There are tons of ways to get rich: you can work at McDonald’s, be a manager at McDonald’s, own McDonald’s stock, sell covered calls using McDonald’s stock, or own a McDonald’s franchise.
All of these paths can lead to wealth and happiness, but they will each take a different understanding of the principles of wealth. Each approach uses varying amounts of leverage to maximize the concepts of saving and investing. It is your job to figure out where you are and how you need to become rich.
The principles of Saving and Investing are similar but vastly different. When you understand both, you can adequately leverage situations in your life to obtain a more considerable amount of leverage. No, I am not only talking about financial leverage (debt).
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If I work at McDonald’s as a cashier, I don’t have much leverage, so I want to build some. As Dave Ramsey says, I start by saving a $1,000 emergency fund. This gives me the security knowing that I can survive through an emergency situation.
Now, it’s time to become an investor. Nope, not to invest in the stock market, but in myself. I have to weigh the return on investment of my situation. Should I go to college to get a better job, or can I double down at McDonald’s to become a manager?
In this case, I decide to double down and become a McDonald’s manager because it doesn’t cost money. There is also a path higher than a local manager in the form of regional or district managers.
In short, there are ways to grow in the McDonald’s game continually. Most people stay there—they find McDonald’s is the route to pursue and put all of their chips on the table.
Don’t do this, please. I did this with the Marine Corps for twenty years. I grew to the top of the enlisted chain, but I didn’t use my free time wisely. I didn’t build anything on my own outside of my employer.
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Back to the McDonald’s worker (myself). I have two options for success as a McDonald’s manager at any level. I can save a large amount of money, or invest my time and money into assets that work for me.
Your Situation. It all depends on your situation. You may be a single parent who doesn’t have time to invest in a small business. You may be twenty years old and living at home—your only goal being to move out of your family’s house.
Whatever the case, you can find reasons, justifications, and excuses not to strive to become a better saver or investor.
Savers require less self-education and effort but need more time for their money to compound for them.
Investors require more time reading, formulating, and building, but you can multiply their money faster. Then, they can use compounding to accelerate their cash pile further.
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Saving vs. Investing. So which is better, saving or investing? That ultimately depends on who you are and where you are in life. If you have limiting beliefs about rich people, fear of the markets, or no confidence in your ability to read and comprehend, you could be behind.
Some of these limiting beliefs may not be yours; they could be your spouses’ or families’ mindsets. In all of these cases, whether the fears are yours’ or someone else’s, you need to do the work to overcome them.
Books like “Effortless Money” and “Think and Grow Rich” discuss the mindset of money. You have to believe that money is your ally, not your enemy. This financial mindset stage may take 6-12 months to overcome, but it can lead to a lifetime of financial success.
Savers. Most people in the world are savers. They seek financial security by ensuring that they have money in the bank. Over time, they want their money to compound safely into the future.
Saving doesn’t require much information or time involving the markets, interest rates, commodities, business, real estate, and alternative investments (crypto, wine, gold).
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Savers aren’t trying to hedge against inflation or buy mortgage REITs when the 10-Year Treasury turns in their favor. There is nothing wrong with working and saving your money, putting it into savings vehicles that can compound like a 401K.
I have one caution for savers; you need to learn to invest over time. Say you retire with $1 million in your 401K as you turn 66 years old. If you don’t know how to properly withdraw this money using debt, bonds, taxes, etc., you may lose your money too quickly.
Investors. An investor who reaches age 66 with $1 million in a 401K will know how to make this money work for them. They weigh their options and make decisions that can keep this money growing.
They may invest in a business that their children run, buy a couple of rental properties, become an angel investor, or build an income portfolio for current income.
Investors see the world through a different lens. Many people believe investors only think about money, but this is further than the truth. An entrepreneur (and investor) only gets paid by adding value.
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If I invest in a business that hurts people, I will lose my money. If I invest in a company that adds value, I will have an income stream for a long time.
I have one caution for investors—don’t get in over your head. The world wants you to speed through the process, but building wealth slowly is the way to keep your fortune. There are no cheat codes or shortcuts.
The only shortcut is reading books and learning from other people’s lives. You can also take online courses, watch YouTube, and read blogs. These aren’t shortcuts but valuable research from subject matter experts. One day you can include yourself in this category.
Can you be a saver and investor? Yes, you can do both. In fact, I recommend it. An investor should have a nice emergency fund before they explore larger investments.
A saver can open a brokerage account and start index fund investing or a dividend growth portfolio. The key is not to go outside of your comfort zone. Don’t run and purchase cryptocurrencies because everyone else at work is buying.
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You can enlarge your comfort zone by reading books. I didn’t know anything about cryptocurrencies, so I grabbed the book “How to DeFi.” After reading books and following crypto blogs, I find that the USDC stable coin is my go-to coin. It’s safe and yields 9%. You have to know your goals, thoughts, and long-term objectives.
Know yourself. Where do you see yourself in 30 years? Who are you with, and what are your daily activities? If you are sitting on the porch on a farm, watching your grandkids play with the animals, you may be more of a saver.
If you are traveling from country to country, cruising on a ship, and sipping fancy drinks on the beach, you may be more of an investor. Each dream has its place within the right person. No one can tell you that your plans are bogus (only your inner dialogue).
I dream of being on a farm or quiet location with my wife, watching our grandkids play with animals. However, I want to be rich with passive income. I don’t want anything to break my illusion because I lack resources.
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Conclusion. Saving and investing have their place in the hearts of many. Most people will be savers; however, savers can dabble with investing.
Investors see the world through a different lens. When they see an empty parking lot, they see an apartment building, passive income from parking, or a place to invite food trucks. They evaluate the return on investment with everything in their life.
They ask themselves, should I cut the grass or write a book? Can I outsource my grass duties to someone while earning more money elsewhere? That’s the mindset of an investor.
No matter where you fall on the scale between saving and investing, know that you are changing the lives of future generations of your family. The sacrifice you make is noble, and you will be rewarded. Good Luck on the path!
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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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