6 Things You Need To Know About Money

Money LOVES to work. It never tires. It works for you whether you’re awake or asleep. Make sure it’s always working for you, not against you, and start NOW. Here are 6 things you need to know about making money.

1. Lasting wealth comes from passive income

   Otherwise known as making money while you sleep. Passive income is one of the most enjoyable ways to make money.

   The most common form of passive income is income derived from share or property investment. Essentially it’s the ability to make money from money without physical effort.

   Within your own business, you can create a passive income stream by creating digital products - you create the product once and sell it over and over again in perpetuity without any further effort required from you.

2. Compound interest is the 8th wonder of the world - understand it.

   Compound interest is a magical, beautiful, form of mathematical perfection.

   Compounding occurs when the interest from your investment is continually reinvested.

   You make an investment of $1,000.

   Your investment generates say 10% (or $100) interest income.

   You reinvest these earnings back into the original investment.

   Your investment is now valued at $1,100 and @10% generates $110 interest, which is reinvested.

   And so on, and so on.

   Each time you reinvest, the compounding effect increases and over time the effect is mind-blowing!

   For example, say your 14-year-old invests $2,500 per year for ten years and this investment earns on average of 10% p.a. This $25,000 investment will grow to a staggering $1,500,000 by the time he/she turns 60 (46 years later).

   A $25,000 investment has magically transformed into $1.5m.

   This is the magic of compounding. Make sure it’s working for you (assets) rather than against you (debt).

3. Holding cash actually diminishes your wealth over time.

   Everyone needs a cash buffer or emergency fund. But holding extensive amounts of cash over and above this actually diminishes your wealth over time. This is because inflation (the cost of living), rises faster than bank interest rates. $1 today will buy you less than $10 years ago.

   Instead, ensure you put your excess money to work. Invest it. Ensure it’s put to work.

4. Once you spend your money it’s gone.

   Spend your money wisely and purposefully because once you spend it, it’s gone. Choose to allocate a portion of your spending on buying income-producing assets such as a diversified share portfolio, upgrading your professional skills, or enhancing your income-producing business.

   When you buy assets with your money it grows rather than depletes.

5. Not all debt is bad.

   There’s good debt and there’s bad debt. Good debt is when you borrow money to buy an asset that appreciates in value over time or generates and income - e.g. property, shares, or education. Bad debt, is investing in something that doesn’t grow in value - e.g. a car, consumables, fashion.

   Next time you’re about to use your credit card, ask yourself whether you're adding to good debt or bad debt.

   Awareness is the key.

6. Procrastination is a killer

   100% of the shots you don’t take fail.

   How much longer are you going to wait before you start planning for your money? What are you afraid of? Getting it wrong?

   There are so many tools available these days to get your money sorted. If you want to learn how to better plan for your money and generate new income streams, start with my Signature Money Program. It’s a one-on-one program that promises to transform your relationship with money. I’ll teach you positive money habits, how to open your mind to new income opportunities that align with your values, and of course how to invest.

   The best time to plant a tree was 20 years ago. The second best time is NOW.

   It’s time.

   I can do this. I am doing this.

   Your future self thanks you.

Love,

Julia

Legal Note: Information provided by Love Luck Wealth is factual in nature and does not take into consideration your personal financial situation. It is for educational purposes only and does not constitute financial advice nor financial product advice in any way. Remember, the value of any investment can go down as well as up. Before acting, you should consider seeking independent personal financial advice that is tailored to your needs from an appropriately licensed or authorised financial adviser.