Investing is an entirely different world from Saving. You can become a millionaire by using both methods, but the speed at which you achieve this status differs. Once you understand the principles, investing may interest you.
What is Investing? My personal definition of investing is using money to provide financial freedom. For reference, my personal definition of saving is using money to provide financial security. Please read my article titled “The Magic of Saving” to understand saving better.
Investing is misunderstood. Investing may be one of the most misunderstood words in modern society. Almost everything in life is an investment, but most people believe the word just belongs to the stock market.
The Magic of Reinvesting
You invest in anything you hope to get a return on your time or money. Yes, you can invest both your time and money. If you don’t expect to get a return, you are giving.
For example, you invest in your partner when you get married, and they invest in you. You are investing in yourself when you decide to get a college degree. You expect that degree to earn you great returns on future jobs.
The bigger picture. Please understand that almost everything we do is an investment when it comes to investing. If you can build that mindset, you can become a highly successful investor.
If you are shopping for a new computer, it should be an investment. It should increase your productivity or capacity. If you are buying a video game, do you plan on keeping it long-term as a collectible—potentially giving to your kids or grandkids?
Read before investing. The most critical concept of investing is to read before you begin your journey. You have to understand “why” you are investing and your long-term goals.
Mailbox Money: The Power of Rents, Royalties, and Dividends
I recommend everyone start with Robert Kiyosaki’s books. He gives you an overview of investing and critical concepts that could change your life—they definitely changed mine. Here are some books I recommend to begin your investing journey.
- “Rich Dad Poor Dad”
- “Rich Dad’s Cashflow Quadrant”
- “Rich Dad’s Guide to Investing”
- “Retire Young Retire Rich”
- “Unfair Advantage”
- “Before You Quit Your Job”
An infinite Return. I learned from Robert Kiyosaki’s teachings about the concept of an infinite return. If you can understand this concept, it will guide you to make solid investments over your career.
An infinite return states that you have an asset, yet none of your original money is tied up inside the asset. This asset would still produce income, yet you would have your initial investment back and could then reinvest into another asset. This is called the velocity of money.
Let’s say you bought a rental property for $100,000 cash. You can rent the place for $1,000, all going towards your profits. In 100 months (8.3 years), you would have your entire investments back yet still have the home. Your rental home would be in an infinite return.
From -$77,000 to +$150,000 in 22 Months
The more the merrier. The idea would be to have a ton of infinite return investments, all accelerating your wealth creation. As you accumulate sources of cash flow, you start to fund your money system (dividend-portfolio).
Yes, you can get an infinite return from the stock market using the rule of 72. The rule states that dividing 72 by your dividend yield will tell you how many years to get your initial investment back.
So if I have a dividend stock that pays me a 4% dividend yield, it would take 18 years to get all my initial money back (72/4). If I had a closed-end fund that pays a 10% yield, it would take 7.2 years (72/10).
For this reason, the stock market is not a wealth generator. As an investor, it’s best to seek & build infinite returns THEN use those proceeds to invest in the stock market.
Compounding: The 8th Wonder of the World
My infinite returns. I have a couple of infinite returns in my investment portfolio currently. My favorite is the concept of renting rooms. Most people will not see renting rooms as an investment, but it could be the best out there.
It cost us about $700 to set up two rooms for rent. We charge $800/each for a total of $1,600/month. We were in an infinite return in the first month. All of this money goes straight into the stock market, where we earn a yield on infinite money. We are literally compounding on “free” money. Do you see the power of investing with intention?
Blogging and writing books are my second infinite return. I pay about $400/year to host my website and maintain a membership to Pixlr for stock photos. Everything outside of that is free.
So, I can wake up, write some articles and books, and create assets that make me money. As I build an audience, my books and articles grow more wealth.
5 Benefits of Options Trading
You see, I am earning revenue from Google Ads on my blog, paperback sales, eBooks sales, book sales outside of Amazon, and affiliate sales. I am just getting started.
I can then add online courses, merchandising, foreign book agreements, etc. Again, by choice, I have spent very little on my book business. I want to show that you can build an empire by investing little to no money.
Yes, I am spending time building my business day by day. However, I am not exchanging time for money; I am exchanging time for assets. Again, you have to understand the concept that investing is about acquiring assets that produce cash. You can acquire assets by creating, building, exchanging, or buying them.
Getting started. Your investing career doesn’t need to start in the stock market, but it’s not a bad place to begin. You can dollar-cost average into blue-chip dividend-paying stocks and become very successful.
Prepare for Inflation
But the true power comes from putting assets into an infinite return. Take a step back and find some low-cost ways to invest time or a small amount of money that quickly puts you in an infinite return. Let’s think of some ways together.
- Review video games. If you have many games from older generations, start a retro game review website. People love to reminisce about past games.
- Buy a barn house. You can use leverage to buy a barn house and rent it out through a rental website. If you have none of your personal money in the deal (only the bank), you could be in an infinite return in the first month.
- Start an herb garden. You can probably start an herb garden for under $300-400. You can build out a nice income stream from blogs and videos with the proper coverage.
- Write book reviews. You can join Amazon Kindle Unlimited and read and review two books a week. Trust me; as someone who has 85 books complete, there is money here.
You see, these are things that most people wouldn’t consider investments. You have to look at the bigger picture. When you put things into an infinite return, you are printing money. There is no better feeling than getting money from using your brain.
The employee mentality. The most dangerous threat to your wealth is the employee mentality. When we exchange time for money, we use no leverage to build wealth. Most people are in-debt-ured servants and are up to their eyeballs in debt; that’s how the world wants us.
That’s why I always recommend you become an investor as you pay off debt. Paying off debt is great, but you’ll never know how to create money if you retain the employee mindset. An investor creates money, which is one of the main differences from a saver.
Welcome to Stress Freedom
Conclusion. I know there are a lot of higher-level thoughts that you may not understand, and that’s okay. It is better to hear the thoughts and not comprehend them than never listen to them. Trust me, the first time I read “Rich Dad Poor Dad,” I didn’t know why he didn’t pay the kids to work for him.
But over time, I realized he didn’t want them to work for money or become wage servants. Rich Dad wanted the kids to use their brains to create money. That’s what an investor does to build wealth and provide for their families.
If you read something that grabs your attention, please dive deeper. It may take you a year to understand the topics, but once you do, you’ll see the world in a whole new light. And it is a much brighter light when you are debt-free and have passive income coming in every day. Welcome to the World of Investing!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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