Two people are the best choice. They have similar backgrounds. Both are highly hard-working in similar positions. But one has to live day-to-day while the other is enjoying an expanding bank account and investing.
What is the difference between these two individuals that causes this difference?
The question has been bothering me for many years. Because, as you can know, I used to live the lifestyle of payday to payday. I was educated and was a hard worker. I even had a budget but was always in a state of financial ruin prior to the time my next paycheck arrived.
While I was living a blissful life outside, my heart was worried. I thought, “Why is it others always seem to have money to spend while I work my fingers to the bone and barely scrape by?”
I can remember when I was a child growing up, our Aunt Ruth and Uncle Harry. Harry and aunt Ruth were both billionaires. They were treated by our parents like royalty, but they dressed and spoke just like everyone other people. What was it that they had different in comparison to my Dad and Mom that made my Aunt and Uncle millionaires?
I remember my Uncle Harry instilled in us children to make savings. What he didn’t explain to us was what was the best way to do it? This was the sum total of the financial training I received.
A few years later, after an embarrassing bankruptcy, I came to the conclusion that I was required to know how to manage money more effectively.
Since then, I have come to recognize the four principles of money that distinguish the have’s from the have-nots in the world. The wealthy are governed by these four rules: The have-nots don’t.
In terms of work ethic and education, They play a significant role in the world, but they are not directly related to creating wealth, in my opinion.
Here are four fundamentals that help build wealth.
1. The Movement of Money Creates Wealth.
People are in a situation where the people…
Get paid… money moves
Pay your money… Money moves.
Utilize ATMs… the money circulates.
Purchase goods or services… Money circulates
You can save or invest your money… Money circulates
In all of these situations and many more individuals earn money whenever money is moved. If you do not grasp this initial principle, your possibilities for getting rich are minimal.
What you should know about principle one is that you need to be involved with money in order in order to profit from its movement. This means that you have to be aware of the movement of money. Look for ways to stay at the forefront of money that you are aware of is moving. Today everyone is able to.
Additionally, the speed of money’s movement determines how quickly wealth is generated. This is common sense. However, many people don’t realize this in the realm of money. Let me provide you with an example.
If you could choose between one million dollars or one penny per day that increases in value each throughout the month, what would you prefer?
If you had asked for a million dollars, you’d have missed out on $5,368,709.12. This is how much one penny, which doubles every day, could be worth in just 30 days.
It’s known as exponential growth. Its power is something that few know in the realm of money and the speed of its growth.
Velocity describes how tiny amounts of money that are invested in opportunities can expand into huge fortunes. A lot of people are scared of investing even just a modest amount of money for the fear that they might lose it.
2. Pay Yourself First
This was one of the most challenging concepts for me personally to grasp my mind around. It’s because I learned to first pay the bills prior to making myself pay. What was left became mine. The problem was that I generally consumed what was left, but I had nothing left.
When you know the reason you should pay your bills first, then a new world is opened. You will not only be able to make your payments in time, but you’ll actually build a nest egg.
The most common complaint about making yourself pay first is that it is possible that there isn’t enough cash left to pay all your debts.
The solution is to make your own budget which will inform you how much you are able to spend on yourself. The amount you put aside isn’t as significant as following through with it!
Know this: The biggest economy to consider is your own one at home! If you don’t pay yourself first, there is no economic activity.
The advantages of making payments to yourself first are immense. It opens the doors to investing in your future and making the most of the opportunities that are presented to you. How often have you thought you had 5 or 6 hundred bucks to use to benefit you?
Notice: In the current economic climate, borrowing and credit card debt have become the new method of saving money. The average US household’s credit card debt was $15,279 in 2013, according to Federal Reserve statistics. It is the biggest threat to financial independence.
Remember our first principle? The movement of money generates wealth. When it comes to personal debt, there is a third party making a profit when you make your monthly debt payments.
3. Make Money Work For You
Consider it this way. If you’re looking for long-lasting prosperity, you won’t be working at a desk or earning a wage. Better put your money to be used for your benefit.
That’s what I mean by putting your money into ventures that are able to make money moves quickly. Don’t think about bonds, stocks, or CDs. They are old-fashioned instruments that transfer cash too quickly to keep ahead of inflation.
In today’s market, there is a myriad of new opportunities to invest in where the return on investment is much higher than traditional investment options. Find them and invest your money for yourself.
Remember velocity. The faster money moves, the greater your wealth will grow.
4. Associate With Others Who Do the Same
One thing I’ve learned in my early days in business was never to let someone who earns $30,000 per year describe how they can earn $200,000 per year… or why you shouldn’t.
If you are looking to build lasting wealth, join forces and collaborate with people who have a solid understanding of and adhere to these four fundamentals.
Look for successful people to learn from their experiences. Pay attention to their opinions and advice. Create partnerships and collaborate with them when the chance arises.