Investing can be a confusing topic. When we talk about investing we immediately think of the stock market and things like stocks, bonds, index, mutual funds and ETFs start to come up. However, there’s only one investment that always pays off and that is investment in ourselves and in our mind. You are the most important place you can put your time and money. We are living in a digital age where you can learn anything you want with just a few clicks. There are books and online courses that can help you learn exactly what you want from the convenience of your home. By improving your talents, skills and abilities, you’re investing in something that you will always have; nobody can tax it or take it away from you. Markets can crash, stocks and bonds can be lost, or material possessions can burn–however your knowledge is a tremendous asset that will often provide significant returns.
Manage Time
Majority of people sell time for money. They go to work for several hours in exchange for a paycheck. Unfortunately they use their money to buy (and finance) consumer expenses which serve to decrease your finances. A minority of people understand that time is your most valuable commodity. Your time is limited and you can’t create more of it. So, financially speaking, it is expensive to not make the best use of your time. The principle behind investing is to have your money work for you. The money you invest attracts more money 24 hours a day, 7 days per week.
Set Goals
Setting goals will help you accomplish them. When you write things down it is a lot easier to get things done. Once you’ve identified a goal and written it down, you’re more likely to change your behavior and take actionable steps to achieve that goal. To save, invest and become wealthy has a lot more to do with your mindset than what your income is. Since you’re reading this I know your goal is to learn how to invest so start by making a goal of saving and investing at least 20% of your income (following the 50/30/20 rule).
Choose Friends Wisely
“Over here we measure success by how many people successful next to you.” - Jay Z. You are the average of the five people closest to you. Whatever your goal in life is, whether it is to be rich, happy, powerful, positive or more productive, find people who share that passion and invest in their lives.
Read Books. Learn New Skills
Successful people read. Habitual reading will transform your mind in powerful ways: It stimulates your imagination, sharpens your critical thinking skills and helps you synthesize new ideas. There is typically a book on any topic you wish to learn about whether it’s starting a business, personal finance, etc. See some of my recommendations here.
Take Care of Your Body
If time is your most precious commodity, then your body is number two. You should spend time exercising regularly in order to have a healthy body and a healthy mind. Regular exercise has been linked to more energy, more productivity, reduced stress, improved brain power, better memory, and even increased creativity. It’s the best way to maintain a healthy weight, improve your mood, ward off disease, and to combat mental health conditions such as anxiety and depression.
Become the Boss of Your Money
One of the biggest myths about money is that you need to make a lot of money to be wealthy. It’s not about how much you make but what you do with the money you make - i.e professional athletes who go broke 2 years after their contract ends. The key is to spend less, earn more and INVEST. The majority of people make money from a job (exchanging time for money) and after paying taxes they spend what’s left on consumer expenses (liabilities) often times going over budget and utilizing credit cards. They then need to go back to work to pay for said liabilities - enter the rat race. The wealthy utilize a different strategy, they spend what’s left after saving and investing. They use money as a tool to build wealth first. So here’s how to become the boss of your money: Get rid of (consumer) debt, save 3-6 months living expenses for an emergency fund, start to make your money work for you (invest).
Create Multiple Income Streams
So you’ve gotten a handle on the idea of saving and investing. Now you want to earn more so you can invest more (wealth building) by creating multiple income streams. Perhaps you want to start a new business venture, get involved in real estate investing, or turn your passion project from a hobby to a business. Alongside earning extra income, it is a great way to build new skills. Who knows, one day you might be able to replace your 9 to 5 with something you are truly passionate about.
Now that we’ve gotten a mindset shift, let’s dive into the basics of Investing.
Over the next couple weeks I will be breaking down the topic of Investing and providing ways in which you can start investing right away. Sign up below to receive the Investing Series directly to your inbox:
