Money management

Written By: Ehsan Jahandarpour

Money management the process of managing money which includes investment, budgeting, banking and taxes. It is also called investment management. Money management is a strategic technique employed at making money yield the highest of interest-yielding value for any amount of it spent. Spending money to satisfy all cravings (regardless of whether or not they are justifiable to be included in budget basket) is a natural human phenomenon. The idea of money management techniques is developed to plummet the amount which individuals, firms and institutions spend on items that add no significant value to their living standards, long-term portfolios and asset-basins. Warren Buffett, in one of his documentaries, admonished prospective investors to embrace his highly esteemed “frugality” ideology. This is the making of every financial transactions to be worth the expense: 1. avoid any snob-appealing expense 2. always go for the most cost-effective alternative (establishing small quality-variance bench-mark, if any) 3. increase expenses more on interest bearing item than any other thing 4. establish the expected benefits of every desired expense using the canon of plus/minus/nil to standard of living value system. These techniques are investment-boosting and portfolio-multiplying.