Most people don't know how much money passes through their hands/bank account on a monthly basis. I was one of them! Knowing your numbers is critical to building your wealth yet we don't dedicate time to it. Our mission today is to figure out where your money is going and the free up $$ to invest. And if you need to revisit Ronald's story to get rid of your excuses, do so. Now, let's get to work on building wealth!
MONEY x Consistency x Time x Return = WEALTH!
"You cannot manage what you do not measure" Peter Drucker
You can grow wealth on any budget (it's true, accept it), start with a $1 a day if you have to and build the discipline. On that note, let's look at ways we can free up cash to invest on our existing income. If you want to invest without increasing your income, you'll need to find ways to save or reallocate your existing resources. Here are some ideas to help you free up money to invest:
Budgeting: Create a budget to track your expenses and identify areas where you can cut back. Reduce discretionary spending - entertainment, shopping, treats - and focus on essentials. Redirect the saved money towards your investment goals.
Eliminate Debt: Pay off high-interest debts as quickly as possible. The interest on debts can eat into your potential investment returns, so eliminating debt will free up money for investing.
Sell Unused or Unwanted Items: Look around your home for items you no longer need or use. Sell them through online platforms or garage sales to generate extra cash.
Meal Planning and Cooking: Plan your meals in advance and cook at home more often. Eating out can be costly, and preparing your meals at home can save a significant amount of money.
Negotiate Bills: Contact your service providers (internet, cable, insurance, etc.) and negotiate better rates or switch to cheaper alternatives.
Automate Savings: Set up automatic transfers to a separate savings or investment account. This way, you won't be tempted to spend the money before investing it.
Cashback and Rewards Programs: Use cashback apps or rewards programs when shopping to earn money or points that can be converted into cash or gift cards for investment purposes.
Refinance Loans: If you have loans or mortgages, explore the possibility of refinancing to get better terms and lower interest rates.
Participate in Surveys: Participate in online surveys that offer rewards that can be applied to regular expenses, e.g. gas.
Rent Out Spare Space: If you have an extra room, garage, or parking space, consider renting it out to earn additional income.
If you do one or two of the above, pat yourself on the back and put that cash in a savings or better yet, an investing account. Rinse and repeat. Remember, investing is a long-term commitment, and even small amounts can grow significantly over time with the power of compounding. Start small, stay consistent, and let your investments grow steadily over the years.
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