The information that I am going to share in this post can exponentially improve your quality of life. As with anything, however, you must be willing and able to fully comprehend the new information and take appropriate action before anything in your life will change.
First and foremost; figure out what you need, then figure out what you like, then figure out what you want, and finally figure out how to get all of the above NOW! Not when you have the time – the only time you know you have is now (you could get run over by a bus or have a heart attack today)! Write a step-by-step outline that will enable you to achieve all those things that you need, like, and want. I will reiterate: there is no perfect time, you are alive NOW, you have options NOW, if you want to change your life; the only person who can do it, you guessed it: is YOU!
Save as much as possible (minimize all types of gambling, unnecessary spending and all the other “doodads” that are currently in your expenses). If you are living from paycheck to paycheck; your goal is to first make your income higher than your expenses; during this time, and from now on; you should be paying off your debt and looking for opportunities that can provide you with residual streams of passive income. Eventually you want to make your passive income higher than your expenses; at which point you could quit your 9-5 if you wanted, and work on gaining more passive income and really diving into whatever makes you happy!
We’re only human; Everyone purchases things and participates in activities we know are not the wisest choices… If you can figure out the minimum that you need to survive: to pay all of your bills and still have enough money left over for cheap food. You’ll have a better idea of how much money you MUST have coming in; and how much money you can start saving now!
There are ways to help you have more money in your pocket today (as in RIGHT NOW) Figure out whether or not everything you currently have, or are spending money on; is a need or a want (these are two very different words!). You may find that you already have all your needs (as a music lover; I couldn’t help quoting the Rolling Stones here), “You can’t always get what you want, but if you try sometimes; you just might find you get what you need.” Whether or not you have heard that song before and whether or not you like it; it has a good point: Usually, people already have everything they need, if not then work on your needs FIRST!
Now assuming you have all your needs: just work on minimizing unimportant “wants” that you don’t have, and selling the things that you used to need or want that you don’t anymore… If you follow this correctly; you should have more money in your pocket.; which means you are able to save/invest a lot more! NOW Find ways of getting those things that you truly need, then those things you really want. You should constantly be re-evaluating your needs and wants and continuing to plan accordingly!
Now I would like to talk about the true definitions of an asset and a liability. In layman’s terms, an asset is something that earns you money, a liability is something that costs you money. So let’s look at these in a little more depth. Here’s my favorite example that explains it the simplest. Your car is not an asset, it is a liability. You spent money when you originally purchased your car, then you spend money on gas and oil changes, then you spend money on repairs. when it comes time to sell it; the only way that your car becomes an asset is if you sell it for MORE than everything you have spent.
When you ask the average person what is their biggest asset most will say it is their house. 95% of the time, this is simply not true. Your house is a liability unless you sell it for more than you spent on it. This means that after your down payment, the sum of the money you spend on your mortgage, your utilities, upkeep/maintenance, and everything else you spend on your house on a daily, weekly, monthly, and annual basis; must be LESS than the amount of money you sell it for, and personally earn off of the sale.
A true asset is your job; you earn more money than you spend on it (you spend money on transportation to and from work). A true asset is your 401k or IRA (though they are taxable, so when you want to withdraw money be careful; see my last post for an alternative way to invest that is tax-free). Dividends earned from well-performing stocks are an example of residual passive income; and that type of stock can be an asset.
See the free online game cashflow classic at richdad.com for a fun way to learn how to become wealthy, feel free to contact me at firstname.lastname@example.org if you want someone to play with (who can answer any questions you have while playing it).
Thank you for reading and keep an eye out for my next post where I will talk about the law of attraction and how staying positive and making plans can help you achieve everything you have always desired!
See you soon =)