One of the biggest lessons I learned about money growing up was from Robert Kiyosaki. Actually from his book Rich Dad, Poor Dad. The summary of it is this, don’t buy luxuries with your sweat, but with proceeds from your investments.
Aside from rent, feeding, and expenses incurred for daily utilities, you are shortchanging yourself when you pay for luxuries and non-essentials directly with what you earn. Instead, pay for it with the proceeds from your investments.
If you need a new car worth 2 million nairas, for example, and you have the full cash to pay for it, what do you do?
Go out and get the car, right?
Well, that is better than buying on credit or on a lease, but that is not how the wealthy and savvy guys you want to be like would go about it. Instead, here is what you should do, if you want to be rich; have the 2 million naira put up in an investment, and the interest from it can be used to finance the new car.
That might seem like a long route to go because naturally, we want what we want when we want it, especially when we have the means to get it, however, it is important to let wisdom take the lead.
By following the second route, you will eventually have the car you desire [maybe a better model] and you will still have an investment that will not only outlast the car but which can buy you more cars and other toys down the line.
If you take the pain to follow this principle, you will master one of the greatest secrets to wealth that the truly rich knows. Invest in assets and let your assets pay for your liabilities and luxuries soon you will find yourself among the truly wealthy.
When your income pays for your luxuries, it means you are living and working for the companies that provide such services, however when you let your investment take care of your ‘wants’, it puts you at an edge and gives more value to your efforts.
Let your income pay for the things you can’t live well without, like good food, power bills, basic clothing, while your investments pay for your wants (like a bigger big screen TV, the designer watch, and that car you’ve been eyeing).
The process of building investment can be daunting at the start, but then, that is why companies like Payvest exist to take the pain of investment off you. You simply choose your preferred investment and start to earn returns on a monthly basis.
Money Wisdom From Mr. Buffet
Once we get inducted into the working phase of life, we are likely going to be working for the greater chunk of our lives, we will work for more years than we schooled.
For the most part, we will work not just because we love what we do but also because we need to survive. There will be bills to pay, and obligations to meet up with, and the pay that comes from work will likely be the only way to earn what is needed to keep up.
So naturally, when we need more money to meet up with our increasing needs, the logical solution is to work harder, pull more hours where we can to keep more money coming in, and that is the first lap of the rat race.
But the truth is that you cannot work your way out of the rat race and into plenty. There has to be a way to leverage what we have to help earn beyond the limit of time and billable man-hours. That is obviously why Warren Buffet said: If you don’t find a way to make money while you sleep, you will work until you die. Of course, he should know, he is a billionaire investor who made the chunk of his wealth from investing and not working hard.
That is why investment is not a negotiable option if you must be rich and financially free. It is something you have to do and cultivate into a habit. Investment is the habit that defines if you will be wealthy or not.
It only makes sense to put your hard-earned money to work for you. Your money has to be working in ways that you can’t, when you go to bed, make sure your money stays up multiplying for you.
Don’t make others rich while going broke yourself. Build your own wealth the smart way.