By Joshua Okello.
A lot of people are always trying to find out how to make money and multiply their wealth. The question is, “is there a formula towards wealth acquisition?” or “how do the poor get rich?” We are always familiar with this sad quote, “the rich get richer and the poor get poorer” but it doesn’t have to be this way. I am going to share with you how you can lift yourself up and gain wealth if you start planning your finances today.
Truth be told, the rich get richer because they can afford to be rich as well as diversify their portfolio. But this does not mean that any average person cannot attain this level of success. Everybody can, only that it will take you twice or even thrice the amount of work done by the rich to maintain their status. So are you ready to go to work? The biggest question to ask yourself is, “what affordable or free resources can I use to acquire capital assets?”
One of the secrets is to make super low risks with high returns. But before you even do this, you need to know how to venture into such risks and it is hard to risk if you have nothing to risk. So try these:
Pick a Side Job
Are you currently employed? If your answer is yes, how much do you earn? If your answer is not a lot, then have you considered taking another part time job? Remember: to compete with the best, you have to be the best yourself. It does not matter if it is a manual job or a white collar job. Just find something else to help you boost your income level. This is what I like to call leveraged expenses. If you get another source of income, you stand a chance of saving for your investments.
Some of the side jobs that you can try include:
- Publishing — Write a book in a field you understand better. There are so many people out there who would like to learn something from experts like you. This has worked for me and that is why I am sharing it here as my number one point. I have written books on entrepreneurship and success and you can find them here for as cheap as $0.99 cent. Click this Link to Grab a Copy. If you do not know how to write a book, then click How to be a Prolific Writer for a free manual with no sign up on how to write more than 3 books in a year.
- Lawn Mowing — Did you know that in your city, there are some people who are so busy, they have no time to take care of their yard or even clean their houses, or even go grocery shopping? How about getting paid to do that? Remember, you are starting out so you do not have to be picky after all, once you have your money in the bank, it does not read, “received from doing such and such a thing.” It is a saving!
It is also important to watch your expenditure. Write a budget and stay within affordable expenses. Only buy those things that you need and consider downsizing. You can sell those things that clatter your place online for a descent amount of money. This will keep you organized so you can focus only on those things that are important.
Be honest with yourself and your friends and let them know that you are cutting down partying because you are saving to buy a house. You will gain their respect.
Invest in Yourself
What do you want to accomplish? Are you familiar with that field? I always wanted to be in marketing, entrepreneurship, publishing and finance and those are the books that I read. You do not even have to spend a dime to educate yourself. There are a lot of free articles and online resources that you can use to learn and master your trades. Some even do offer certificates once you are done. (I will do an article on free resources you can use to invest in yourself this week so feel free to visit again).
Anybody who is interested in accumulating wealth should know at least the basics on time value of money, mortgages, interest rates, annuities, perpetuities and terms such as dividends and equities. Try and get as much information as you can.
Invest in Capital Assets
The best part of owning a capital asset is that it generates cash flow with least amount of your efforts. You can still be doing what you like to do and expect money to come in. One of the many capital assets that a lot of wealthy people go with these days is real estate. Find a house in a suitable location, purchase it and rent it out. Charge the amount that can bring you profit as well as pay the mortgage. Shop for a responsible tenant and lease the house to her/him and let them know that they will be in charge of the property. Within 15–20 years, you will have cleared the mortgage, and start earning profit on the house. If you make a number of purchases like this, you can imagine what you can be 25 years from today.
Borrow Money and Invest
Before you do this, make sure that you have done your math and only borrow when you know that the profit margin will be higher than the interest rate you pay and that is how you will be making profits. If done well, you can repay back the money and make easily any amount you set your mind on.
What you are trying to avoid is negative cash-flow where you have to figure out how to pay back the lender. For this reason, go for projects that will have a steady and predictable cash-flow.
Buy Mutual Funds
This is an investment that is funded by shareholders and traded in diversified holdings and is managed professionally. A lot of people do not know that they can earn interests on such investments. If you take it as an income generating asset, it can be profitable but first, make sure you do your research well before you invest in mutual funds.
Buy Dividend Stocks
Some dividend stocks pay quarterly and the wait period can be discouraging to some people. It could be a safe investment if you are patient enough to wait and if you get the right stocks.
Did you find this article helpful? Feel free to comment, ask questions and I will respond within 48 hours.
© Joshua Okello 2016.
Originally published at joshokello.com on April 13, 2016.
Originally published at medium.com