There’s not a snowball’s chance in hell you’re going to get rich or have a comfortable retirement by just you working! Unless you’re a celebrity or CEO making millions per year, it’s not gonna happen, period!
If you’re reading this you probably know you absolutely need to invest to get rich.
But I hear you thinking….
“I would love to start investing, but I don’t have any saving and I’m already just getting by as is. I can’t afford to invest!”
Sounds familiar?
Well I’m here to tell you you can’t afford NOT to invest!
Even if you think you don’t have a penny left to spare, I will show you that YES you can afford to invest and where to find the money for it!
Here’s what I’ll guarantee you:
If you do exactly what I tell you to do in this guide, you will be putting aside money each and every month. You’ll eliminate your debt, and start building wealth! Even better: Start investing the money you save, and you’ll reach financial freedom!
Excited? Let’s dive in:
Pay YOURSELF first, always!
What if you lost your job tomorrow?
You’d be forced to live on 70% of your income (here in the Netherlands at least) until you find a new one. With less money you’ll need to make some cuts in your budget, but you could most likely keep yourself afloat.
The reason a lot of people think they can’t afford investing is because they buy stuff (they often don’t need) first. Then, when there’s little left for the month, they start thinking about investing.
Have you ever read “The richest man in Babylon?”
If you read the book you’ll know the #1 rule of getting rich: “Pay yourself first.” Before you pay anyone; the bank, landlord, grocery store, mall, or anyone, you pay your own investment fund!! After that, spend the rest on what you need and want.
Here’s what I want you to do today:
If you don’t already have one get a 2nd bank account with the sole purpose of holding money for investing.
When a dollar goes in, you never EVER take it out, except for investing in cash producing assets! Under no circumstance!
Call HR at the company you work at and ask if the can transfer 10% of your salary to the 2nd account instead of your regular one!
Done!
You’re already saving money each month! It’s automatic and you don’t see the money in your bank account. Saving this way doesn’t require any more thinking or discipline. You don’t even see the money in your account.
Yes, you would need to adjust. Except now, you pay yourself first. You’ll soon notice it’s way easier to still afford your must haves, than it is to “find the money” for your nice to haves (like investing).
Cut the crap!
It’s funny isn’t it… ?
When you look at the people that say they can’t invest, yet they just got some new nick nacks for their house, bought that 743rd pair of shoes and go for a Starbucks run daily.
I wonder why they don’t have any money left….
It takes just a couple of small cuts here and there to save you an extra $100 per month, perhaps even more. Simply take a moment to think about the areas where
Eliminate your debt!
Repaying your credit card bill is one of the single best investments you’ll ever make!
Think about it…
With your credit card you pay around 13%-22% in interest per year! With 10k on the card you’d pay 1300-2200 dollars per year in interest alone. That amount doesn’t include payments made to pay back the balance. It’s money that could have funded your retirement!
Here’s how I look at it:
If you pay back an extra $100, you pay let’s say $15 less in interest per year. Meaning that $100 investment is now earning you a profit of 15% per year! Pretty good ROI for something so easy, right? No investment knowledge required either.
Make it a goal to reduce your debt to 0, then don’t use your card where possible.
Get your monthly costs down
We all have recurring bills to pay every single month.
You can go through the motions and pay them every month, like the good citizen you are. Obviously, make sure you pay your bills. You don’t want to attract unnecessary trouble and fees. However, there’s a smarter way to go about your liabilities:
Pay, but get those expenses as low as you can.
As an example, interest rates are incredibly low right now. If you were to get a mortgage, you’d pay under 5% interest per year. Look at your current mortgage, how much do you pay there?
Chances are you can cut your interest costs by refinancing your home. Let’s say you can save 3%/year on a 100k mortgage. You just earned yourself $3000 per year that you can now invest.
Check the same thing with your gas, water, electric and other bills to see what you can save.
And importantly…
Put that money in your 2nd account! No use blowing it all on a party to celebrate how much you saved.
Put the power of compounding into action!
If you follow this guide, you’re already saving for your investments, and I commend you for that!
Let’s just give you that 1-up shall we?
It’s simple, but if you discipline yourself to do it, everything will change!
Remember cutting your credit card bill? What I want you to do is take note of how much you “invest” into paying it back, and how much difference it makes in your monthly bill.
And then…
Take that difference, the amount you made by paying back, and put that into your investment account (or pay off more debt)! Same thing with your mortgage, electric and gas bills; put the difference away!
Finally:
When you invest, do the same thing!
Take your earnings and reinvest those as well, especially the first few years. It’s the power of compounding, the 8th world wonder as Einstein put it.
The power of getting (instead of paying) interest over your earned interest! It speeds up your wealth gathering tremendously. All the small bits we’ve managed to save you here and there add up over time and become significant amounts!
And that’s literally it!
Even if you have never saved a penny in your life, you can start your journey to be an investor and becoming financially free… today!
You now know the road ahead, now take it for crying out loud!
This post was written by@maikelmichiels and edited by
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