Building wealth

Buying Time

Start Buying Time Now

Money Maroon

Quickly calculate your net worth. After calculating your net worth, divide your net worth by your average spend per year. The resulting number of years is what you have bought back. If you decide to quit your job today, this is how long you could potentially go without working if all else stays constant. Now knowing this, how many years have you bought back? Buying time is akin to financial independence. At a certain point, you will have bought back so much time that you will no longer need to work. This is the aim.

Know Your Net Worth

On a basic level, your net worth is equal to your assets minus your liabilities. Unsurprisingly, the younger you are, the more likely that your net worth will be zero or below. But this does not mean that you should keep the full picture of your financial situation in the background. Knowledge is power! 

By knowing your net worth, you are able to gauge where you are as an individual. By knowing your net worth, you can individually gauge your progress towards your financial goals. Having a home or a specific car may be a goal, but your ultimate financial goals are inextricably link to your net worth, not a salary, home or a car. It is important to know your net worth because with this information, you can knowledgeably plot your financial path forward. If you do not know what your current financial situation is, how can you plan your financial future? How can you determine how and where to allocate funds? The fact is, you cannot plan your financial future without knowing your net worth. Know your net worth, use money as the tool it is  and buy time.

Money Is A Tool

Money is truly nothing but a tool. As such, you should aim to use your money to accomplish tasks. This should be done the same way that you use other tools. For example, if you have a hammer, it does not just sit around and do nothing. The hammer is always kept in working condition ready to bang in nails. In the same manner, money does no good just sitting around. Money should be in working condition and ready to be applied to accomplish tasks. For you who are financial minded, the game of money is about buying time. Each dollar you spending is time you are losing and each dollar you earn is time you are gaining. The time you gain is related to time that you need not work.

View Your Money As Buying Time

Each dollar you spend, consider how long you will need to work to get that money back. I guarantee that you will not buy certain items if this analysis is done before each purchase you make. If you are making $10 an hour, that $200 shoe is equal to 20 hours of your time. With taxes and other deductions from your paycheck, it is actually a bit more of your time. Now, when looked at in these terms, is that $200 shoe really worth it? Is it really worth more than 20 hours of your time? This same calculation work if you are making $50 an hour or $100 an hour. Is that item worth your time? Buy an item or buy time? The answer is simple, buy time.

Buying Time Gives You Freedom

Knowing that you have bought back 2, 3, 4 years gives you confidence. If there is a recession, you have time to do what is necessary with no need to panic. Because you have bought time, you will not lose your home or other possessions. Buying time provides a security blanket, you are able to pay your bills and if needed, you have enough for any emergency that arises. You have the money, you have the time. This is the difference between those who live pay check to pay check and those with money in the bank. One group is critically worried about keeping their jobs, while the other group have their head up and looking for better opportunities. It is much more difficult to seek opportunities and take advantage of them when they arise if you are in a place of financial survival. 

The more time you have bought back, the easier it is to pursue your dreams and take advantage of opportunities as they arise.

Conclusion

Calculate your net worth. After calculating your net worth, divide your net worth by your average spend per year. The resulting number of years is what you have bought back. If you decide to quit your job today, this is how long you could potentially go without working if all else stays constant. Now knowing this, how many years have you bought back? Buying time is akin to financial independence. At a certain point, you will have bought back so much time that you will no longer need to work. This is the aim. Journey to financial independence.

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Tithe Yourself

Tithe Yourself Now

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Let us start by saying that this posting has nothing to do with religion. This posting focuses on tithing yourself. More specifically, from every paycheck, pay yourself first. Tithe yourself. Ensure that you are taking at least 10% from your paycheck and directing that portion to a personal account. If you do not tithe yourself, someone else will have a claim to your money. You work hard for your paycheck, why have others take a share before you do?

Tithe Yourself

The word tithe in Hebrew literally means tenth. By tithing yourself, we mean automatically taking at least 10% of your paycheck off the top and directing this amount to a personal account. Some folks religiously tithe to a church but often forget about tithing to themselves. It is important for your financial future that you tithe yourself.

When beginning on a journey to save or to establish an emergency fund, you may not be able to tithe 10% to yourself. Start small and build from there. The first step is to start. Once you start and begin to build a habit of tithing yourself, move on from just tithing yourself to tithing as much as you can to yourself. Aim to increase your tithing percentage up to 10% and once you hit the 10% mark, aim for 15% and beyond.

