Incentives | Insist on investing in sustainable income with compound interest for a lifetime

Feb 6, 2022

🐸 Working hard until you are 65, do you really have enough money to retire? Share a simple but important money mentality.

First of all, I want to write this article because I have contacted my former classmates in the past few years during the epidemic, and found that 90% of them live on a salary that is not very growth-oriented, plus the annual suppression of inflation , and there is no financial management concept, everyone's savings are becoming less and less. In fact, it is really difficult to learn money knowledge by yourself, because financial management is a class that is not taught in school, most parents do not have relevant knowledge or actively communicate with their children about money management (personal experience), or no one around them discusses the importance of money. .

And when did I start wanting to learn about passive income and financial investing? From the year I was seriously ill. Before getting sick I gave myself no vacation days, 2 jobs, 7 work days, so I fell.

I have to wait until I lose it to cherish it. I already feel the same way. Health is 1, everything else is 0. So during my recuperation, I began to think about a lot of life questions. What purpose do we live for, and what is the purpose of working so hard? What are the smarter ways to achieve a balanced work-leisure, a happy and healthy lifestyle with choices?

So I started reading, watching Youtube, talking to people. Here's what I want to share with you about the importance of investing in a lifetime of compounding, sustainable income.

What is Active Income?

Earn money in exchange for time. If the only income you have is active income, it means that if you can't go out to work one day, the income will stop, so you need to work constantly to support living expenses. This is active income.

Many people think that trading time for money is the only way to make money; however, if you want to have a better quality of life in the future, you should think carefully about how to turn your 10-hour work day into a compounding output.

Working 52 weeks a year, 40 hours a week, if you have a certain position class, it actually sounds like a good income. But remember time is money and think about how much of your personal time you are going to spend to make that money. If you stop, get sick, get old, or any kind of life emergency, your income will drop or even go to zero immediately. You have to keep your personal time and energy in 1 job to earn an income, and that's the risk of active income.

What is Passive Income?

Passive income is income that requires minimal labor to earn and maintain. - Wikipedia

Creating passive income is what I will always strive for in my life.

Passive does not mean that you can have income without paying. But your contribution is not a one-time income, but a regenerating effect. Whether your goal in life is to be financially free early or to retire with peace of mind, hopefully you can have a basic understanding of passive income.

What are the options for passive income?

Google search keywords: passive income , you can find all kinds of income methods. Choose one or two models that suit your business, for example you can do:

YouTube
online store
personal website
write ebooks
real estate
online course
dividend income

and many more...

Passive income is not about doing nothing and getting paid. It requires you to take the time to build an asset-based content at the beginning, and then this content can help you generate income anytime, anywhere. It will always work for you and keep making money. And your passive career is not limited by location and time.

If you can free your time and location, your money is automatically worth 3-10 times as much. - BOOK: A 4-hour work week's author's golden quote.

If you only do active 9-to-5 work, even if you work very hard overtime, if you can work 60 hours a week. Outside of these 60 hours of work, there is no extra physical energy to earn more income. Because we are all human, our bodies need a good rest. Just like when I didn't allow my body to shut down in time, I got sick. Passive work is where you can make money 24 hours a day, 7 days a week, even when you're sleeping on the weekends.

Most people should be like me. They don’t want to only leave time for work. The quality of life I want is a balance between leisure and work. Giving up the beautiful scenery outside the window in order to work overtime is not the life I aspire to.

Investment and financial management

If I had a chance to meet myself 10 years ago, I would say to her: "Don't choose to give up learning money thinking in the golden age. Financial management is something that the school will not teach you, but it is a very important lesson in your life. 』

So if there is a chance to go back to the past 🥺 Even if you are very poor, you should regularly invest part of your pocket money. In fact, it is precisely because I am not rich that I need to start financial management and create passive income, because in the future I will meet a miracle, his name is Mr. Compound Interest.

Whether it's active or passive income, remember to invest some of your money.

Have you ever thought about a question, how much % has inflation increased in the past 10 years? And how much % has the boss's salary increased?

