The Rules of Wealth
Money Planet* You can watch full video from our expert here
If you want different results, do things differently! You’ve probably heard the expression many times and that’s because it really is the foundation of change.
And it’s a particularly important lesson when it comes to personal growth. Investing your time, energy, and effort changes everything.
One of the most important things you can do? Read!
There’s one book that you’ll find on every rich person’s bookshelf: The Richest Man in Babylon by George Samuel Clason. This bestselling book shows you the truth behind your financial problems and how to solve them.
Don’t have time to read the whole thing? Here is one of the most important messages of the book.
Laws of Wealth
1. Save for the future, at least 10% of your income.
2. Invest your money and make it work for you.
3. Listen to experienced investors, not new-to-the-game risk-takers.
4. Put your money into areas you know.
5. Avoid exciting, adventurous (and unproven) investments.
As you follow the laws of wealth, you’ll find your mindset changing. This will create the foundation for having a new relationship with money. When it comes to managing and growing your money, the key is to have the right attitude.
Your Money Mindset
What is your current money mindset? Take a minute to write down something you believe to be true about money and the people who have money. Can you give me an example of a rich person?
Diversifying Your Income
When thinking of rich people, maybe Warren Buffett comes to mind. He’s one of the richest people in the world and isn’t shy to share his secrets.
One of his most important messages is: “Never depend on a single income. Make investment to create a second source.” But what do you invest in? And how? For Warren investing is easy, but what about the rest of us who don’t have so much cash to throw around?
To understand your income options, you need to understand the different types of income.
Three Types of Income
1. Active income: You sell your time to someone else for money. If you work, you get cash. The amount of cash depends on your skills. If you are an expert, your income will be at the top of your field. For someone with an average skill set, the competition is high and it keeps the wages low.
2. Semi-passive income: You control the process and are engaged. For example, you own an apartment and rent it at a profit. This requires work, but probably not daily.
3. Passive income: You do nothing. You invest your money, then the profits passively come back to you.
Business vs Entrepreneurship
When it comes to income, we’ll also hear a lot about business workers vs entrepreneurship.
Business works independently, you only control it, at any time you can transfer control to another person. It is passive or semi-passive income.
If you are an Entrepreneur, your organization depends on you, and it will work poorly without your interference. This is active income.
And remember, “The most important investment you can make is in yourself”. (Warren Buffet).
Learn more:
• How much does your time cost?
• Is it worth to put money in the bank?
• Insurance: is it so necessary?
• How to get multiple sources of income?
• Do you manage your money or does money manage you?
• How to know your profit potential?
• How to make money on stocks?