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MAKING MONEY WORK FOR YOU
Are you financially prepared for the next 10 years?
For young professionals, this is the sign you have been asking for to start planning out your financials. Where do you want to be in the next 10 years of your life? Do you see yourself stuck in the office with piled up workloads and still not earning enough just because having one pay source couldn't give you as much as having more? Or are you somewhere doing what you love to do, relaxingly venturing on new business knowing that you are earning enough with two to four more income streams doing the work for you?
For my colleagues in their late 30’s, this is for you too. If you had your money sleeping in your bank accounts, or somewhere in your hidden piggy banks at home for years now, it's time to make use of it. Let's stop missing out on opportunities to grow our money like we did years ago by putting our money in the bank with almost nothing in terms of growth.
Whichever you are of the two above, it all boils down to the fact that you have to be ready for the future.
How do we prepare then? Make more money! How will we do it? Work 24/7? No.
You won't make more money by working a complete 24 hours in a day. Well, you might but it won't be enough to cover for your bills once you get sick by abusing your capacity. You are not preparing, you are rather killing yourself.
According to financial economist Lewis Mandell, we go out of school unprepared for making financial decisions especially for long term commitments. Our younger selves are more inclined to the traditional way of conserving our hard earned money, through savings. It is safe to say that a few years back, we had little to no access to information, such as financial information, which could have aided us for the lack of financial literacy programs configured in our schools and educational institutions.
We are also easily susceptible to the subjective norms that may highly influence the way we deal with planning ahead for the coming years. Social psychologist Icek Ajzen in his Theory of Planned Behavior, pointed out that an individual’s intention to perform an action is stronger if it's favorable to the subjective norm. Growing up in a society that does not normalize planning ahead like getting yourself or the older family members’ health insurance, or buying your own house and lot to move out the soonest, it's understandable why we struggle to do so.
Now going back, are you financially prepared for your future endeavors? How ready are you to go on with your life and face the next coming years?
This generation is technology driven. We have access to more information now more than ever, and many institutions and businesses advocate for innovation, making user-friendly platforms for easy access to investment information. The “I didn't know about that” reason is today invalid. You didn’t know because you didn’t look for it enough, or perhaps, this article hasn’t reached you yet. Lucky you now! I’m going to give you the brief WHY you should invest; not tomorrow, not in the next three years, but today. After reading through this article, we will change how you look at investment and dare you make a step closer to how you want your life in the next ten years.
Why am I discussing investment when what I want is for you to be prepared for the future? Let’s put it this way, years from now, your current salary will grow, yes? And so will your expenses. Correct? Yes. But will your earnings be enough to accommodate changes in lifestyle, unexpected deaths, unexpected hospitalization, marriage, children’s education, family vacations, etc.? If no, this is why you should invest.
Investing is effectively making your money work for you. While you work hard today, you have your money on the side working harder for you. Smart investment leverages on the power of compounding. You generate earnings from your investment, then you reinvest it and earn from it; that’s when compounding happens.
Here are the major points on why you should invest now.
1. It increases value over a period of time. The money you put aside for real estate, in particular, appreciates- increasing its face value over time.
2. It gives you a new stream of income. Investments like real estate; house and lot, and commercial spaces, can be leased out and be a second stream of income, helping you build wealth.
3. It earns higher return. In the risk-return tradeoff, the riskier your investment, the higher your potential earning is. This perfectly applies to active stock market trading investment; it’s riskier but comes with a higher potential return.
Investment is money at work. It’s an efficient and effective way to build wealth. You take a portion of your current earnings to place it in other money-making vehicles to generate more earnings for you. I don’t say investments are risk-free, but you are free to choose an investment that puts you in a better position. Your investment should reflect your goal in a certain period of time. There is a type of investment where you actively participate in its activities to earn. With this investment, you have to be actively engaged and monitor on your end, to reduce the risks and to increase the possibility to earn more. There are also other investments that are passive. Real estate, for one, is an investment that will give you a passive income and is relatively the safest to invest in with an equally higher return of investment.
It only takes a part of what you earn today to grow your tower of wealth in the next 10 years. Are you ready to take a leap and start building your wealth today?
If this article got you wondering what investment would make the safest to indulge into today, coming right up next to this article is on real estate. Learn more about it including its advantages at the time of this pandemic. Keep posted!
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