Not everyone knows how to make more money through investment. If there’s something a majority of us have in common, it’ll be our need for more money. We all want to make more money, improve our streams of income and become wealthy so that we can secure our financial freedom.
Financial freedom does sound like a difficult thing to do, otherwise, nearly everyone would have been rich by now. The thing is: the secret to earning more money and accumulating wealth is to learn how to multiply your money, and how to also manage it.
Think of it this way: the more money you make, the more you save and invest, the more you accumulate wealth and become financially free. But, first things first: we need to learn how to make more money. It is when we have more money that we can save and invest more money.
For instance, consider one person who earns $200 monthly and saves and invest 50% of that, and someone else who earns $500 monthly, but saves 30% of that. Which of these 2 parties is likely to generate more money by the end of the year? Of course, the man who earns more, even though he saves less.
Now, the point isn’t to save less but o increase your earning potential and your streams of income. So, let’s discover how to do this.
To make more money than your regular income, you need to invest
Everyone’s income statement includes an income funnel and outflow funnel.
Rich guys: income > outflow
Middle class: income = outflow
Poor people: Outflow > income
So, to generate wealth, you have to ensure that your income is always more than your expenses, and that’s where investment comes in.
Let’s talk a little about what both poor and rich people save money for.
Everyone knows it’s good to save money, but not everyone knows what to do with the money when they save it. While poor people save money only for the sake of the rainy days, rich people save money both for the rainy days and also to invest it, and that differentiates these two classes of people.
Investment is an act of multiplying your money with your money. When you invest, the return you get on your money allows it to build and create wealth over time. That’s the power of compound interest.
The good news is that there are different ways to invest your money, but be sure to choose an investment type that you fully understand.
Here are a few tips to help you start investing
1. Educate yourself about investment
You know, gambling can sometimes be misunderstood to be investment, which is one of the reasons you have to educate and know more about investments, your risk factor, etc.
A good idea might be to get a financial advisor that you can trust to lead you in your investment journey.
2. Set an investment goal
Like everything else in life, if you want to succeed at investing, you need to learn to set goals.
There are different reasons to invest your money. You could invest for retirement, to buy a home, pay your kids college fee, etc. An investment could either be long or short-term. So, before you begin any investment, ask yourself, what the purpose of that investment is.
3. Choose an investment type
One of the advantages of educating yourself is that you can make some of the best decisions when it comes to the investment type you want.
For instance, there are different types of investment types ranging from stocks, bonds, fixed deposit, forex, cryptocurrency, etc. You can also consider investing in a business as long as at least 80% certain of the chances of success for that business.
4. Diversify your investment
You know, as an investor, it’s advisable to diversify your investment portfolio. The same way you wouldn’t want to bet your future on a single 9-5 job, you shouldn’t do so with your investment as well.
Now that you know how to make more money through investment, start creating wealth for yourself by becoming a smart investor.
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