So it’s absolutely normal to feel lost, you have not been taught to make money independently other than working for someone else, that’s why here we will take a look at some of the principles that if you understand, you will most likely find your path to financial independence.
Let’s make one thing clear, no matter how great is your job, it will never get you to financial freedom because you are paid according to the hours you work but the problem is that there is absolutely no way to have more than 24 hours a day.
So if you try to get a higher paying job, your income will still be relatively limited, therefore looking for a better job is not really the best option. Just a little disclaimer here, of course, get a better job if you can but the point is, in the long run, it is not the best strategy to become financially free. Then the question is, What should you do?
Well, make someone else work for you. Like your money
In other words, it’s known as investing, which word you probably already heard. That’s why the gap between the poor and rich is constantly increasing, the more money rich people make, the more they invest. In fact, that’s how most of them started initially, they first invested a little bit since that’s all that they could afford, and as their income grew, their ability to invest also grew.
It is exactly like running a business, you guide your employees to come up with a certain product or provide a service that will generate income. But in this case, your employees are your money whom you have to manage. Usually, when we think about investing, we imagine buying an asset like an ounce of gold for example, because over time the price of gold usually increases, but the problem is that it does not produce anything over time, it just stays the way it is and that’s why it’s not an efficient way to invest, no wonder they are known as unproductive assets.
On the other hand, there are productive assets like a small business for example (shop), you buy the business and at the end of the year, you still have got the business but also the money that it has been generating over year. Of course, there could be a lot of other examples like a house if you rent it out you will have a cashflow every month, or a farm that produces crops. The general idea is that you should buy something that will at least keep its value and at the time produces something that could be turned into an income.
But not everyone can afford that, buying even a small house or a business costs a lot of money, where will I get that. Even if I sleep in the streets and do not eat or drink anything and I save every single penny of my income for the entire year, which is pretty much impossible, I still won’t be able to buy a little tiny house. Well, that’s why we have a place called the Stock Market.
Businesses worth millions or billions of dollars, they are divided into little stocks that almost anyone can afford them. Owning stock is like owning a little piece of the company and the company will share with you a tiny part of its income every year.
In other words, the more stocks you own the more dividends you will be paid. Of course, it’s not as easy as it sounds, so make sure you learn first how the stock market works before you through your money in, otherwise, you will find yourself broke in no time. But that’s a perfect example of how you can make your money work for you. You should not necessarily get into the stock market, you can get creative and try something absolutely different.
I remember a friend of mine once, started buying containers and renting them out to companies, people, and whoever needs them. They don’t cost much but at the same time, it’s possible to rent them out for a good sum of money if you know how to do that. In summary, focus on building more streams of income. When you spend your money on getting a productive asset, you will have a constant flow of money, it might not be much in the beginning, but with each extra stream of income, you will have more opportunities to buy more productive assets.
So, what do you think is the best investment you can make. Let me know in the comments.