Learning How to Reduce Financial Stress
Starts with Growing Your Knowledge

Increasing Your Understanding of Money is a
Great Way to Get Started on Learning
How to Reduce Financial Stress

Sometimes learning how to reduce financial stress has nothing to do with being a good money manager. No matter how good you get at managing money (saving, budgeting, managing cash flow, etc.) and no matter how much financial knowledge you acquire, sometimes the only way to deal with financial stress is to earn additional income. Sometimes that daily grind job is just not enough and for some, it will never be enough.

Earning extra income can be the very best way to manage financial stress. Of course, it has to be done correctly, it has to be done strategically. So often, people choose to do something on the side to earn a little extra money, but they have no plan, they do no research, they take advice from all the wrong people and then they jump into a new venture or a new job only to find they have more stress than ever before. If you don't know how to reduce financial stress or prevent stress in a new venture or a new job, you would be better off not getting started at all.

It's a good idea to learn as much as you can about how people actually make money before you take on a new commitment such as a second job, starting a business or trying investing.

Four Main Ways that People Can Earn Money

In his well-known bestselling book called Rich Dad, Poor Dad, Robert Kiyosaki talks about how to reduce financial stress. He explains there are four main ways that people earn money. These are as follows:

  • You have a job where you earn wages or a salary paid by someone else. You are a worker earning income in exchange for time. If you stop working, you stop getting paid unless you are lucky enough to have great benefits, but most people who get benefits must pay union dues or other membership fees of some kind.
  • You own a job and you are self-employed meaning you pay your wages yourself. You are still exchanging income for time worked and the business cannot operate without you. Many people get into business for themselves, but they have no system or no plan and they soon regret the decision and wish they had their job back.
  • You own a system and people work for you. This is a form of passive income but usually requires a lot of hard work up front to get it started. Passive income is not a myth, but it can take years on continual work and significant financial investment to achieve a steady positive cash flow.
  • You are an investor and money works for you. This is also passive income, but the hard part is usually over by this point. If you are a good decision maker, an excellent manager of risk and if you are good at following systems, then this is a great way to be.

Knowledge is Key

Each way of making money comes with its own version of stressors. Maybe you can blend together several different forms of income. If your multiple streams of income are all cash flow positive, then collectively they may offer you enough money to appropriately reduce financial stress.

Regardless of how you earn enough income to manage your life, you should never stop learning how to reduce financial stress; you should never stop learning about money. So many things change in the world when it comes to money and economics and change often happens very quickly.

The only real protection is knowledge and skills. The more you know about money and how it works, the more likely you will be to deal with money issues that arise without driving up your stress level and without creating a situation that leads to chronic stress.

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