The wealth equation. Balancing earnings and savings
A very wealthy person once told me that it is much better to focus on making money rather than saving money. Think about it this way: when you save money, all that you can save is the money you make from your job. There’s somewhat of a limit to just how much you can save. Refer back to your answers in a previous email from the tight-arse challenge – How much will you really save if you forgo all the good things in life? Will it be enough to consider yourself financially successful?
Unless you get a job as the CEO of a Fortune 500 company and get paid millions of dollars a year, you’re not very likely to save your way to wealth and you’ll never be financially successful.
If you rather focus on how to make more money passively, you won’t fall into the trap of working hard all your life. You don’t need to go out and get a second job or start delivering pizzas – that’s not going to get you ahead. It’s just going to drive you into burnout or an early grave.
Instead, you need to focus on the easiest ways to make money. One of the easiest ways I know is to own pieces of real estate in high capital growth areas that increase in value without you needing to lift a finger. Investing in businesses is another easy way to make money, but that is perhaps a topic for a different book.
“To know and not do is to not know at all.” – Socrates
If you have all this knowledge and don’t take action on it, you might as well not have the knowledge at all. Your knowledge of making money is irrelevant if you don’t decide to act and do
something with it.
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