We all like to think, especially here in the U.S., that we’re capable of doing nearly all of the things we set or minds to– and doing them well.
While it’s certainly true that almost anything we set our minds to can be done well, the reality is that we have to pick a few things to become great at. Everything else has to either be left in a mediocre/neutral/average state, delegated or abandoned.
While this might sound like a negative, pessimistic view, it’s actually the truth. There is only so much energy, time and resources in our limited life to do everything we set out to do.
With that in mind, we can understand that facilitating our strengths and weaknesses will ultimately determine our success in life. A big part of this is delegation and communication.
Communication, at it’s simplest level, is just transferring knowledge or feelings from one party to another. And the main way this happens is through connection–through authentic mutual understanding.
Your ability to connect, and therefore communicate, plays a massive role of where you’ll be in 20 years. Take time to focus on it, focus on your strengths, and focus on others.
What is personal finance? And Why does it matter?
Those are two very interesting and important questions to ask as one either begins their life as adults, or being asking questions they’ve never approached before. For the past five months or so, this blog has predominantly been centered around personal finance, both the investing side, as well as the money management side.
I realized that before I continue this journey with all of you, I need to take a moment to explain what Personal finance actually is. Personal finance clearly deals with how individuals manage their money.
While the topic briefly touches on the analysis and performance of businesses and organizations for investment purposes, it predominantly centers around the individuals’ approach to managing each dollar in and each dollar out.
Personal finance answers questions like:
What are my financial goals? What use do I have for money? What should my investment approach be? How much do I need to be saving? How large should my house purchase be? Should I buy this trinket or save the money?
Many of these questions are simply answered through quiet reflection or by asking your friends and family for feedback. However, some of these more complex questions like how to invest your money, or how to craft a financial plan can often be better answered by a financial advisor.
Why does personal finance matter?
There are three basic reasons why you should pay attention to your finances:
1. Money has impact
2. Money can be complicated
3. Money is emotional
While we of course don’t have the time to go into the details of Personal Finance in one blog post, I hope this gives you a great picture of what this topic is all about.
How can more taxes be a good thing? Well taxes are something you pay either out of your earnings/income or your spending/consumption or when you die. So if we just look at the first type, income taxes, we can see that the amount of income tax you pay is largely determined by how much income you make.
I’m guessing you’d like to make more income this year. Specifically either residual income or capital gains income. So paying more income taxes can actually be a good thing; it means you have made more income.
Before you assume that paying more taxes is universally good I want admit that more taxes isn’t always better. For example if you pay sales tax on the purchase of a new car, that’s not necessarily good. Or if you forget to deduct retirement contributions form your income, that’s not necessarily good.
To be clear, income taxes should be reduced as much as legally possible. However overall, an increase in taxes probably means you’re making more money.
In conclusion, avoiding income tax at all costs may actually be a bad thing because it’s keeping you from earning more money. Go earn more money and eventually you may find that you kind of like the implications of paying more taxes.