When it comes to money, most people want to play it safe and feel secure therefore, passion does not direct them. Fear does.
In this blog I will teach you how to make money work for you and how to afford luxuries by making the right investments.
The poor and the middle class work for money. The rich have money work for them.
“Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.”
There are 3 types of incomes
1. Earned income
2. Portfolio income
3. Passive income
Earned income is the ordinary income derived from jobs or businesses.
Passive income is derived majorly from real estate investments.
Portfolio income is derived from paper assets for example, stocks and bonds
Portfolio income is the income which made Bill Gates the richest man in the world, not earned income.
“The key to becoming rich is the ability to convert earned income into passive or portfolio income as quickly as possible.“
- Invest in income generating assets.
bonds, rental income and stocks are some great examples.
- save 25% and invest 25% from your income
- Be entrepreneurial and stop working for others
- Don’t make the mistake of investing in a liability thinking its an asset
If you are a student, you can invest 50% of your income or pocket money as you don’t have any responsibilities to run a household.
The rich spend their income on assets and their income is derived from assets as well. Its a cycle!
They make the money work for them.
Its very important to know the difference between an asset and a liability. And only buy assets.
A lot of people mistake liabilities for assets and waste their money
The true definition of assets and liabilities lie not in words, but in numbers.
What Exactly Are Real Assets?
- Businesses that do not require your presence. (Equity investments)
- Income-generating real estate
- Royalties from intellectual properties such as music and patents
How to save money?
- Search for promo codes on Grabon and CouponDunia when you shop online and apply them while checking out.
- Fix some amount of your income/pocket money and deposit it into your bank account so it remains untouched.
- Buy memberships like Zomato Gold and Gourmet Passport if you eat out a lot- it will save you a lot!
(use code: LMD6W to get 20% off on gourmet passport)
- SmartDeposit a fixed amount of your monthly earnings to earn more than your savings account.