds are supposed to be a safer alternative of the two investments. That means the reward is low. Bonds are usually back by the government if the government is running smoothly your bonds are safe. Another thing to look at is when your stocks are going down your bond yields are going up or at least holding steady. I do have to mention due to the money printing; Cryptocurrency is taking the place of bonds to keep your money safe in case of a crash. This is not investment advice, but it is something to consider when you are sticking your money somewhere for a safe nest egg. I do not know if you are going to stay with bonds buy some crypto or even invest in precious metal. But whatever it is make sure you do the research fully and do not just take advice from any random person on a blog or social media.
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The 60/40 Rule Of Investing
The Credit Score Break Down
The video above will break down all the percentages and give you a better understanding of how the credit card companies come up with your score.
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Credit Score Break Down
Is 20% Or 5% Better For A Down Payment?
The 20% down depends on the individual when it comes to buying your first home or any home for that matter. Some people will realize that 20% down is great, so you do not have to pay the extra insurance. Others feel in the long run you will save more money by taking the 5% down and just investigate instead of putting it upfront. Again, it all depends on you your lifestyle and how you intend on paying the mortgage off or investing the money you saved. Me personally I did not have a clue or an idea or of what was needed to be done, as far as buying a house. I did not understand what my best options were. Buying a house is a big decision and people should do more than a day of research in fact it should take you a couple of years if not at least six months. When you think about it this is an investment that is going to take you 15 to 30 years to pay off. Not to mention the ups and downs the income change the job loss the addition to the family, all the unaware incidents that could occur in that 30 years. Like they say the only two things that certain in this world is death and taxes, hopefully, you do not die but you will be paying those taxes. So, I really could not explain it is the way you needed it to be explained so I found a video that would explain it a lot better than I can. Please take a minute to look over the video and always do your own research after you see this before you buy your first house and put down your deposit.
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5% vs 20% Down Payment For A Home
Bonus Video
Today's Call Of Action Tell Us Are You A Math Or Science person. Let Us Know A Time When Using Math Really Helped You Out Of A Jam.
