Focused money is about making smart decisions about money on a consistent basis. There will always be mistakes made with money. The objective is to limit these mistakes in order to end with profit. ANY Profit is positive. Profit always beats losses.
Presently the greatest financial victimization of our time is AMORTIZATION. The lending industry has used amortization to earn obscene profits at the expense of an UNAWARE population.
Most people are unaware of the financial damage caused by amortization. This is because you and I are used to living in terms of monthly payments (we have been trained to think this way). And so, we have lost focus on smart decisions about money. If the monthly payment fits and makes sense it is added to the schedule of other monthly payments.
An easy example is the purchase of an automobile. When you step into a dealership the discussion never begins with the price of a car, it ALWAYS starts with what are you looking to pay monthly. This allows the real cost of the car to be hidden inside a comfortable monthly payment.
The basic promise people work with is called the APR (annual percentage rate) and so we are duped into the process of amortization via the discussion of the APR. In monetary terms, the APR is almost always a false canard, it's a red herring devised to get you comfortable in paying interest for as long as possible, thus increasing the profits to the banks, lenders, merchants and credit card processors. They all know you will end up paying well more interest than the APR, its not even close.
How much interest would you expect to pay based upon a 4% APR? Do not calculate or look it up, simply relly upon your own common sense and estimate what you think it is going to be. If I asked this question of 100 people a day, practically 100% would have greatly underestimated the total of interest payments made after 30 years. Some answers include $ 25,000 or even $ 50,000 and a rare occasion someone guesses $ 60,000. No one ever collects as much as $ 75,000 which is approx. the payment on $ 100,000 loan at 4% over 30 years. Its called the magic of compound interest and in this case the it is the banks and lenders who are compounding YOUR losses for their benefit.
Now, the reality is pretty much everyone needs to borrow the money to purchase their home, that's a given. But the common mistake is too many people are unaware of the financial consequences of that decision. Again, we need to look at this from a strict monetary base and when you borrow money:
YOU ARE PUSHING FORWARD YOUR FUTURE UNEARNED DOLLARS.
This is YOUR money. Most people incorrectly believe this is the bank's money that they are repaying over time. But that is far from the truth!
YOU bring YOUR money from the future to pay for the Life Experience and Life Style you enjoy in the present.
Those future unearned dollars are being repaid with additional future dollars. This is defined as interest payments. (the common penalty for pushing dollars forward). Every dollar you pay today is a dollar YOU will never have in the future.
This adds to spending — only now you are spending what you currently earn and what you expect to earn in the future.
Without those dollars in the future YOU have no money to compound for future wealth accumulation. Thus, you never reach financial independence.
It does not matter how much money you save today if you continue to lose future dollars in the form of interest payments. (The more monthly payments you have the less you can save anyway).
YOU are currently COMPOUNDING YOUR LOSSES! And you know why? Because money can only do two things:
1. It either earns interest or
2. It pays interest. (the longer you pay interest the less you have for financial independence)
Those who learn the secret of earning interest on their money are the ones who attain financial independence.
Only 5% reach this lofty status. They became aware of the core knowledge of financial literacy. This includes:
What is money?
How money works.
What YOU believe about money and why you believe that.
Also, the basic psychology within all decisions about money. Those who remain unaware of these financial truths are doomed to financial dependence at best. Many die penniless or worse end up living penniless. The others gradually accept support from others such as family, friends, organizations, institutions, church and at worse the government.
This represents the status known as financial dependence and 95% of all who reach 65 and older end up dead, dead broke or financially dependent.
This is a very sad commentary for the richest nation in the world. Yet at the same time we also have the highest rate of financial illiteracy in the world and this has created the 95/5 dilemma that has existed for 100+ years now.
By reading this YOU are now aware of the situation and circumstances that can create financial independence. You stand at a fork in the road and can either veer off to the 5% who attain financial independence or stay firmly locked into the path of the 95% end end financially financially dependent at BEST!
The decision lies in YOU taking the first step to financial independence. This decision will immediately STOP the loss of future dollars and give you full access to those future dollars needed to compound interest for YOUR wealth accumulation.
Understand this singular first step alone will not guarantee YOUR financial independence, but it will put you on the pathway to financial independence.
Without taking this first step, you will end up with NO OPPORTUNITY for the attainment of financial independence. You will lock yourself and YOUR loved ones into the status quo that guarantees financial dependence.