The Real Meaning of Money Management
People toss the term money management around far too often. Lately, it’s used so loosely in financial literature that its older, original meaning has almost been lost. Once upon a time, wealth management referred to the way in which individuals kept an eye on their income, and how they earned income or interest from excess funds. Sticking to the basics of the concept means knowing where your money comes from, where every dollar goes, how to put some of it to work for you, and how to be ready for a temporary shortfall. Here’s more about each of the key concepts behind the authentic philosophy of managing what you earn. Make the Dollars Work for You Making money work means being certain that all excess wealth earns interest or brings in a return of some kind, perhaps via investing in the market. It’s a simple idea that is ignored by many working adults every day of the year. For whatever reason, people let their hard-earned income wallow in savings accounts that pay next to zero interest, stuff it in safe deposit boxes, or let it accumulate in checking accounts. The solution is to have multiple locations for excess wealth. Consider putting a fixed percentage into the stock market…
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