ILLUMINATION CHALLENGE 100 — DAY 28
The 3 Basic Laws Of Money
Fundamentals For The Path To Riches…
Everybody, I know wants to earn more money, irrespective of whether they make $30,000 per annum or $300,000! On this platform alone you will find thousands of articles about money - how to earn from your articles, people making thousands via eccentric side hustles, how some teenager cracked the jackpot by gaming the algorithms that power social media platforms, blah, blah, blah…
Money cannot buy happiness, but a lack of it certainly leads to anguish and sorrow! Money is one of the most important things to live a happy life yet we are never taught this critical life skill. What we absorb from our parents and friends is unfortunately outdated, misleading, and sometimes just plain wrong!
We live in an internet age where technologies change annually and disruptors like Airbnb, Rent the Runway, and Uber have created a “renting” economy. Traditional advice to save and grown money no longer holds true for millennials and GenZ as the cost of living, college education, and household goods keep going up while wages stagnate and job security goes down the drain.
Money Growth Formula:
So we need to ditch the old money advice and go back to fundamentals — the 3 basic laws of money. The way to apply those laws will be unique to you, but the root concepts will stay the same. So what are these laws?
It starts with the simple formula for growing your money:
Riches = (Income — Expenses)*GrowthFactor
- Increase Your Income.
- Reduce Your Expenses.
- Maximize your money’s growth factor.
Most people fail to become rich because they only look at the growth part. Unfortunately, when you are starting out, you need to concentrate more on the first two laws before you can start to dream about growing your wealth. If you are living paycheck to paycheck, then there is no point in learning how to invest in real estate or start a business, or dabbling in stocks. Instead, aim to invest in your skills to land a higher-paying job, while also looking for ways to cut expenses.
In fact, rule number one is the fastest path to wealth!
Increase your hourly rate (as an employee or freelancer or entrepreneur) and you immediately increase your savings and the time available to pursue your dreams!
Then take the easiest path to passive income by putting those burgeoning savings to grow at 6% in government-backed bonds or 10%+ in safe index ETFs. No need to kill yourself working an additional 20+ hours on a side hustle that may or may not pan out in the long run!
Hunting for a new job in 2021? Take a look at my book on job search strategies (link in bio) and make sure you pick up these soft skills.
