Smart Wealth-Building Life Hacks You Should Know
Before I begin, let me say this. It’s super important:
I never understood why the subject of money is so taboo in society.
Or why people idolize money by making it seem like it’s something so unique and special. Something so scarce that it’s reserved strictly for the lucky top .001% of the global population.
Why? Who brainwashed everyone into thinking this way?
Did you know there was a time in history when people used to get paid with salt?
Yes, look it up. Salt was that valuable. And that’s why we have a common phrase we still use today to denote someone’s worth and value, and what he/she brings to the table, by saying “worth one’s salt.”
I just can’t get my head wrapped around why today’s digital form of money or paper currency is any different than the methods of transaction used in the past to buy/sell and barter for goods and services.
If you think about money like the way you think about salt. You automatically pull it down from its high pedestal within your mind. It’s just another “thing” that is plentiful in the world. You can go out and get more salt right?
Money is simply a tool. Don’t glorify it, and don’t overvalue it.
It’s as plentiful as the sand on all the beaches in the world.
Now go get more salt!
The Easiest, But Slowest, Way to $1,000,000 (Using Math)
I mention this time and time again in my posts, because it’s that important.
What if I told you that you can hit a million dollars if all you did was invest just a few dollars a day?
And the reason why I’m calling it the easiest way to $1 million is that it’s just simple math. Other than you consistently investing just a few dollars a day, it has surprisingly little to do with what you need to do.
You Need to Create a Money Snowball ASAP!
A rich person’s money isn’t different from a poor person’s money.
One just has more than the other.
If you haven’t read my older article about the “Money Snowball Effect” you should check it out. The concept is simple. Just like creating a snowball and rolling it down the hill.
Everyone needs to create a “money” snow ball that they can “roll down the hill”, so at some point the snowball gets large enough that it tumbles down the hill on its’ own. Even without your help.
In other words, you need to amass enough income-producing assets to get to a point where your assets make more money, by itself, than you can ever make by working a 9-5 job.
Related: The Money Snowball Effect
Invest Your Money Overseas – Risky But Highly Profitable
This is a little technical so I’ll keep it short: last I checked, the US stock market has a Cape Ratio of 29, Price to Earnings Ratio of 26, Price to Book of 3.1 and Price to Sales of 2.1.
Here’s what that means:
The US stock market is fundamentally overvalued. I know that sounds highly pessimistic, so I don’t want you to misunderstand me. I’m actually super optimistic about the US stock market from a long-term perspective.
The US will continue to do well going forward; because, there’s an inherent and intrinsic value that the US stock market provides that no other market in the world provides (i.e. relative stability, favorable laws, corporate governance, low corruption, capitalistic free market structure, innovation of US companies, etc).
But strictly going off of fundamental value, there are countries that are trading at huge discounts overseas.
Some countries, like China and South Korea have already done very well so far this year. At the time of this writing, the South Korean stock market is up 30% so far this year!
Compare this to the US stock market’s 13% increase so far this year.
So even though the risk is a lot higher, putting money into stocks is inherently risky anyway. So don’t be afraid of investing money in overseas stock markets.
Your Savings Rate is Mathematically Unrealistic
This one’s just math as well.
Did you know if you saved 10% of your paycheck starting from when you get your first job at age 22, assuming a 5% annual ROI, you’ll be able to retire in 51 working years (age 73)?
If you save 15%, you’ll be able to retire at age 65.
If you save 50%, you’ll be able to retire at age 39.
Don’t overthink it, this is straight up math.
If you’re not saving a portion of your income, you will never be able to have financial security.
Related: Did You Know – You Can Retire Early?
Schooling, Schooling, and More Schooling? Really?
Ok, so if you’ve been following me for a while, you’ll know that I’m not that keen on traditional schooling.
I’m talking about our school system. The typical K-12, college, post-college, doctorate, etc. I think, for the most part, it’s a tremendous waste of time and opportunity cost.
I get it. In a perfect world, if you put in the time, effort, and resources to get your masters or doctors in something, you should be rewarded by making a lot of money right?
Right. But the world doesn’t work like that anymore.
Even just 10 years ago (in the mid to early 2000’s), a college degree meant something. But now, I think the market has an overabundance of “diplomas.” It’s gotten to the point where even a masters is not as big of a deal as it used to be.
And that sucks if you’ve spent the time and money to get that diploma or certification.
Not only that, due to the increasing advances in technology, I personally think that careers will no longer be 40 – 50 years long in duration.
I foresee, the majority of people, having multiple careers throughout their lifetime. Old jobs will be replaced with new jobs. But those newer and newer jobs will come faster and will themselves be replaced faster and faster as time goes by.
Stop Thinking You Need Money to Make Money
This is a common misconception of how wealth-building works.
The thought that you need to have a high income to become rich.
It’s simply not true. You’ve heard of compound interest right?
The iron-clad law of compounding does not play favorites. Whether you’re compounding $1 or $1 million.
There are janitors (no offense to janitors – it’s a noble profession), that pass away leaving millions of dollars behind in savings. This should be proof enough that it’s not how much you make, but how much you keep of what you make; and how diligently you save and invest, that makes all the difference.
Start a Business and Do Some Side Hustles
You need to start a business.
I’m not saying you need to go all in on it by quitting your 9-5 job.
Rather, what you should be doing is creating multiple sources of income on the side by doing side hustles outside of your primary 9-5 job. Because, again, gone are the days of staying at one job for 40 years. If you think your job is safe, you’re living in some sort of fantasy la-la land.
The days of yore where you could plop down at one company and rely on just one source of stable income and a hefty pension to look forward to at the finish line – all that is long gone.
Starting your own business, having multiple side hustles, and creating a substantial money snowball is the only way to preserve financial security for yourself and your family.
What are your thoughts on these wealth-building money and life hacks? Which one of these are you doing today, and which ones are you going to implement this week? Pick at least one of these and start today; don’t delay!