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If you geek out on personal finance, you'll notice there are basically 5 core principles to master:
1. Learn to save
2. Increase your income
3. Create multiple income streams
4. Invest what you're able to save
5. Reinvest earnings from investments
Quick explainer on each:
1. Learn to save
2. Increase your income
3. Create multiple income streams
4. Invest what you're able to save
5. Reinvest earnings from investments
Quick explainer on each:
1. Learn how to save
Doesn't matter if you make $50k or $250k, live below your means and save. If you can't save a penny when you're making $50k, you'll just run up your expenses when you're making a lot more.
Pay yourself first then use what's left to cover expenses.
Doesn't matter if you make $50k or $250k, live below your means and save. If you can't save a penny when you're making $50k, you'll just run up your expenses when you're making a lot more.
Pay yourself first then use what's left to cover expenses.
2. Increase your income
There's a limit to how much you can cut but no limit to how much you can earn. Invest in yourself (books, podcasts, courses, coaching, learn a new skill in your spare time) because they can pay off tenfold.
Which brings us to the next point...
There's a limit to how much you can cut but no limit to how much you can earn. Invest in yourself (books, podcasts, courses, coaching, learn a new skill in your spare time) because they can pay off tenfold.
Which brings us to the next point...
3. Create multiple income streams
Relying on 1 source of income is risky. Plus if you have a W2 job in a non-commission based role (i.e. sales) your earning are capped. There's no cap on what you can earn from other income streams.
Sell your time, start a biz, and/or...
Relying on 1 source of income is risky. Plus if you have a W2 job in a non-commission based role (i.e. sales) your earning are capped. There's no cap on what you can earn from other income streams.
Sell your time, start a biz, and/or...
4. Invest what you're able to save
Since you've learned how to live below your means and increase your income by being more valuable as an employee or starting a biz/side hustle, now it's time to compound that $$ through investing.
Stocks, real estate, whatever. Finally...
Since you've learned how to live below your means and increase your income by being more valuable as an employee or starting a biz/side hustle, now it's time to compound that $$ through investing.
Stocks, real estate, whatever. Finally...
5. Reinvest earnings from investments
Take the money you make from investing (dividends, profit from business, cash flow from real estate, etc.) and keep investing it.
This is the true cheat code for compounding wealth and growing your investment faster.
Example:
Take the money you make from investing (dividends, profit from business, cash flow from real estate, etc.) and keep investing it.
This is the true cheat code for compounding wealth and growing your investment faster.
Example:
You invest $30k into a down payment for a rental property and earn an 8% cash-on-cash return year 1 ($2,400). Since you can't buy another rental property with that $ yet, let's say you reinvest it in a dividend stock that earns 5% per year.
So year 2 you make another 8% cash-on-cash return on your rental property ($2,400) PLUS 5% on that $2,400 cash flow you reinvested from year 1 ($120). So in year 2 you're now making $2,520/year from your initial $30k investment, whereas in year 1 you "only" made $2,400.
Now think about this on a much larger scale when you have at least a couple hundred thousand dollars that you've invested and you'll understand the reason why investors always preach the power of compound interest.
Money begets money.
Money begets money.
