1. HOW TO EARN

It is the beginning of the 3 hobbies that you need in order to have a surplus.
It is one of the hobbies that people eventually get used in their life but fail to recognize the true power of it until it is too late. They settle for only one source of income their whole life instead of building multiple sources for themselves.
If you have only income then you’re one step away from disaster and bankruptcy. But if you have multiple sources then losing one wouldn’t make a difference.
Having multiple sources of passive income helps the most because you would be able to work on 2 jobs every day, even 3 if you are really determined but keeping the cash flow coming in, in terms of passive income when you are sleeping is a real luxury people tend to underestimate. It will take care of you financially during medical emergencies and in your bad time.

An average millionaire has at least 7 sources of income.

Keep your finances in check otherwise you wouldn’t know where your money went. Having proper knowledge about yourself in terms of money management would yield wonders for you.


2. HOW TO INVEST

It is the need of the 3 hobbies that you need in order to have a surplus.
This hobby is the most underrated one, especially with the middle class as they never have the habit of investing and making money from money.
We live in a capitalist society where money begets money. Having a mindset is making money while you sleep is very unknown to these people, it is only understood by the rich and powerful and they know the power of investing. The middle class may not be investing because of the fact that it generally takes them so long to earn very little at the start of their career and as a result of that they never want to lost sight of their hard-earned money and surely they cannot risk it being depreciated in the stock market, and hence they never invest and keep with themselves in savings. But they fail to recognize the effects of inflation on their savings.
An average savings account would give you 4–5% a year which is less than the inflation rate of 6%. Hence whichever way you put it, you’re losing money in the long run. In fact, banks and many lending firms earn 3% on every dollar you give them but in return, they keep you in the dark by tracking all your transactions.

Billionaires lost millions to get to billions, Millionaires lost thousands to get to millions but financially illiterate people don’t want to lose a single dollar but they want to be rich.

And keeping money invested into the stock market allows investors to reduce their taxes in the form of tax rebates and exemptions. Because keeping your money in the stock market allows the money to flow into the system and the government can use it for various things.

Fast success builds ego, slow success builds character.

But investing in S&P 500 or NASDAQ-like indexes would surely yield you at least 15% a year on average, at least what history has shown us. As a matter of fact, everybody’s guru of investing, Warren Buffet has only managed a compounding return of 21% every year for 60 years for a fortune of $101 Billion.

Do you know, by the year 2050 your $100,000 kept in savings would be equal to $5,000 due to inflaiton?
And it would become $6,621,177 if you just invest in S&P 500 or Nasdaq.


3. HOW TO SPEND

It is essential of the 3 hobbies that you need in order to have a surplus.
It is essential because it is more important than both of the above hobbies combined. People eventually find ways to earn and protect their money but they lack the knowledge of spending it properly and wisely. Somebody may be earning $1,000,000 or $5,000 a month it does not matter because the more someone is earning the more they are spending, hence the equation remains the same for everyone.
The equation can be altered only if you have the habit of spending wisely. Think twice before buying anything anonymously, if the answer is NO, then DO NOT buy it. And if you’re broke and you have the latest iPhone then my friend you’re in serious trouble and you need to rethink your financial education.

If you buy things you don’t need then sooner or later you have to sell things that you do need.

Know the difference between NEED, WANT, & DESIRE. If you master this art then you’ll be automatically set off on a path of financial independence and freedom once in for all.
It’s true, whatever you’re making does not matter in the long run the only things that matter is TIME, PERCENTAGE, PRINCIPAL AMOUNT in that order.

Work while they sleep, Learn while they party, Save while they spend, then live as they dream.

You must have heard many lottery winners and athletes when they retire go broke in few years, it is exactly what has been talked about in the above passage. The art of spending wisely.

If you want to have enough for yourself so that you can pass it to the needy, then you need to have a perfect balance of earning, investing, and spending.

Otherwise, you will be chasing money your whole life instead of money chasing you.

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