By John Castro, CEO of Investment Mastery

We learn early on to avoid bringing up the three controversial subjects of religion, politics, and money in conversation. And even though the latter topic—especially in today’s climate—might seem the least divisive of the three, it’s the one that can make us very uneasy. Our perception of money is formed at a young age, and while everyone relates to it differently, many of us have a somewhat complicated relationship with it.

But why is this?

 For many people, self-worth is unfortunately equated to financial worth, and fears of being judged by others on higher incomes can lead to a deep feeling of insecurity. That discomfort with money talk essentially stems from fear of judgment. Not just for those that do not have a high income, but for those that are financially better off too, as they may feel exploited if they discuss their finances.

To break this unhealthy cycle of not talking about a topic that affects us all, I believe teaching children financial literacy from an early age would be the best solution, those young people equipped with the knowledge and practicality of managing and understanding money will grow into adults that have a better relationship with it. Ultimately, if people have a good relationship with money, they are more likely to have open conversations about it.

However, all is not lost, there are ways to start the process of being comfortable when money is brought up, and it all starts with how you manage it.

Step 1 – The first step is to understand where you are. Calculate how much money you have in savings, investments, checking, and debt using a spreadsheet or another free budgeting tool. Then, keep track of your monthly expenses. Once you see money coming in and out, you will feel much more in control of your personal finances.

Step 2 – Set savings goals and track your personal spending habits as well as shared spending if you have a joint account, there are free tools out there that send notifications/balance updates to ensure you are meeting your saving goals.

Step 3 – Budget! This sounds much easier than it is and requires you to be honest with determining what are needs and wants, for example, food, clothes, and household bills are needs but holidays, meals out, and trips to the cinema would fall into the wants camp. You could set a budget for yourself but also a shared budget for your household and allocate your income to meet the budget.

Step 4 – Tackle any debts. Never an enjoyable experience but once you understand your financial incomings and outgoings, and set clear budget and saving goals, you will be in a better place to start paying towards debts you may have.

Once these steps have been accomplished, and you are confident with managing your money, you can then look at how to make your money work for you. Investing is a great long-term way to build wealth, and with the savings goals you have already set, you can determine if there is scope to allocate some of those funds to invest.

Long-term, stock-market investments tend to outperform cash, providing the opportunity for higher returns on any money invested over time.  It’s important to note here, that spreading your money across different types of investments can help you reduce the level of risk you take when investing. This is known as diversification. However, the first rule to investing is to only invest what you can afford to lose, and the second rule is to self-educate, read and read some more on investing, join communities with like-minded people, and know your stuff before you risk your capital.

So what are the different types of investment opportunities?

• Stocks & shares. Investing in equities (stocks & shares) is one of the most popular alternatives to cash
• Bonds
• Peer-to-peer lending
• Crowdfunding
• Oil, gold, and precious metals
• Cryptocurrency
• Pension

Essentially, a good money mindset means having realistic financial expectations, removing the myths attached to money such as ‘it’s not worth saving if I can only contribute a small amount’ understanding that no one has an infinite amount of money, and being willing and able to save or invest money wisely. Remember that money is ultimately a tool, and it’s how we use that tool to benefit our lives.

About Author:

John is the CEO of Investment Mastery, an e-learning and online training company dedicated to educating beginner investors on how to use the Stocks and Crypto Markets to create financial independence for themselves and their families. From humble beginnings, John thrived for success at a young age, which has seen him involved in many business ventures throughout his 20s, using his impressive sales skills to produce untapped revenue for several 7 to 8-figure organisations. Today, he has harnessed his ability to understand human buying behaviours, build high-performing teams and his methodology of keeping business very simple, to take Investment Mastery to new heights, which has seen over 25% growth year on year since 2017. Using Investment Mastery’s investing methodology, his investment portfolio grew 147% in 2021, and now, still only in his 30s; while embracing the ongoing evolution of the e-learning industry, he is leading Investment Mastery through a transformational plan to expand internationally with a plan to 2.5x the business in the next three years and champion the combination of EdTech with FinTech through the ever adapting Investment Mastery membership platforms.