First of all, to make money work for you, you need to understand the most basic concept of accounting, assets and liabilities, to ensure that you will not make mistakes later. First of all, liabilities: anything that takes money out of your pocket is a liability, and assets are things that once you buy them, they will continue to generate cash flow, even when you are sleeping. All you need to do is to continue to buy assets and minimize liabilities as much as possible.
Below I will tell you how to do it
- Reduce liabilities
From now on, you should reduce liabilities as much as possible, such as paying off your credit card as soon as possible to ensure that you don’t have to pay interest every month. At the same time, reduce unnecessary expenses, such as reducing shopping in shopping malls as much as possible, and not replacing digital products before they are broken. Don’t buy too much food to avoid waste. - Savings
Strictly formulate a savings plan and transfer 50% of your monthly salary to another bank card. This bank card is guaranteed to have no other use and is only used for savings. This will lay a good foundation for your subsequent asset purchases - Purchase assets
Assets are things that can continue to appreciate after you purchase them. Suppose you can buy 10,000 bitcoins for only $25 in 2010, and 10,000 bitcoins are worth about $500 million today. It has doubled 20 million times. Isn’t it amazing? Let’s look at the example of Apple stock. In 2015, the price of Apple stock per share was between $27 and $30. Suppose you bought 10,000 shares at $28 per share at that time, which is about $280,000. If you have held it until today, then its value is about $7.2 million. - The importance of continuous learning
We talked about the importance of buying assets earlier, but the premise is that you must have enough foresight. You can accurately judge the future appreciation space of assets, and this requires you to continue to learn. Otherwise, you are very likely to buy liabilities instead of assets. For example, if you bought a house worth $40,000 in a poor area of Detroit in 2015, it might be worth $0 today.
