Winning the money game.

Winning the money game by Niklas Westerlund

You could argue that the only important number in the personal finance is the gap between what you earn and what you spend. And if you need to improve you personal finance, you need to improve that gap.

Some easy tips:

  • Spend less than you earn.
    • Write down how much you spend and on what.
    • Write down how much you make after taxes.
    • Divide the difference with your earnings to get a percentage (this is your “gap”).
  • Earn more.
    • Start side business.
    • Get educated.
    • More income streams.
  • Live frugal.
    • Maximize every euro.
    • Don’t make yourself miserable.
    • But don’t forget the big picture.
  • Manage money
    • Pay off all high interest dept.
    • Invest.
    • Savings.

Most of us know all these things, but still we choose not do them. In 98% of the cases it’s only about wrong unhealthy beliefs.

Wealthy people are not any smarter than poor people; they just have different and more supportive money habits. The single biggest difference between financial success and financial failure is how well you manage your money. It’s simple: to master money, you must manage money.

All people I know that are driven by money have more of it than average people, and it has nothing to do with their background or even education. When you are interested about money you are more aware about how you spend it and where to get more of it. They are probably going to win the money game. When I say, “win the money game”, I mean that they are financially free. In another word, they have more passive incomes than they spend.

If you only need 1 000 € / month to live (rent, food, hobbies etc.), then you need to have a passive income more than 12 000 € / year. In real life you probably need something between 2 000 € – 5 000 € / month, 24 000 € – 60 000 € / year. How can you make that much passive income? There are many ways to do this, but there is one important list that you must “check” first.

  1. You know the “gap”.
  2. You know what you need (passive income) to win the money game.
  3. You WANT to win the money game.

In another word you must know where you are on a map to even start your journey. You must know exactly where your goal is to reach it. Because your journey will probably not be a straight line and there will be a lot of bumps on the road you need to have the willpower to keep going. Do not be surprised if you find new goals you want to reach. That is just the fun of an ever-going journey.

You must acquire the habits and skills of managing a small amount of money before you can have a large amount. We are creatures of habit, and therefore the habit of managing your money is more important than the amount.

Again, people think it’s all about the income; they believe you have to earn a fortune to get rich. That is just not true. When you know the gap -percentage and work on improving it, it will! The other thing is that you must save / invest money. You MUST!

It’s more important than paying depts.

If you only concentrate on paying your debts, you will do just that the rest of your life. You will always be in dept. Trust me, it’s an everlasting circle. Start saving / investing and one day you can pay your depts for good. But start now, that is the single most important habit.

Take a jar and put money there every day. If you do not use cash open a separate bank account. Put there 10% of what you earn every month. If you do not have 10% put 8% or 5% or 3% or 1%, put something! Find out ways to invest this money. Do not invest everything on one thing. Make the percentage larger by spending less.

Yes, you probably need to sacrifice something to be able to save something in the beginning. But you must do it get this going. And it will be well worth it in the future.

When you start this habit miracles will happen. You learn so much interesting stuff about making money that it will become easier and easier to spend less and earn more. The money will “come to you”. This happens to everyone who keeps improving the gap and who do never stop saving / investing.

Start now and you will never regret it.

Recomended blogs:

4-hour workweek

The Simple Dollar


Source material, literature:

T. Harv Eker. Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth, 2005. HarperBusiness.

Trent Hamm, The Simple Dollar, 2010. Financial TImes Prentice Hall.

Timothy Ferris, The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich, 2009. Crown Publishing Group (NY).

Trent Hamm, 365 Ways to Live Cheap, 2008. Adams Media Corporation.



About Niklas Westerlund
This entry was posted in Personal finance. Bookmark the permalink.

8 Responses to Winning the money game.

  1. jmatti123 says:

    A Savings consultant ones said that the difference betwee drug addict and a millionaire is the waiting time for pleasure. Both use similar amount of time to manage ones wealth, both must be very focused to the target and both earn roughly the same. The only difference is how long can you wait until you must spend for pleasure. For an addict it’s 15 minutes from the point cash is received. For a millionaire it’s more than 15 years.

    Good topic!

  2. kniemela says:

    A very good post! This topic is certainly one that will be interested in at all times. It is true that even if people know how something can be achieved and there is a pretty clear instructions, so you must be extremely motivated and sustained the strength to do the work in order to achieve your goal (if you want to achieve something a little more bigger).


  3. jhaikio says:

    I completely agree with your blog, Spend less that you earn! It’s so simple. It means being in control of yourself. Unfortunately, modern people do not want to wait, they/we want all, and as soon as possible. We have “Now generation” and money is something virtual.If we want the product, now. Pressing “Buy” and next day pulling it out of mail. Thats where the magic is, thats where money goes.

    Great blog

  4. maariterving says:

    What a great topic in your blog Niklas!
    It sounds so simple – spend less that you earn and manage money, but it is strange how many people can’t follow those recommendations. They might spend their salary instantly and then they need to take quick loans and the interest spiral is ready.
    I thought that there would be, in the beginning of this year some new rules for the companies who give quick loans, but still they send a lot of emails where they offer loans for you very quick and easy. I think that this kind of companies cause problems to many people who can’t save money.

    Best regards,

  5. maurihi2013 says:

    All the above mentioned is so true. I really do wonder why people do not do the simple things that they know is good for them. It is same thing with tobacco, people know that it is unhealthy to smoke, but they smoke in spite of it. Your tips will easy show how simple, after all, “making money is”. You have to have common sense, will power and sisu. After that only sky is limit.

    Thanks for reminding me. I will start now.

    Best regards,

  6. annika0513 says:

    I really enjoyed reading your post. Thank you for the tips and for the advices. Like Mauri said, the tips that you gave us are really simple and they make sense. I`m going to follow the advices that you gave and maybe then I`m going to win my personal money game.

  7. olgator says:

    I really liked this blog. It’s so easy, can’t earn more – save more, be economical. Good tips for all times, even my grandma said first you should be a little stingy and put money in the jar, then praise yourself and buy something you dreamt of. But in modern world there are so many temptations all around. If you want something just now, it’s difficult to say stop to yourself. Nevertheless I always do my best in money saving.

    Best regards,

  8. seijamikkonen says:

    How right your are! These are excellent tips for all of us who would like to reach a target and have a nice standard of living.

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