People love money, and they like to spend it quicker than getting it. Why are we so sloppy on our money, when we can use it for future investment? On this post, I’m going to talk about why ordinary income vs. passive income is so important to understand.
The understanding of how money works
People say money isn’t everything; you can’t buy love or happiness with it. And they’re right, we can’t buy love or joy, and it’s not everything. But it is freedom!
On one side you start working for a company at 20 years old. After a couple of years, you have saved so much that you can afford a mortgage to move for yourself. Then you will get car loans to buy a car. Then you expand your house, expand the garage, go on holiday once a year.
In the end, you’ll own a house, cabin, car, family, stuff we don’t need and miscellaneous expenses to cover all your needs. You work for 42 years and retire with inadequate retirement savings.
Is this freedom? No, it’s a prison!
For your entire life, you have been paying the bank, car producer, rental company and the company you were working.
The only thing which is worth more than our paycheck is our free time. In a matter of fact, we sell our time to earn money. Instead, we could sell our time in education.
The picture is me in 2017 by the way. 24 years deckhand/forklift driver during education.
Selling my time as an employee and building someone else dream. I may look happy, but over time it will be a long and tedious career.
On the other hand at the 20s, you invest time in yourself, educate why successful people are successful. A few years later you are still underpaid or ain’t paid at all, but you will achieve a new personality.
You have a vision and a passion you believe in, and continue to work towards your goal and desire. Your friends and family are telling you to get a job, do something with your life, but they do not understand how important this is.
They point fingers, laugh and waiting for you to fail to come by to tell you
”I told you so.”
A few years later, you will have a breakthrough, and your business will rise.
Taking this path at age 20 will make you able to retire at 30 years old. For example, you work for ten years, to quit working for the rest of your life. Here is the most significant difference between ordinary income vs. passive income.
What’s the best investment you can do?
- Starting your own business
- Spending your time to educate your self
- Learn how money works for you
Because earning so much more than working for someone else. It takes years to accomplish it, but once you have your business rolling, you’re unstoppable.
There are four ways to have an income
E – Employee. You have a job, where you work for a boss. Getting paid hourly and your income on your activity. Also, you sell your hours to have an income.
S – Self-employed. You own a job, where you want to become your own boss. You get paid for your effort, but you will most likely be working longer and harder than an employee.
B – Business owner. You own a system, where people work for you. Now you have a salary based on the number of people is working for you.
I – Investor. You own an investment, were money work for you. You have an income based on the money you invest, and not on humanity mistakes.
95% of the world population is either employed or self-employed, and they earn just 5% off the world wealth. Means 5% is either a business owner or investor, and make 95% of the world wealth. So why do people choose to stay to the left side?
Robert Kiyosaki wrote the book Rich dad poor dad which he is known for. was he writes about his friend rich dad and his poor dad. He learned at a young age the lesson about money. Mindset and the wording make people think differently.
Poor dad says: I cannot afford it.
Rich dad says: How can I afford it?
A mindset like this will make a massive difference. Instead of coming up with the verdict you can not afford it, you give an opportunity for how he can afford it. Then you must solve the problem and find a solution.
Our greatest enemy!
When you finally realize there is a better way, there’s one that wants to prevent it. Your subconscious. I am fighting my psyche every day, and it is a hard battle.
He is thinking:
what I’ve should have done yesterday, I can do tomorrow.
Every day we are fighting to make the correct choices. It can be anything, not just business.
Here are a few examples:
- Do I go to the gym? No
- Could I be more healthy? Yes
- Do I smoke cigarettes? Yes
- Could I drink less alcohol? Yes
- Do I priority my home business? Sometimes
Here are just a few examples of many. For every adverse action or speeches you make, the subconscious will take advantage of it.
Example of a familiar situation:
You’re standing inside looking through the window, and you want to start jogging because it will make you healthier. Your subconscious is telling you, Screw that, it’s raining!
Then ask your self this. Should that be the reason I start jogging right now, or the excuse to stay inside?
Our subconscious works destructively against us and tries to find excuses.
If you say something negative, the subconscious receives everything you say. It believes in every negative thought.
Changing a habit or bad habit
Habits drive most of our actions, and 98% during a day is habits or bad habits. Breaking a pattern, and especially the narrow-minded people is tough.
They will say:
I’ve tried that once, but it isn’t for me.
The second time they try, they will say.
I tried that twice, and it was abnormal.
Then they try it for the third time, and they say.
I’ve tried so MANY times!
What? They haven’t tried three times, but many?
The fourth time they try, they say.
I’ve tried EVERYTHING!
So after four tries, we’ve tried everything. People are thinking and counting like this.
How many tries are you willing to give yourself until you’ve tried everything?