Money: Everyone wants it, few know how it works and it’s mostly taboo to talk about..

Rights Reserved. Al Pickett

Can we talk about money? Can we talk about how it permeates through every aspect of our lives? For those who’ll read this and say money isn’t everything, I agree but it matters. A lot! At 36 I’ve learned a great deal about it and I’m still learning. It’s been a hot topic recently with mainstream artist like Jay-Z using his platform to encourage financial responsibility. Say what you want but when entertainers talk, people listen.

For all the discussions about wealth, what wealthy people do and how they live there is usually a missing chapter. That missing chapter is the difference between accumulation and preservation. You become wealthy by accumulating assets and you stay that way by preserving what you’ve accumulated typically through diversification. There’s a focus connected to accumulation. Look no further than a Forbe’s list to see what industry someone made their fortune in over a number of years or decades. That really debunks the whole “every millionaire has 7 sources of income” meme you see floating around.

I’m not going to use my platform to entirely talk about people who already have theirs but instead share my thoughts on what others can do to put themselves and their families in a better financial position. Let’s get started shall we:

Education

People go to school and end up working in fields that don’t pertain to their education all the time. It’s prudent to pursue a professional degree that will pay you an income at least 2 or 3 times the median income. Even then, you still want to consider the cost of the education. Think like an investor. If I invest in said education whether cash or loan, how long will it take me to make my money back? Beyond professional degrees, I believe certifications and trade schools are far superior in earning power than most B.S. degrees.

Home Ownership

If you’re going to purchase a home, make sure you’re not paying retail. You make your money on the purchase of the home and not when you sell. Look no further than the most recent housing crisis for proof that real estate doesn’t always appreciate. Don’t get stuck thinking it’s an investment that will always go up in value. Buying at a deep discount will increase the odds that you’ll profit when you decide to sell & that you could find a new buyer to purchase quickly in the event that you have a life event and need to leave in a hurry.

Rent

Renting gives you 3 advantages: Liquidity, agility and fixes expenses.

Having access to cash when the right opportunity came along is common in the majority of wowing wealth articles you see online. Whether that opportunity is the chance to start a business, invest in the financial markets, buy a discounted home or investment property, having access to cash matters. Secondly, things are changing fast around the world and ability to move at moments notice is to take advantage of an opportunity is an advantage onto itself. Lastly, besides a potential annual rent increase, the cost of renting are fixed which could allow you save or invests more in other places.

Investing (Real Estate & Financial Markets)

The same principle of buying real estate at a discount applies here with ultimate purpose of having cash flow to you from the property as income. In this scenario you’re not hoping for appreciation, you have income coming from the property and additional tax benefits from owning the property.

Investing/trading financial markets is not as risky as some people think they are. The majority of the corporate workforce has their retirements staked on the stock market via 401k’s. What’s risky is not being educated on how things actually work and how you can use it grow your net worth intentionally.

Where real estate investments may be a less liquid, the financial markets offer a place to grow, yet access cash when needed. Of course they can be worked in tandem with the proper education, diligence and patience.

Business

Although it may be the more difficult journey, running a successful company has the potential to build a fortune greater and faster than any other route. In contrast, you don’t have to build a mega size company to accumulate enough money to change the course of generations. All great businesses solve a problem for people, governments, corporations etc. Take a great look at your skill set and how you may help other people with the problems coupled with what they are willing to pay you for. It’s a hell of a journey but start there and you’ll increase the odds of starting something that works.

Credit

It’s one thing to use it to consume and another to use it to build and acquire assets. The concept here is simple: OPM (Other People’s Money) You may not have that one hundred thousand to buy a business or property but banks and private investors do, and with credit and character they’d lend you a portion in promise of payment.

Life Insurance

Intense reality is being aware of your own mortality. Life insurance is an inexpensive way to insure that those you leave behind are better off financially. A healthy adult under 30 can typically get a $1 million dollar policy for less than the cost of Taco Tuesday per month. It’s always unfortunate to see someone pass that leaves behind a spouse and or kids and a gofundme to help with cost associated with burial. While a lack of insurance may be for economic reasons, there’s a matter of exposure and education to let people know these options exist.

I’d like to cover wages, inflation, taxes and so much more but I hope this is enough to think about and maybe start a conversation as well as possibly impact those who desire to make changes. Money, how we view it, spend it, save it & invest it has an impact on everyone. Neglecting to have open discourse with our friends and those we love only pushes the can down the road until one or a few people in your family are forced to deal with it all.