CONTENTS
FROM THE AUTHOR
1. PAY YOURSELF FIRST
2. INCREASE YOUR INCOME
3. MANANGE YOUR MONEY
4. INVESTING YOUR MONEY
6-FIGURES, WHAT’S NEXT
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He who works all day,
has no time to make money.
FROM THE AUTHOR
In essence building your net worth is just about following a few simple steps. There is nothing secret about it. All you need to know is right here in this cheat sheet. If you do what you have to do, and you keep at it, becoming a wealthy person is inevitable.
But what is the catch, right?
The hard part about building your net worth is NOT doing the things you’re not supposed to do. That’s the real challenge. You have to navigate through a society that is structured in a way for you to consume. It’s this constant attack on your time, your attention AND your money.
Stick to the steps in this cheat sheet and you are guaranteed to a 6-figures bank account, at the minimum.
1. PAY YOURSELF FIRST
Let’s not stand on ceremony here, but I want to welcome you as an initiated wealth builder.
The very first step to building your net worth is by paying yourself first. This means of every dollar, every euro, pound or rupee, that touches your hand or bank account you pay yourself 20% before anything else. This single act, if you do this consistently whenever you receive money, gets you over the fence from being poor to being rich.
After you paid yourself first, then you pay for your expenses and spend the rest on leisure and luxury. Most people save what’s left after spending. The initiated pay themselves first and spend what is left. This is the first principle that makes the difference.
2. INCREASE YOUR INCOME
If working hard was the key to building your net worth, every single mother would be rich.
Your work ethic, however, must be on fleek. Make sure to reap the benefits of your own labor. Don’t fall into the job trap and get stuck in the rat race that makes your boss rich, while you are left with the leftovers.
Find a revenue model that works for you and stay clear from the shiny object syndrome, i.e. the next big thing that promises heaps of cash.
In order to build your net worth, structure a way so people can hand over their money to you and are happy to do so. Of course you give them something in return that is valuable to them. Deliver a product or service that takes away pain or provides pleasure.
3. MANAGE YOUR MONEY
Managing your money well, is where the money’s at. 😎
Sticking to the first principle will get you a long way. But this is the part where you show your true colors. For some reason we have trouble dealing with money and freak out when we have it. Having sound financial habits make sure you stay comfortable with money when your net worth starts to grow.
Money wants to move, make sure it’s in your direction. Keep a hold on how you spend and don’t immediately increase your standard of living when your income increases. Stay frugal. Don’t waste money on fines or unnecessary interest payments.
If you have an excess, pay yourself extra!
4. INVESTING YOUR MONEY
This is the part where you put your money to work and let time do the heavy lifting.
By now you’ve been paying yourself first for quite some time. This means you have a bag of capital to invest in appreciating assets. Hoarding your hard-earned money at the bank (saving) is a sure way to stay poor due to inflation. Over time it meticulously eats away at the spending power of your money. You don’t want that.
Invest your money in stocks and take into account the costs of your broker/banker. The most common way is by investing in the S&P 500, which makes you an owner of the 500 biggest companies listed on the stock exchange. You’ll receive dividends, which compound over time when re-invested. Now your money makes more money!
6-FIGURES, WHAT’S NEXT?
I know it’s a bit early, but it is important nonetheless. I thought that by having all the money I needed would be something epic. I was wrong…
While hitting the 6-figure mark offered quite a relief, it quickly dawned on me that my life didn’t really change and that my problems didn’t magically disappear. I am still the same person, with the same flaws and insecurities.
Having money will solve your money problems, but it’s just a small component of life and won’t automatically make you happy. You will come to that conclusion by yourself.
Ask yourself what it is you truly want out of life. In the meantime stick to these principles and you’ll build your net worth passed 6-figures!