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Ahh! Sweet money! Who can ever have enough? Money is known to show power and respect to the rich, as a low percentage of the universe could share this experience. But the rest of the people live either an average or poor life. Many wonder how the rich made the money or criticize because having the mind of an average person hasn't done them well. All the facts about making money and using it responsibly will be thought in this article.
Learn to control money.
The first lesson is "learn to control money." The one thing the rich take advantage are their many flours of income. They could sit home all day and still make more money. How? Their investments are key. An investment is when you have your money. How? Their investments are key. An investment is when you have money put into something to make more money. Either interests, dividends, rent, or high potential growth. Some kind of investments include stocks, business investments, and real estate investments. These are the most known ones, of course, there is way more to list.
As Dave Ramsey was discussing, do not spend things on stupid things. It's just not worth it. Even if a shirt looks so good, but it's $200 put it down. Don't insist on buying it's only going to make you happy for a short time, but not in the long term. But to make these investments, you need money? Money is earned not given. If you want extra money, you have to work on side hustles. A 9-5 job won't get you too far. This is where the sad part comes in. The more money the people make, the more they spend.
Average Person's Life
An average life we all know too well will be described step by step of the life of Joe. Joe makes $63,784 a year.
- Housing: $10,000
- Transportation: $9,000
- Taxes: $10,000
- Utilities and Other Household Operation Costs: $7,000
- Food: $6,600
- Social Security Contributions, Personal Insurance and Pensions: $5,500
- Debt Payments or Savings: $5,252
- Healthcare: $3,631
- Entertainment: $2,564
- Cash Contributions: $1,834
- Apparel and Services: $1,604
- Education: $1,138
- Vices: $775
- Miscellaneous: $664
- Personal Care $608
All these statistics were found in Value Penguin's Average Household Budget.
As you can see, Joe spends much of his earnings. Leaves behind about $5,000 if he doesn't have debt. You can't be free if you only make a net annual income of $5,000 a year. The only way to be free is if you have the money work for you, not work for money.
How to make extra money and learn to invest.
From Joe's life, we saw that he spent most of his money on needs and wants and a little on saving. To make extra money Joe has to work a little harder. He's working at a 9-5 job. So he still has another half of the day on him. It would be best for him to work on a part-time job. For more contribution, he could start going to garage sales and buying cheap items and start selling them online. This is easy cash in your pocket. Opportunity is everywhere you just have to go look for them.
And by the way, all the wants will be cut by at least 80 percent and needs by 50 percent. The whole purpose of this is to have you live like shit so you could manage to haul in more money. Late nights in the bed and lonely days for a goal to be rich and partying every day while everyone else is working. Another good investment might also be partnering in real estate. For example, you and your friend buy a house for 200k and you put in 20k and he puts in 20k for a down payment. Then they might contribute a little to renovation then rent the place. Half/half rent shared and mortgage paid. So, they both make passive income. Now you can relax and try to find another way to make more money until you are financially free from working and your investments provide you with enough money to support you.
Then after you reached the support level, quit your job and focus on bigger investments. Rent might not seem much in the beginning, but it adds up. For example, you know own 10, $200,000 houses. Two are partnered the rest are yours. So you have contributed $360,000 in these houses with each $40,000 down payment, other than the two $20,000. Rent each month is $2,000 and the mortgage is $1,100. So the profit each month is $8,100 a month! $97,200 a year in passive income. That is 50 percent more than the average salary of a working person.
Let's say you still work in the same job now you're making a gross income of $160,000 a year. I would either use this money to buy more houses or pay off the houses you bought so you pay less mortgage. There is of course risk involved in every aspect, but from the stats, you see it seems worth it. Even if you can't attract renters, you could decide to renovate it and put it for sale. It's not gonna stand abandoned forever, someone will buy it.
These lessons are very important for the basics you need to know about using your money. If I were you I wouldn't read more articles about how to start. The best thing is to take action and if you don't then all the knowledge you consumed would be for no cause and you would give someone else an opportunity. Anyone can get rich if they decide to hustle and take risks. You are going to make mistakes! No one is denying that, but that's how you learn. These were the lessons on how to better manage money and invest.