Guide to personal finance 1/5

  • Are you one of those who really wants to learn personal finance and take care of your financial situation once and for all?
  • Are you constantly postponing and procrastinating on this, even though you really want to?
  • Are you just not doing it because it seems too complicated and time consuming?

If you answered yes to one or more of the above questions, this guide is definitely for you. Explained in this guide are the simple yet universal laws on how to build up a strong personal financial situation that can handle anything. I know how it feels to be down on financial luck, trust me. All of the above used to apply to me. But it all changed when I found myself in a really bad financial situation, and out of pure desperation, started to read a book about personal finance that my father had given me for Christmas that year. I really made up my mind that it was now or never! I wanted to learn all I could about the subject – and surprisingly enough it turned out to be both VERY fun and MUCH easier than I first thought! And that’s one of the first keys to understand. The financial industry and banks WANT IT to be intimidating and seem complicated so that they can charge extra for advising you.

So follow this simple guide where I lay down the blueprint and actions to take to get your own finances in order. Who will otherwise do it – your bank? Hardly. At least not for free. And even if you pay for an adviser, chances are VERY high that he or she will instruct you to make financial decisions on which he or she stands to make a fat commission.


The purpose of this guide is to go through the basic steps to smarter financial behavior, easy rules to increase your savings and how to ensure a rich future. Since I started my own path to personal finance mastery and financial independence, many friends have asked me for advice, once they saw how I was able to save money, travel and have a fun life at the same time. I believe the necessity for sound money behavior is HUGE. I truly believe the average man and woman would greatly benefit from knowing and following the simple rules of good personal finance. By following the guide, you will follow the same path I did when learning the field. In each part I will break down the knowledge to a few simple steps to follow. And of course, if you are interested in extra credit – I will also write what books to read in order to dive deeper and broaden your own knowledge (highly recommended).


I will try to write as simply as possible – because personal finance IS in essence very simple. It’s about common sense and easy principles that anybody can follow. Let’s start with the first step!

Step 1: Put aside 10% of your income

Many people never save any of their salary with the excuse that they earn to little. “I would start saving if I earned a bit more”. This is nothing but an illusion. Regardless of your income, I guarantee that you will find expenses to match it. It’s simply human behavior. A higher salary permits higher living expenses. But EVERYBODY can manage to save 10%. I really believe that. The trick is making a habit of doing it as soon as possible when your salary arrives – before you spend anything of it!

“The economically smart man invests FIRST and spends what’s left. The economically foolish man spends first and invests what’s left”
/Jim Rohn

As soon as you get your salary, put aside 10% (at least 10%, preferably more). If you do this with every salary, you won’t even notice it. That 10% would have been eaten up by small unnecessary expenses anyway, but now it’s going straight into a separate bank account, envelope, or other safe place. Put this rule into action in your life as soon as possible! Personally, I have my system set up so that I put aside 10% if I have a low paying month, 15% if I have a normal month and 30% if I do really well.


With this very easy principle you can continue living as you are currently doing, but your fortune (yes, that’s what we are building here) will continue to grow with each salary! With time this fortune will develop into a staggering amount – and much faster if you let it work for you (more on that in the next part of the guide). The important thing is to start this rule NOW. How long time does it take to save 125 000 $? About 25 years if you manage to save 125 $ each month and invest them with 15% interest rate.

Lesson 1:
Make up your mind NOW to save at least 10% of your salary.

For extra credit:
Get the audio book “The richest man in Babylon” by George S. Clason. Listen to it while taking a few nice walks (and be sure to bring a pen and paper because you are going to get advice you will want to follow lol). The book describes this easy principle – and many more! Instead of talking about economics in a dry and boring manner, the book illustrates the principles via stories written in a poetic and beautifully elegant tongue. Almost every sentence in the book contains killer advice. Enjoy!


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