The internet is full of "get rich quick" schemes and it is actually how a lot of people originally came into Hive - how is that working out for you? But, I am a firm believer that unless extremely lucky (win the lottery or billionaire family inheritance kind of luck), there are very few shortcuts to generating wealth. However, there are some things that we should be looking at that can cut down the time it takes to build a nest-egg considerably - but how many people actually listen to the advice.
For the last few years, I have been talking a fair bit about many of these things and while I am not wealthy by any means, I am in a better position than I was previously, which was let's say, pretty bloody bad. Literally scraping coins together for grocery shopping at some points. So, being in a more comfortable position, even if for from great, is what I consider an accomplishment. But in general, there are a few key areas that we should be concentrating on if we aren't lucky enough to be wealthy by luck alone, but we want to improve on our current conditions.
It isn't rocket science, but that doesn't mean it is easy, because if it was, well, everyone would be wealthy, right?
I generally focus on a few areas of opportunity, most of which people do not tend to like, because they limit us or, they take work. For example;
Extra work.
Finding ways to increase income flows are vital for building wealth, because most of us are not going to be earning enough from a single job to do the job we need. Essentially, most people's jobs pay the bills and offer some extras here and there, but not enough for investing - and that is the goal. However, if we had say, 500 dollars left over to invest at the end of the month, it is pretty easy to magnify that by getting a second side job of some sort that adds another few hundred on top. It has to be thought about in percentages in this case, where adding 250 more from a couple shifts at a side job, adds 50% to the investment potential.
Investing is Spending.
As they say, you have to spend money to make money, but that TV you bought isn't likely to bring anything extra. Spending money to make money means to spend money on something that generates income, or will generate income. It is a business investment, or an investment into ownership that pays some kind of return, like a dividend. Taking those "leftovers" at the end of the month means continuously buying into a future potential position - but that costs doing stuff now.
First course, not Leftovers.
I said leftovers on purpose in the last paragraph, but in actual fact, this isn't what we should do. Instead, before spending, we should take out what we expect we will want to invest and put it straight into investments. However, this can leave us short at the end of the month, so it might be worthwhile getting in the practice of doing this, but putting the first one aside as a just in case, or putting away 20 percent of each of them for a few months until there is a kitty. But, create the habit that every month, the money to invest, is invested.
Think before Buying
Spending a little bit more time on our buying decisions can make a world of difference, especially if we are prone to impulse buying, (which I am). If we have to spend, making decisions that are able to help us in other areas (like our wellbeing) will likely satisfy that itch and bring some compounding benefits. Ultimately though, the goal is to increase the investable income amount, so any savings on spending can be diverted straight into investments.
Minimize and Maximize
Minimize debt by taking as little on as possible and that which is taken, paying off as fast as possible, weighing up returns on investments of course. For example, a mortgage with a decent rate might be a large monthly expense, but the amount made from investments will likely beat the interest rate increases, so it is probably better to keep building an investment portfolio. However, buying consumables on credit is going to make an impact, especially if it doesn't have those compounding benefits for wellbeing.
Similarly, maximizing what can be earned through work is also a good way to increase income, but it is one of those catch-22 situations, where often, the amount of responsibility has to increase also, which means that depending on career aspirations, it might be better off getting a second job instead. However, if looking to really build a career, there can be various multipliers like car and health perks and stock payments that can make a difference long-term too.
Easy!!
As with every action, there is a reaction and if we are generally behaving in ways that improve our conditions, we will make gains. The thing that people often overlook however is that there can be massive benefits in taking this journey, because once becoming interested, more and more opportunities arise, so there are additional compounding chances that weren't available, or weren't known about earlier.
As said, it isn't easy, otherwise everyone would be doing this - but the thing that makes it hard is that a move in this direction, competes with a lot of our other wants and desires. We value our free time, even though we waste it. We like buying stuff, even if we don't utilize it.
We want to invest, but we want a lot of things.
While we tend to argue about how valuable our time is, most of us don't actually think on why it is valuable and what is a valuable way to spend it. For most of us, we don't have that high level of financial security to ponder this, let alone do the things we want if we did, and we never will, because we spend our time chasing the daily needs instead. It is stressful and the little time we do have that is "free" is spent worrying about tomorrow and, too tired to do anything more today.
None of this is going to make us rich quickly, but it does mean that we are cultivating an investment field that perhaps one day, will reap enough benefits that we don't have to worry as much and, don't have to invest as much as we did earlier. And the earlier we start, the earlier it gets to a level we are comfortable enough to loosen up and slow down - or in my hopes, speed toward what I want at a faster rate.
Perhaps the lottery is the way to go.
You?
Taraz
[ Gen1: Hive ]
