10 Powerful Personal Finance Quotes

Introduction

Quotes can be interesting as well as powerful. Sometimes, however, there might be an element of exaggeration in them, in order to make them more attractive. This can be ignored. Good quotes condense the wisdom into a small piece of text, which is easy to remember and may influence our behavior positively.

It may be pertinent to try to understand a particular subject through apt and powerful quotes. With this in mind, I am going to include here a list of quotes that are full of financial wisdom. These can provide some very useful lessons in personal finance.

Pay Yourself First

This quote has been taken from George Samuel Clason’s book, “The Richest Man in Babylon”. It explains a very powerful strategy. The importance of saving in personal finance is fundamental. It is a prelude to investing that can, subsequently, lead to financial freedom.

If you want to have some seed money for investing, you will have to, regularly, save a portion of your income. As soon as you start earning, you should start saving 10-20% of it. The best way of doing it is that whenever you receive your salary/ income, immediately set aside the amount you have decided to save. It works as a psychological hack. Through this, you send a signal to your mind not to consider your savings as part of the income for immediate spending rather something to be preserved for investing.

There is another quote, attributed to Warren Buffett, that has a similar meaning. It goes like this, “You should not save what is left after spending but you should spend what is left after saving”.

Compounding is the 8th Wonder of the World

It was said by none other than Albert Einstein. It means that when money is left to compound for a long period of time i.e. 20 to 30 years or more, it gives amazing results. Just see the following:

26% CAGR (compounded annual growth rate) in 10 years is 10x. This means that 1 becomes 10 in 10 years at 26% CAGR.

in the same way, 26% CAGR in 20 years is 100x!

and 26% CAGR in 30 years is 1000x!!

This amply illustrates the power of compounding.

Don’t Work for Money, Make Your Money Work for You

This is a quote from Robert Kiyosaki’s book, “Rich Dad, Poor Dad”. It highlights the importance of passive income. Of course, in the beginning, you will have to work for money. However, through saving and then investing consistently and skillfully, you are putting your money to work. Your invested money works for money better than you can work for money. This way a time will surely come when your passive income will surpass your monthly requirement of money and you will not have to work for money anymore. Robert Kiyosaki also emphasizes the need of building assets instead of collecting liabilities. According to him, anything that puts money in your pocket is an asset and anything that takes money out of your pocket is a liability.

There are Two Rules of Money……

Warren Buffett said, “There are two rules of money. Rule No 1: Never lose money. Rule No 2: Don’t forget Rule No 1. This is an interesting way of emphasizing not to lose money at all. You may slow down your pursuit of making new money but you should never risk losing money that you already have. The importance of not losing money can be understood through this example:

If you lose 50% of your money, you will need a 100% gain to break even. If you lose 90% of your money, you will need a 900% gain just to break even!

Money Cannot Buy Everything But……

Warren Buffett said, “Money cannot buy everything but you should have made enough money before saying such a thing. This is an interesting quote. It hints at a confusing relationship some people have with money. Money is a reality and it has an importance in one’s life that needs to be kept in perspective. It should neither be exaggerated nor understated.

Don’t Kill the Goose, Eat the Eggs

This is again a very useful quote. It underscores the need to preserve the principal or the invested amount. We should never dismantle a good investment and fritter it away. Instead, we should be content with the income it is yielding. The income should either be used to fulfill our needs or be reinvested to earn more money.

The Best Thing Money Can Buy is Financial Freedom

This quote is from Robert Berger. He is an attorney and founder of the popular personal finance blog doughroller.net.

I personally found it to be fascinating. It is so powerful that it can help you redefine your relationship with money if you are struggling with it.

What is financial freedom? It has been best defined by Tony Robbins: Working because you want to, not because you have to is financial freedom.

Money is a Terrible Master But an Excellent Servant

P. T. Barnum was an American showman in the 19th century who was instrumental in popularizing musical concerts, public museums, and the circus.

This quote is again very useful in understanding what can be a healthy relationship with money. The importance of money in our lives is relative, not absolute.

A Penny Saved is a Penny Earned

In this quote, Benjamin Franklin: one of the founding fathers of the United States, has succinctly summed up the importance of saving money. Saving some fraction of our earnings can be the starting point of our journey to financial freedom. Another respected name in the investment world, Charlie Munger said it very well: If you spend less than what you earn and invest the difference intelligently and consistently for a considerable length of time, it is impossible not to get rich.

If You Live for Having it All, What You Have is Never Enough

Vicki Robin is an author who is famous for her book: Your Money or Your Life. She has explained, very well, what could be a healthy balance between ambition and contentment.

We may like to earn more and have more than what we already have. There is nothing wrong with it. However, it is important not to forget, rather deeply appreciate what we are already blessed with. Gratefulness is the key.

Conclusion

I have included 10 of my favorite personal finance quotes here which, in my reckoning, can be very useful for the reader. If we are beset by financial worries, the first thing to do is to review our relationship with money. It is one of the most important resources. But all said and done, it is only a resource, nothing more than that. A healthy relationship with and deft handling of money can address many of our financial woes.

How did you find this content? Please comment and give suggestions, if you have any.

My other articles you may find useful are:

How to Make a Personal Financial Plan – Basic Considerations

Personal Finance – A Suggested Checklist

Investment vs Speculation

A Brief History of Money

Why I Started a Blog on Personal Finance

Anatomy of Financial Risk

Debt, Equity, and Real Estate: An Overview

Retirement Planning

How to Compare Equity and Real Estate as Investment Options

How Stock Market Works and How to Work in Stock Market?