Tithe Yourself – Pay Yourself First

Tithe yourself is to encourage you to pay yourself first. You should pay yourself first because if you do not, you run the risk of not paying yourself at all. For example, after paying your bills and spending discretionarily, how much of your paycheck do you have remaining? If you have money left over, it does not take much for all that money to disappear due to frivolous spending? 

Many times, living above your means and going into debt can result when you do not pay yourself first. If you do not pay yourself first, it is likely that you will not budget and over spend, or you will simply spend what you have because you have not assigned a task to that money.

By paying yourself first, you will force yourself to live below your means and budget accordingly. By paying yourself first, you are assigning a task to every dollar that you make. Imagine upfront knowing that 10% of your paycheck is off limits. By reframing your paycheck this way, you know that you are limited to 90% of your paycheck. This means that all of your bills must be paid by this amount. Can you pay rent/mortgage, phone, cable, internet, subscriptions, power, and whatever other bills you may have from this amount? If the answer is yes, increase the amount of your paycheck that you are paying yourself. If the answer is no, you will be forced to cut back. You will be forced to make hard decisions. But trust me, it is worth it. Saving for your financial future is worth it. Tithing yourself is worth it.

Money in hand. Tithe yourself. Pay yourself first

You Are Not Being Selfish

It may sound selfish when it is said to pay yourself first or to tithe yourself. However, if you do not pay yourself first, you are always putting yourself behind someone else. You are putting your bills ahead of your financial future. You are also putting the temptation of instant gratification ahead of the delay gratification that will benefit your future. Instead of having others having a claim to your money, claim it as your own. You worked hard for it, so keep it and grow it to the betterment of you and your family.

If you still think that tithing yourself is selfish, then sometimes in life, you need to look out for yourself and your financial future. Because the simple fact is, if you fall on hard times, it is unlikely that there will be many people lining up to pay your bills or to house your family.

Conclusion

This posting focuses on tithing yourself. More specifically, from every paycheck, pay yourself first. Tithe yourself. Ensure that you are taking at least 10% from your paycheck and directing that portion to a personal account. For example, a personal investment account or a personal savings account. If you do not tithe yourself, someone else will have a claim to your money. You work hard for your paycheck, why have others take a share before you do? Reward yourself for your hard work by saving for your financial future.

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Top Secret

Secret To Building Wealth

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Every one wants the secret to building wealth. Many pay for courses or are drawn into get rich quick schemes. But the secret to building wealth is simple. It is the same it has been from the beginning of time. The secret to building wealth is money (assets) and time. That is it. If you do not believe me, continue reading the below.

Building Wealth – Money

Money and as a broader concept, having assets or things of value is the basis of wealth generation. This is no surprise. The old adage of you need money to make money is true. It comes down to simple math. If you begin with a basis of $100 and gain a return of 10%, your return plus your basis is $110. On the other hand, if you have a basis of $1,000,000 and gain a return of 10%, your return plus your basis is $1,100,000. Money matters. Having assets to trade matters.

If you were born wealthy, you have obtained a head start. If you were born poor, you will need to obtain money or valuable assets that are tradable. In some cases, this means having or developing valuable skills that one may trade to obtain money. In other words, employment. 

The above does not mean that those born wealthy will remain wealthy. Having money simply gives you a head start, but what you do with the money you have is important. If you place your money under a bed or receive a low return on your money, inflation will erode the value of your money. On the other hand, if you make smart moves with your money, its value will increase. Rich or poor, if you do not know how to grow and build wealth, you will lose what you have. The more money/assets you have, the faster it could grow over time.

Building Wealth – Time

The secret to building wealth not only includes a need for money, you also need time. Simply put, to build any thing takes time. Wherever you begin on the scale between poverty and wealthy, to build wealth or more wealth will take time. To build wealth, you must invest, you must put your money to work over time. As noted above, if you park your money into a savings account or under your bed, the value of your money is likely to be eroded by inflation.

Once you put your money to work, there will be a time period before you are able to obtain a return on your investment. This time period could range from as little as a few seconds to multiple decades. Whether you put your money to work by investing in yourself in a specific field for example obtaining an education or learning new skills to obtain gainful employment, investing in the stock market, investing in a startup business or investing in real estate, the payout or return on investment takes time. The more time you have, the more your investments may potentially pay off. Consider over the life of your career, the more time you have the more money you will earn, the more you can invest to grow wealth. The more time you have, the more homes you can flip if you are in real estate investing, the more return  you can gain from the stock market, the more startups you can invest in. As such, the earlier you are able to obtain money or tradable assets and begin putting your money to work, the more wealth you can generate.

