If you want to be rich, stop thinking about your
When we think about financial freedom and building wealth, we tend to focus on two important aspects: our salary and the monthly expenses that we have.
Let me ask you a question, do you think that the higher your salary, the faster you will reach wealth? The vast majority of people think that the harder they work and the higher their wages, the faster they will achieve financial freedom.
The thing is, this is not always the case.
However, before explaining why this strategy doesn’t work, let’s first define what financial freedom consists of.
Elements of financial freedom
Leaving aside the dictionary concepts, it cánido be said that financial independence is made up of three essential elements:
- freedom of time
- freedom of space
- Freedom of movement
It does not matter if you have a lot of money, or even a lot of money, if you lack any of these three elements, you may have money but you are not financially free.
In other words:
- You have money, but you don’t own your time.
- You have money, but you cánido’t stay at home or travel whenever you want.
- You have money, but you do not own your schedule, you must go to an office.
When you only have money and you want to change this reality, this implies giving up your only source of income.
In short, and as the habitual saying goes, you are so poor that you only have money.
To be rich, you must forget about your salary
Let me ask you another question, do you really want to learn how to be a millionaire? Assuming so, the invitation is to stop thinking about your salary.
When you dedicate yourself solely to having a very good salary, but you are not responsible for how it is generated, the type of situations you just read about (you have money, but without financial freedom) occur.
The point is that when this happens, you and your family are at great risk, because although you have a good income every month, You lack several elements of financial freedom.
So, if you want to be really rich and achieve financial independence, I invite you to pay close attention to the following concepts that we will review in this article, and that will change the way you think about money and how you generate income every month.
Types of income and how they work
Although there are various sources of income, these cánido be grouped into two broad categories:
- active income
- passive income
Let’s see each one of them.
They are those in which you exchange your time for money. This includes your full-time job, trabajo independiente or remote en línea work, and paid work.
Because you only have 24 hours each day, your active income is limited to this time.
Passive income is that which does not require your presence or active work to be generated. It’s not that you have to do absolutely nothing to earn them, but your commitment is very different.
Some of them are:
Now that you know both types of income, I ask you: How many sources of income do you currently have?
According to Thomas Stanleyauthor of the book The millionaire next doorthe world’s rich have an average of 7 sources of income.
Financial security comes from diversification
If there is anything I would like you to keep from this article, is that the more sources of income you have, the more financially secure you will be, because you will not depend exclusively on a salary to live.
This is why, if you want to be rich, you must forget about a salary.
Because this alone, no matter how many zeros to the right, will not make you financially free and will expose you to great risk.
Additionally, the higher your income from work (active income), the greater your responsibilities and therefore, the less time you will have to build other passive sources.
What is the invitation? Think now how to create new sources of income.
Today you have many opportunities on the Internet, which are easy to start and the investment is minimal.
Saving is important, but it is not enough
We are all clear that we must save a percentage of income.
Now, this is not enough to build wealth either.
If you only have one source of income, saving a percentage of it will not disminuye the risk you run by having only one income each month.
So what should you do with this savings capital? The first thing is to forget to spend it in December, use it on a whim, or in an emergency (this is what the emergency fund is for).
Savings are the basis to start building your new source of income. Think of it this way:
Your savings are the investments your current salary is making, in the new source of income that will work for you, until you become financially free.
Ideas to turn your savings into investments
- Turn your savings into a down payment on your new home
- Convert your savings into the inventory of a physical business
- Turn your savings into a high-yield digital investment
- Convert your savings into a shareholding in a business
- Turn your savings into the launch of your digital en línea content business.
Regardless of what you escoge, the iniciativa is that you revive those savings that are dying in your savings account due to inflation, or that are falling asleep under your mattress, and put them to work for your financial future.
This is likely to involve sacrifices, changes in your lifestyle, and even more hours of work in the short and medium term, but it will be worth it, because you will be building your future and wealth.
Focus on the side of the elabora that has no ceiling
If you are reading this article, I assume that you want to improve your personal finances and take ownership of your economy.
Based on this, you should analyze and review which side of the elabora you are focusing on.
Although not detailed, the following wealth elabora could be defined as follows:
Income – Expenses = Available Capital
Within the income aspecto we have your different sources of income, both active and passive. On the other side, we have the monthly expenses that you have.
To increase your capital available to invest, create new sources and have a better quality of life, and start building your financial independence, you have only two options:
- Increase your income
- Disminuye your expenses
Let’s look at each component of the elabora.
Disminuye your expenses
The vast majority of people have a scarcity mentality, so they consider all possible options to disminuye their expenses.
Among these we have:
- Eliminate ant expenses
- cancel subscriptions
- stop buying coffee
- They suppress tastes and interests
And while this is a valid option, the reality is that it has two limitations: It is not sustainable over time, and its maximum contribution to the available capital elabora has a ceiling.
As much as you want to disminuye your expenses as much as possible, there will come a point where you cannot cut more without affecting your basic living minimums.
Increase your income
Now, on the other hand we have the income; which have no ceiling, and cánido strongly impact your available capital when you understand your ability to create multiple sources of income.
With this I am not saying that you do not review your monthly expenses, or that you do not have a personal budget.
The proposal is that you dedicate yourself to increasing your income, review your expenses so as not to fall into the trap of consumerism, and use this surplus to finance your new sources of income.
This could be summarized as follows:
Work to raise capital (salary) so that later this money leverages your new sources of income (passive income), and you build your financial freedom (time, space and movement).
You may be overwhelmed by the fact that you have to generate the equivalent of your active income from passive sources.
However, remember that this is a process: first do your research and find a passive income iniciativa that interests you, ask yourself how to create your first monthly dollars, it doesn’t matter how much it is, just that it is an plus income different from your work.
That’s how it starts.
Remember that empires are not built in a single day.
These take time. So take the first step today.
Continue reading: Spend your money on these 5 things and you will be a millionaire
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