In my previous posts, I have given some tips on how someone can build wealth through his or her income. These tips are necessary because money is something that everybody wants to have, but few people really understand the principles behind having it. Almost everybody skips these principles. As I am writing this blog, I have made a lot of mistakes regarding money. Some of the mistakes we generally make are:
- that only people from rich family can be rich
This idea is completely wrong. A recent research carried out in the USA in 2015 showed that 80% of the millionaires are self-made ones. In other words, they did not inherit anything from their parents. Some people use this as a reason to make themselves comfortable instead of struggling to break the barrier of poverty.
- that one cannot be rich by doing a 9 to 5 job
If a street vendor can be a millionaire, why shouldn't someone with a well-paying job be one? If one understands the power of his income (wage), he or she can be rich faster than someone without a college degree. The reason is that the source of wealth creation is right with the individual. Some well-paid executives or workers play lottery, hoping to become millionaires through this process. Think about an executive who makes $15,000 to $20,000 monthly. Investing in mutual funds, the executive will be a multi-millionaire in less than 5 years if he or she can be investing $5,000 monthly. That does not require a lot of sacrifice. If one can have $1 m after 30 years by investing only $100 monthly, $6 m by investing $500, imagine what happens by investing $5,000 monthly. If one can make this sacrifice, he or she can even stop working after 5 years. This way is more effective than waiting to reach retirement age in order to be receiving pension.
In the next posts, I will write more mistakes we make.
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