By, Wendy Day (www.IndustryReport.com) 3/2013
I admit being responsible isn’t immediately fun. But longterm, it rocks!! The consequences of saving money to invest far outweigh the stresses of living check to check, the way most of us do everyday.
If you are making NO money, this article isn’t for you. I’ve yet to figure out how to turn no money into some money, legally. But if you have some income, you need to read this. You owe it to yourself.
In the urban music community we tend to focus on short term goals (not getting evicted, keeping our phone on, looking good, etc) and immediate gratification (‘if I put rims on my car and buy this diamond and gold pendant, I will be more attractive to women’). I won’t get into the oppressive mindset that caused this thinking, but I will say that we have to change it so as to reduce our financial struggle and to increase our ownership to enhance our power and freedom–financially.
Here’s what I’m thinking:
1) Become A Passive Income Junky & A Ten Percenter
If we can force ourselves to put aside a small percentage of all the money that comes in (the money gurus suggest 10%–I say as much as you can afford above 10%), we can invest that money in businesses and/or investments that bring us money with little or no direct work on our part.
I heard a real estate investor say it best: if you can invest money into something that makes you money while you sleep (passive income), that’s the best return on investment you can find. We all get 24 hours each day. If we work an hourly job for our income, we max out our income at 16 to 20 hours per day. If we invest, there is no time limit; we are solely limited by our ability to invest money and our knowledge of how or in what to invest (which can be taught, so we can learn investment strategies).
2) Study Investments That Interest You
Invest in what you know. If you decide real estate is for you, invest in markets you understand and know. Study real estate while you are stacking your down payment on your investment property. Stock market? Invest in companies or industries that you understand and know. Study stocks, bonds, and options while you are acquiring your investment funds. If you invest in royalty producing income, understand what you invest in. Study royalties and publishing, etc. Understand what makes the values increase or decrease. Learn how to buy low and sell high. Love money and understand how to flip it? Can you handle something high risk? Maybe foreign exchange, commodities or options are for you.
The point is, pick an investment strategy that interests you and learn all you can about it. Team up with other successful investors to maximize (combine) your investments and income. Spread out your investments across multiple platforms so you reduce your risk of losing money. But there are common underlying themes here: learn what to do and depend on trustworthy and successful advisors to help you.
3) Learn From The Best
Find a legitimate financial advisor who can advise you. Let those who are good at flipping money advise you best. Choose someone willing to educate you and explain the basics to you. Get referrals from others who’ve made money with their advice. Stay on top of your investments constantly. It’s YOUR money. You can hire a broker to invest for you, but understand how he or she makes money from your money so you can stay on top of their trades. One of my friends lost $120,000 in the stock market in 2008. When I asked how, she couldn’t explain it to me. That means her broker had too much power and too much free reign. Losses do happen, but a smart investor knows how and what went wrong to prevent more losses down the road.
4) Be Smart About Your Spending
Delay gratification on all depreciating assets and only buy appreciating assets unless you are using excess money to do so. Buying an expensive car or outfit isn’t necessarily a bad thing IF you can afford it. So rather than buy a car with $2,000 a month payments, why not invest in real estate that brings rental income of $2,000 a month and use that income stream to pay for the car? One of two things will happen: either you will prefer to keep reinvesting in yourself and build wealth foregoing the high priced car, or you will buy the car that costs you money you’ve earned from your investments while keeping ownership in the appreciating thing that produces the income (in this example, real estate).
The key to investing is to have money to invest. Start small if you have to, but start! Put aside as much money as you can for investment–when you see how quickly it grows, you will want to do it over and over with as much as you can spare. Study investing and make smart financial decisions. Find trust worthy advisors and act on investments you understand that you have researched and studied (but don’t over study so much that you never act). And lastly, learn the gift of compound interest.
The sooner and more you start saving, the wealthier you may become. Wealth is a heck of a lot better than being broke. In today’s society, no one should be broke. Develop habits today that will benefit you, your family, your companies, and your empire. You deserve it!! Get to it. Start building wealth today.
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