Let your money work for you
If you would prefer to read this article in Romanian, you can do so here.
Yes, it can.
Hello, my name is Aurel Rusu and I wrote this mini-series in order to share with you the key points that I have learned regarding money and especially money that works for me, since I started to study this 'discipline', back in 2014 (almost 7 years ago).
If you don’t know how it does this, don’t worry: the skill of ‘letting your money work for you’ can be learned just like any other skill. All you have to do is read this mini-series until the end; it has only 3 episodes:
Episode 1 - can money work for you?
Episode 2 - why should money work for you?
Episode 3 - how should money work for you?
There are many things that your money can do, some of you could say.
Actually, there are only two big possibilities: it can increase in number or it can decrease in number. We are not here to talk about how your money can decrease, because that has an easy explanation: it's called 'shopping'! 😊
On the other hand, increasing their number is also more interesting; it can be done in two separate ways:
The first method is the old fashioned way: you get a job and work, then once a month or once a week (depending on where you live on the globe) you get paid for that work. In this way, you can obtain money by trading in your time and the skills you possess.
The second method is also old, but not everybody uses it: you put your money to work for you and it grows by itself. This is the magic shortcut to financial freedom.
Money can and will work for you, there is no question about that. In order to get the most out of it, here are some best practices:
— Let your money work for you sooner rather than later;
— Do this long-term - that is, let your money work for you, preferably forever;
— Learn, understand, and master the law of compound interest.
You have to make a conscious decision to put your money to work for you. It’s not going to happen by chance or by itself — you have to make it happen!
If you just sit around and do nothing, most likely your money will leave your hands. This happens because you gave it no reason to stay. A good reason to stay is to put it to work.
In the next part of this episode, I have synthesized some key takeaways on the subject of letting money work for you, or for me:
- 'You can only get rich when you find a method to make money while you sleep.' This is an old saying, but still true today and most probably will forever be true.
- Money has been doing this (working for people) since forever, especially for those who knew that it was possible. I would say that this situation has existed since the early days of banking - and it is easier than you might think.
- You can also find proof of money working for people in the famous Cashflow Quadrant developed by Robert Kiyosaki, which I will describe below:
Quadrant 1 — you are an employee — you work for money in somebody else's business;
Quadrant 2 — you are self-employed — you work for money in your own business;
Quadrant 3 — you are a business owner — other people work for you;
Quadrant 4 — you are an investor — your money works for you.
- It is possible to let your money work for you. This is how most of the great fortunes of the world have been created.
- You need to be disciplined and make sure that money observes the discipline dwelling inside you as well, because money loves disciplined people. Keep in mind that this is possible, however not always easy.
- Money loves to work, money loves to build. And it loves to do this together with itself - that’s why it grows. And that is why money sticks together (and grows into fortunes) when it has a good leader to follow. Alexandre Dumas once said that money is a good servant but a bad master. Keep this in mind.
- When you let your money work for you, please get out of its path. Don't stand in its way. Let it do what it knows how to do best: WORK & GROW! A good example here is a situation where you want to earn money from interest, but you keep all your money in deposits and savings accounts that only pay 0.5% interest per year. Even if your money wants to grow, it can't do that because you're using the wrong instrument. Move it to places where the sky's the limit: the stock market, bonds, crypto etc.
All things here, in this world, have a beginning and an end, so please keep this in mind: even if it was always possible to let your money work for you, the specific methods used to accomplish this have changed over time.
The lesson here is to pay attention to what happens around you and be ready to make a change if the method used does not provide sufficient output, as expected.
The activity of letting money work for us has some levels of risk, depending on the specific method used for growing said money. In my perspective, the most important thing is that it is possible, not that it is risky. And this is what we should focus on.
We need to remember that there are methods which have smaller risks and there are methods which have larger risks. However, there are people who are familiar with small risks and then there are also people who are familiar with bigger risks.
The key point here is to know what your level of risk familiarity is and also know where that stands between low risk and high risk.
When you let your money work for you, make sure it only does so by legal means.
Make sure you declare your earnings according to your local fiscal laws and make sure that you pay your taxes! This is mandatory and this is how it should be done; it's not negotiable! It is your responsibility to pay your taxes, not the government's responsibility to get them from you!
In conclusion, it is safe to say that your money can work for you and the result of this work is called PASSIVE INCOME, because you stay passive and the money keeps coming! 😊
In the next episode of this mini-series we will see 'why should money work for you?'.
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