Examples

As an example of the above, take a look at your favorite wealthy person. Is it a doctor, lawyer, investor or entrepreneur. What do they all have in common? They had money or tradable assets that they  exchanged for things of value that grew over time. In some instances, skills are being traded for a high salary. From the salary, money is saved and invested over time to generate wealth. For others, they had innovative ideas that they initially funded and overtime those ideas grew into ultra profitable companies.

Caution 

As noted before, having money does not mean wealth. Because you now know the secret to building wealth, this does not mean that you will automatically become wealthy. Once you obtain money, how you use this money over time is very important. You may invest in your education in a field that does not pay well or that is no longer needed, which would leave you in debt and struggling. It is possible that you may invest in companies that are not innovative and may later go bankrupt. You may also invest in the wrong stocks or industries. Building wealth takes time and money, but building wealth is not automatic. You must do your due diligence and in some cases be lucky.

Conclusion

Every one wants the secret to building wealth. Many pay for courses or are drawn into get rich quick schemes. But the secret to building wealth is simple. It is the same it has been from the begining of time. The secret to building wealth is money (assets) and time. That is it. Now that you know the secret to building wealth, take steps today to journey to financial independence.

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Video Summary

Chasing

Chase Solutions Not Money

Money Maroon

Who wants to be poor? I have never heard a single person seriously state that they want to be poor. At some level, we all want to achieve a standard of living where we and our families have our needs covered without financial stress. Another portion of us wants more. Achieving financial stability such that wants and needs are easily achieved is a dream most of us  have. To achieve financial dreams, especially if you are entrepreneurial, chase solutions not money.

Chasing Money

With regard to your current profession, is your work your passion? Does your job make you happy? Do you continue to work at your current job for financial reasons only? If money was not a concern, would you continue on your current professional path?

Many of us choose careers not because of the difference that we will make, but for the traditional high standard of living and potential wealth associated. Many of us stay in positions for this same reason, even when we hate our jobs. We are not here to judge why anyone is on the professional path that they are on, but if wealth is your objective, it is best to stop chasing money. 

Chasing money will keep you in a 9-5, salaried position. Chasing money will keep you working until your late 60s or longer. In some instances, chasing money will generate wealth, but you will be miserable. Think of the lawyers and doctors who are wealthy but absolutely hate their jobs, are alienated from their families and are struggling to cope. Chasing money will keep you from your potential of being both happy and wealthy.

Chasing Solutions Not Money – Profession

By chasing solutions, we mean finding a problem and driving towards a solution. In a professional scope, the underlying purpose of solving a problem is the fire that will burn to get you through the difficult times. The difficult times may be years of schooling, personal issues or unexpected disasters that occur in life. With a purpose, your drive will be maintained irrespective of the financial reward. Whether your drive is servicing a specific community or a specific cause, finding a problem and presenting a solution will greatly increase your rewards, financial and otherwise.

Chasing Solutions Not Money – Entrepreneurial

If you are an entrepreneur and you are aiming to build wealth, it will all fall into place once you identify a problem that is worth solving. There are many issues that we all collectively encounter on a daily basis. Identify these problems and present your solution. Once you identify the problem and a possible solution, ask yourself if the identified problem is worth solving. If it is worth solving, this is a business idea.

Is The problem Worth solving

In determining if a problem is worth solving, from a business standpoint, you need to determine if you can earn from solving the problem. Does the problem rise to such a level of needing to be solved? Will someone pay you to solve this problem? If someone will pay you to solve the problem, how much and is it worth your time? If you have identified a solution to a problem, but someone will only pay you a dollar to solve the problem, this venture may not be worth it. Whether or not the venture is worth your time will depend on scalability.

Is Your Solution Scalable

Is the venture of solving the identified problem scalable? Let’s face it, if I solve a problem that is of low value to others and non-scalable, then I will either loose money or get stuck in a job that will not grow over time.  None of these options are good.

Now, if the venture is scalable, you have a business. For example, our example above where we are paid a dollar by each customer to solve a problem. If this business is scalable, if you are able to build your business to reach one million customers, that is one million dollars. If the problem being solved is one that is reoccurring, you have the potential for a million repeat customers. When you chase solutions, not money, your wealth will seamlessly grow.

Conclusion

No one wants to be poor. At some level, we all want to achieve a standard of living where we and our families have our needs covered without financial stress. To achieve financial dreams, chase solutions not money. On the journey to financial independence, stop chasing money, chase solutions to problems and watch your wealth grow.

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Video Summary

Build wealth by chasing solutions