3 Dumb Things People Do With Their Money. Part II – Buying Liabilities Before Assets

Buying Liabilities Before Assets

There are many ways to look at this point – buying liabilities before assets. For argument’s sake, I’ll take the stand that contributing to your asset sheet before you engage in other consumer spending/debt is the better choice.

Learning to buy assets that pay dividends can be a bit daunting to the novice. I vividly remember when I heard Jim Rohn say, “Profits are better than wages.” As a novice, I could barely understand what that meant. “Yea, but how do you do that when you have no money?” I asked myself over and over again.

After accepting my financial ignorance, I determined to do something about my “0” financial IQ, I picked and began reading financial books, many of them. After a lot of reading, I realize that there are several ways to create multiple income streams, even when your paycheck is your only income source.

To begin with, you must  “pay yourself first.” That means, put 10% – 15% of your income into your Roth IRA. If you don’t know how to do this, you’ve got some homework to do. It’s not that difficult, but the most important thing is that you must understand it before you begin. So start reading and learning how to save money.

After you’ve set aside 10% – 15% of your income in your Roth IRA get a side hustle, a second job. Use the bulk of that to make other investments that pay dividends. Read, 5 Lessons a Millionaire Taught Me (outline here) by Richard Paul Evans. It will give you a clear picture of how to set priorities with your money.

Look for opportunities that pay profits and then save those profits. It could be starting a side business selling a product or a service online. Investing in real estate or opening a traditional mutual fund with someone like Schwab.com (this link will give you $100 to start) is a good way to begin. $100 will get you started. Ask around. There are always opportunities for those who are looking for them. And most people are willing to help when asked.

One of my brothers runs a real estate fund that only accepts $100,000+ investors. But for friends and family, he allows them in for as little as $5,000, and so far, these funds have paid 12% annually. I didn’t find out about this fund until his 4th fund and only when I asked if he knew of any other ways I could be investing. I’ve found that there are opportunities all around us, we just need to ask and be ready with saving, when they come about.

Continue reading 3 Dumb Things People Do With Their Money. Part III – Having No Financial Plan or Goals >>

Read part I here >>

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