There are two types of money: money for basic living; and all the extra money in addition to what is needed for basic living. The second type of money gives you power. It also makes the rich becomes richer
Last Updated: Monday, May 20, 2019
First published: Thursday, October 18, 2018
Money for basic living is the expenses you need to pay. This typically covers your rent/mortgage, utilities and phone bills, food, dining and entertainment, clothings, travel expenses, insurance, etc., plus some minimal savings.
If you live in an expensive city in a developed country, this amount is usually around $2,000 to $3,000 a month for most average folks. If you live a cheaper city or in a developing country, your money for basic living will be significantly lesser.
For the sake of this article, I’m using the figure $2,500 per month as the money required for basic living expenses.
This is the money that remains after you pay your bills and all your living expenses. It is sometimes called disposable income. It is this money that gives you power and a resource to reach your goals and become richer.
Sure, you can increase your living expenses as you make more money, but your spending increase (for living) will usually only be fractional instead of proportional.
That is, if you make $2,500 a month, you are left with only $500 as savings or extra money.
However, if you make $10,000 a month, but keep your living expenses the same, you will have $8,000 available as extra money. Even if you increase your living expenses (ie. move into a better house, enjoy better food and dining, etc.), your extra money will still be proportionally more because you will be smart enough to increase your living expenses only fractionally but make use of the remaining money to make even more money.
This is how the rich becomes richer!
The problem with employment is that it is a system to deter you from making more of the extra money. Employment deprives you the most resource: time, and this also means you can’t execute your plans during Golden Hours. If you don’t have time, you can’t make more money.
Employment is defined as any work agreement where you are contractually required to go to work at a fixed time, fixed place for a fixed pay. It is worst type of income because it not only prevents you from additional business opportunities, but it is a single source of non-residual income. This means if you quit your job and stop working for the company, your income stops completely.
There are long-term freelance assignments which are paid on a monthly basis. There are also one-time freelance projects. The pros of freelance work is that it is not a fixed time and fixed place agreement. And since you manage your own time, you can use this important resource to make more money.
Freelance work is essentially a service-based business, which means it is non-residual. Once the contract ends, your income stops.
A product-based business means you do a lot of work to design, author, create, prepare, and manufacture the product. Once the product is launched in the market place, income is residual (however, marketing efforts needs to be continuous).
Investing or short-term speculation of the financial markets, including foreign exchange (forex; FX), cryptocurrencies, stock and their derivatives are good but carries a lot of risk. If you are an active trader, you’ll need to be monitoring the market during the Golden Hours.
Any form of residual income is best. Residual income means you work once, and keep earning for a long time.
Entrepreneurship means founding a startup company, build it to high value and either earn from the dividends or sell the firm for capital gains. If you have the passion, just do it!
Make more money means you earn as much money as possible beyond what’s needed for living expenses. This is what gives you power and enables you to do more great things.