1. Save only 10% of every money you earn (for starters)
When you receive your salary, the very first thing you do is set aside 10%. Spend what is left after saving. Not save what is left after spending. When you are still starting to save, your goal is just to be consistent and make it a habit. That’s it. Do not think 10% is too small or too slow. A lot of people get impatient so they increase their savings to more than 20% then end up skipping or stopping their savings after a while. So keep in mind that the first goal is consistency and not quantity.
There is this weird magical mystery about saving 10%. Even if you now only have 90% to spend with, you will not feel your budget decrease. It’s weird but it’s true.
2. Control Your Spending.
You might say you can’t save anything beause your income is already not enough for your needs. Think about this, do you know someone who is earning more than you but still say their income is “not enough”? Probably yes. Why do you think people with big or small incomes all feel the same way and say their income is not enough?
The answer is lifestyle. You see, as a person’s income grows their desires and cravings also increase. Remember in highschool when you could live with ₱100 ($2) a day? Why can’t you do that now? Because you are now used to Buying coffee in Starbucks, Partying on weekends, Buying unnecessary stuff online, Buying everything you want to eat. I’m not saying you should stop buying all your wants. In order to save 10% of your income you probably just need to skip a few coffees/beer or buy just 1 dress this month instead of 3.
You can buy things you need and can even enjoy things you want without spending more than 90% of your income.
3. Think of your Money as your slaves.
Many people are enslaved by money. But once you have some savings, money is now your slave. Every coin you own is a slave that you want to work for you to earn even more coins. Just keeping your money in the bank is like letting your slaves sleep all day. You put your money to work by investing it.
Example:If you have ₱15,000 ($300) savings you can buy a coffee vending machine. You let the vending machine work and may give you around ₱3000 ($60) passive income per month. In 5 months you will get your capital back and you can buy another vending machine. Now you have 2 vending machines and will earn ₱6000 ($120) passive income per month. You can repeat the same process again and again in different types of investments.
You cannot build a fortune and change your life by saving money. You need to learn how to make your money work for you.
4. Invest wisely
When you have money, you might be tempted in investments that promise large returns in a short amount of time. Though some may be true, make sure you study each opportunity carefully because as some opportunities are disguised as problems, there are also problems disguised as opportunities. All investments have a certain amount of risk. But the more you understand, the lesser is the risk for you.
Do not be blinded by greed. If you do not understand it, do not invest. Ask advise from people you know who are good in investing and handling money.
5. Ensure a future income.
Being broke when you’re young is fine. But being broke when you’re old, sick, and physically unable to work hard anymore is a tragedy. You and your family could suffer the consequences if you leave this unchecked.
If you follow the previous tips religiously, time will come when your investments will be producing more than enough money than you currently need. But do not settle right away. There are people who got big fortunes when they were young but became poor later in life. Make sure you have long term investments. Wise investments in Real Estate, Stocks, or Bonds are great ways to make sure you will have enough money to pay for all your bills until you die. This will insure not just your future but the future of your family.
We currently live in a world where we are used to getting things instantly. Instant messages, instant replies, instant noodles, fast food. Everyone is looking for the “Steps to become an Millionaire in 1 year”. People just can’t wait anymore.
There are things in life that you cannot rush. It takes time and some process. You may get an instant date on Tinder but you will never get instant Love. You may get instant friends on Facebook but you will never Trust them instantly. Acquiring wealth is a long process of developing your mindset, character, and understanding of life. It takes time to learn to save and invest. You will fail in some of your investments and you will need to try again and again until you get right.
Sounds too hard? Not really. Because remaining poor and struggling with money for the rest of your life is a harder path than what you will go through in the road to financial freedom.Loading Likes...