If you haven't started investing and financial management, no matter what stage of life you are in, it is recommended to learn about financial management and start investing. The way to consistently increase your income over the power of time is to invest. Because the compounding power of time makes money bigger. Knowing that generating more cash flow from your income and creating compounded income is the way you can live a better quality of life for the future.

Mr. compound interest

Do you know Mr. Compound Interest? Do you know the miracle he brought?

No matter how hard you work, you can't keep up with compounding interest, because you always stop to sleep and rest. Even if you run out of physical work one day, your money continues to work for you because Mr. Compounding is a 24-hour workaholic.

Mr. compound interest also has grades, choose smart compound interest.

Example 1:

You invested $10,000 in the stock market. The interest rate is assumed to be 8%. You can see that you made a total of $10,800 in the first year.

Compound interest starts to kick in in Year 2. Your $10,800 will earn $864 in interest. The next year, you'll have $933 in interest. What if it kept compounding for 30 years? Your $10,000 would become $100,000.

Example 2:

If you just put $10,000 in a fixed deposit, because the banker guarantees you 2% interest, you think it's a financial management that won't lose money. After 30 years, your $10,000 will only be around $20,000. Don't forget that there is also one of the scariest gentlemen who has been silently eating your money, his name is inflation.

No matter how hard you run and earn money, your dead salary may be lower than inflation. Even if you win, you are already exhausted. Where is the extra time and energy to enjoy life~ The beautiful scenery outside. Therefore, everyone must know how to hire Mr. Compound Interest to help themselves make money, and leave the rest of the time for themselves and the people around them. Is this the quality of life we want to pursue? Not just hard work, but smart ways to compound the return income for the same 8-10 hours of work.

In 30 years, what kind of money would you most like to own? $20,000 or $100,000?

Investment and financial management is actually one of the passive income of Buffett and other successful people, because they have known Mr. compound interest for a long time, and they know the power brought by compound interest and the crisis brought by inflation. If they can do it, so can we.

The first pot of gold is always the hardest to earn, which is why the sooner you start investing, the better . Whether it's building an online business or investing in financial management, it takes time. Patience and persistence are the keys to creating wealth.

Definition of Wealth Freedom

As you get older, you have the power to reduce your workload while your income continues to grow, which to me is financial freedom.

Financial freedom is actually equal to time freedom. With wealth and freedom of time comes good health and a positive mind. I think this is the meaning of our life pursuit in this life.

Whenever I see the news of the death of overwork, and the death of overwork in exchange for the bread needed for life, I feel very unbelievable and regretful.

In terms of my life goals, creating passive income and investing money is not about becoming super rich, but about freedom of time. Living expenses do not need to be considered small, restaurants do not need to look at the price, take a small trip with the person you like, allow yourself to rest at any time, freely arrange vacation days to accompany your family, have spare energy to provide social contributions... and so on. Things you can do when you are financially free.

Think about it, if you live your life only for money pressure or saving a little money, you will not have the energy to take care of yourself, be with the people around you, or contribute to society.

10-Minute Video That Could Change Your Lifetime Concept of Money

keep trying new things

Not that you have to leave your 9-to-5 active income job. Instead, you can use your after-get off work time to choose some online side hustle that you are passionate about. Give it a try and don't be afraid to fail, like writing an article, doing youtbue or running an online store. If you don't think it's right for you, change it to something else. It doesn't matter if you fall down or don't like it, I think every experience is very worthwhile.

We don't need to do everything well every time, it may or may not work for you. Getting experience in action can sometimes be more joyful than arriving at your destination, because you know how to do better next time, because you know yourself better, because you learn new things from the past and mistakes.

If you never try, you will never know where your path to success lies. And missed the stage of life. It's like people who have been living in the early days of Nokia phones and missed the growth and convenience that Apple smartphones brought us.

Take action

Money should not fall from the sky! How big your dream is, without action it's just talk on paper. So the most important thing is mobility.

Active income, passive income, investment and financial management can be carried out at the same time. Because if you don’t want to spend most of your life working to make money (active income), you should start to find a suitable passive income for yourself and learn investment and financial management.

Hard work, smart money management, happy spending, physical and mental health, enjoying life, and sharing contributions should be the quality of life that each of us pursues.