It’s so cliche how to make your money work for you, is it really true for the average person?
Are there real opportunities and options where your money can really work for you? Well that’s what we’re exploring today at NewMarketMaster. If you want your money to work for you, you must understand the difference between gambling and investing.
Gambling vs Investing?
They are actually two very different things. Gambling is a strong word, but what I really mean is speculative investment. The society has trained us very well so that we can invest money in 401ks, IRA, annuities, stock market and home equity. I want to use an olfactory test to determine if I am gambling, making some speculation or actually making a real investment.
This is the difference. I have to ask myself some questions. This is the most important question. Will my investment pay me money? Is your investment paid to you? Okay, let’s check it. 401k, when you invest money, will you pay you? No, it is not. What about your personal retirement account? No, it is not. How about paying off the house? What about bricks? Equity? Is your sweat fair? No, it’s not! What about annuities? What about stocks? No, it’s not! Guess what? Society tells us to put all this money into everything, gambling. Know this – gambling does not make your money available to you.
Why all these are gambling?
First, look at the average. At least if you want to gamble or buy a lottery ticket, then do something that can make money. We put the money in the hands of others, and we were told that you dare not touch it. If you do this, we will impose penalties on you, we will tax you, and we will collect the proceeds from you. And, if you call your financial planner and tell him, hey, I ’m thinking about doing something else with my money, guess what they will do? You dare not touch it! That is the world we live in. You are not going to make your money work for you when you gamble.
How is a real investment different?
Well, a real investment will do three special things, and I will tell you what they are. Next, I will share with you two things you will see that I invest in every day. Because, I have invested in almost everything you can imagine, and I spent money on things that does not make money, I follow three rules. These three rules plus two investments continue to bring me dividends, again and again, every year, year over year.
We have finished gambling, we have completed lottery, we have completed speculation, and it is time to start making some real investments. When I say real investment, I will share with you two things I invest in and three things I hope these two investment will produce. Are you ready to write it down with pen and paper?
How to make your money work for you?
I invest in real estate as well as business.
When I invest in real estate and business, these are the three things they must do for me. This ensures how to make your money work for you.
First, I can buy them with equity.
This means there is a certain level of sweat equity, or the moment I step into the sweat equity, there is intrinsic value. Therefore, for enterprises, it is usually intellectual property and a business book. In real estate, this is an actual asset.
The second thing in the actual investment I want to make is cash flow.
Why cash flow? Because it paid me money. I need to all my investment to generate more money for me. They need to pay me dividends. Real estate may pay me quarterly or monthly, and successful businesses should do the same. Sometimes, companies pay more frequently than this. Maybe once a year.
But do you know? For decades, this was not the case with 401k or IRA. I could not touch, nor did it brought me any benefits. Therefore, equity is first and cash flow is second.
The third point is very important, growth.
What is growth? That means it must grow. This means that if I buy a house with an equity of $ 20,000, then the monthly cash flow gives me $ 200, then it needs to become more valuable in the future. Because the upfront equity, plus cash flow for longer duration, plus the regular pay chack, is equal to a happy investment.
In these 401K, IRA and other such 3% speculative investment, no one cannot control, cannot touch. Related to business, I expect my money to make me more. When I start a business or invest in a business, I want to have equity, I want to have cash flow, and I want to grow.
Friends, this is what I am looking for when investing in the real world. I will invite you to start dividing your investment into two different categories.
Those are speculative behaviors, that is, A. K. A. Gambling behaviors, and those are real investments because they pay you money. You know that after 15 years and hundreds of different investments, I did reduce the scope of the investment and the way I invested and worked for me was almost narrowed.
I hope you enjoyed reading this post on how to make your money work for you. Feel free to share with friends and family and help them with their finances.