The Simple Rules To Get Rich

Here are the simple rules to get rich, which are only initial guidelines and cannot be infinitely comprehensive

It turns out that the paths to wealth – so desired by many, are quite unclear.

Steps To Build An Emergency Fund — The Simple Rules To Get Rich

Investing it in the long run

We need to make the money to work for us, and how to do that – by investing it in the long run. The power of long-term investment is the eighth wonder of the world, according to Einstein. At the same time, long-term investments often meet the requirement to “make money work for us”.

Our parents, who have invested in real estate on installment, have fulfilled these first conditions and it is no wonder that often their main asset is housing. The investment was long-term and the savings in rental costs, as well as the increase in the cost of housing itself, have accumulated significant value over several decades. This investment is also strong because it is difficult to change the original strategy, because one is emotionally connected to the property, and the mess around the apartment prevents the destruction of the investment and the scattering of capital for consumption.

It is important to make money work for you, because an investment of 100,000 USD, which brings in 12,000 USD per year, makes 1,000 USD per month, for which you do not work or make an effort. The long-term strategy is a passive strategy, ie without management costs.

Real Estate

When investing in real estate, the return can be used in several ways – free rent when using the property, renting to others, taking a mortgage loan for another business at interest rates much lower than interest rates on consumer unsecured loans, as in consumer loans and the amount that the bank would grant is quite limited. You can take out a mortgage loan and lend it to another person by negotiating a higher interest rate with him, guaranteeing, for example, a repurchase agreement. When investing in real estate, the return on the increase in the price of the property is actually “reinvested” automatically.

Stock Market

Another investment that meets the condition of long-term accumulation (that is, prices go up in the long run) and the condition of “make money work for you” is investing in stocks or mutual funds. The main risks here are to have an undifferentiated portfolio or to close the investment and scatter the capital in a few years because this investment is closed quite easily. Prices change every day and tempt you to take one action or another.

The lack of a differentiated wallet can also be an advantage if you are lucky and insightful to hit a stock that will increase tens or hundreds of times and make you rich. But keep in mind that people find it difficult to “tolerate” uncollected profits and so often sell after 100% profit, instead of waiting for 1,000% or more, so investing in stocks is not easy from this point of view. Unfortunately, people tolerate positions that are at a loss because they simply hate to admit that they have made a mistake, and this is often the reason for long-term poor success.

Develop Your Business

Another option for long-term investments is to develop your own business – however, there will be many difficult moments here, and if you have partners, you can be expelled from the company or go bankrupt due to a mistake or theft of the partner. Unfortunately, this is a common practice, so you should be very careful and in any case not use the practice of heroic trust, and it is best if the company is entirely yours, even if it is difficult at first. It is better not to become a partner with a friend or a person below your level. If the partner is sluggish or incompetent, you will turn against him and this will hinder the company.

Strategy

You need a strategy for borrowing long-term investments that will make you rich. The strategy should be adopted as soon as you decide to invest. To do this, you can start researching the Internet or visiting friends who have already started one of the three long-term investments. You can also turn to professional consultants, which is free when investing in real estate, stocks, and mutual funds.

The strategy will help you react correctly at the important moment, which is crucial because this moment is one every few years. This is a time when you earn money from somewhere, which is enough for the first installment of the investment or starting a business, but you often spent the capital because you had to have a new car, bathroom, and furniture. This quest to own good things will leave you below the middle-class level in the long run, because the middle class invests and the rich invest a lot and have invested a lot.

Set Aside

Even long-term investment strategies need to be invested in regularly, especially in the early years. You just have to set aside whatever it costs you – the lack of new clothes, a better car than your neighbor’s, new furniture, or a bathroom that your wife has been grumbling about for years. You need to set aside. So that one day you can live better. There is a poverty trap where people say to themselves, “I don’t have the money anyway, at least to spend it a little fun” – and the little money disappears.

You will probably have to work to raise capital. You will hardly get an inheritance before your 50th birthday and you will hardly be lucky enough to strike and get money from somewhere, even more so to remember to invest it.

At work, you need to follow a few rules to earn more than you spend and to have to invest

You have to be loyal, work overtime, not quarrel with colleagues on a personal basis, and choose only companies in which you are directly subordinate to a great boss.
Avoid companies where your boss is selfish and does not give you the knowledge and a chance to grow. Avoid big companies where there is usually no one to notice you. Much easier with loyalty, overtime, and light but constant pressure to develop you will gain trust, more responsible tasks, and more money.
Avoid putting yourself in a hopeless situation and knocking on a door that will obviously never open, for example, because there are 10 other people in front of you who are courting the boss and doing PR better than you.

This article is a personal opinion and it’s not intended to provide investment advice.