From Rags To Riches: The 3 Investing Principles That Will Change Your Life
Investing in today’s economy feels challenging. There are many competing theories, and it’s not always clear which investment vehicle you should choose.
That’s where this post can help. We look at some fundamental principles that could change your investing life. With these, you could make far more money than expected and create the lifestyle you’ve always wanted.
But what does that mean in practice? Let’s take a look.
Invest In Your Mind And Body
The first principle is to invest in yourself. While it might not be as sexy as watching the ticker go up on the stock exchange, it will help you secure your long-term financial health.
As a millennial, you’re still in the prime of your life. Now is the time to build the skills you need to thrive in the second half of your career and move forward powerfully in unexpected ways.
Investing in yourself can often take unexpected turns. For instance, you may find that dedicating yourself to personal passion is more economically beneficial than learning a new complex skill.
Similarly, you might find that doing something new (that other people have done before) is more lucrative than following the crowd. Exploring something different and taking it to the next level is a great way to differentiate yourself and add value in a saturated economy.
Other ways you can invest in yourself include:
- Taking courses
- Reading books
- Attending seminars
- Networking with people in your target niche or area
- Pursuing your interests and getting good at them
Once you start on the path to learning and knowledge, you will grow more. People will be naturally attracted to you, and you’re much more likely to start selling.
Invest According To The Value Principle
The next step is to invest in value. You want to put your money into relatively inexpensive things now but have the potential to grow significantly over the coming years.
Whether it’s crypto mining pools, stocks, NFTs, bonds, or real estate, value always wins. If something is inexpensive today, it is much more likely to increase in value.
This principle can apply to anything you buy, not just assets. Cheap classic cars often double or triple in value in a short time, particularly if they become fashionable. The same is true of art or fine wine. These luxury goods often grow in their economic significance considerably, especially if you buy them cheaply.
Value is something many of the world’s most successful investors believe in. Charlie Munger and Warren Buffett of Berkshire Hathaway use value-based principles to decide which companies to buy and which to leave alone. You should do the same with any investments you make during your career.
Take The Profits And Reinvest Back Into Yourself
The final (and somewhat strange) principle is to take the profits you earn and reinvest them into yourself again. When you make money, use it to help yourself become more of the person you want to be and less of the person you don’t.
Many of the most successful people in the world create a positive feedback loop of wealth generation. The more money they have, the more resources they acquire to help them achieve incredible wealth, so it continues. This phenomenon might partially explain why many wealthiest people keep adding to their fortunes. They understand this cycle and exploit it as much as possible.
Whatever you do, don’t let your money sit idly by in a bank account or under a mattress. Inflation and taxes will erode it, putting you at a disadvantage against others in the economy. When you invest in yourself, you increase your capacity to go further and do more. People start to recognize who you are and where you’re going. They also see your potential and what might happen if that investment continues, making it more likely you’ll find lucrative income opportunities.
Conclusion
Ultimately, these investment principles could save your life. People with more money have more fun but also live longer because they can access information and healthcare that regular earners can’t.
Going from rags to riches takes time – about three decades on average. But once you get there, you’re set for life. Money continues to compound in your bank account, letting you spend it how you want later on. It’s just a question of investing in yourself, using those gains to make money, and then using profits to invest in yourself again.
