Don’t depend on salary as your only means of survival, learn how to create extra streams of income.
So, if you are someone who is working based on 100% commission based job, or even a full time employee, you should understand the importance of making your money work for you and having more than a few income streams. Even if you are working at a full time 9-5 job Monday to Friday, you should also utilize your extra time and have more than a few income sources.
Success has a lot to do with your mindset. Here are five ways you can achieve financial independence:
Work for Assets
“The rich buy assets. The poor only have expenses. The middle class buy liabilities they think are assets.”
Rich people with a financial education know the difference between an asset and a liability.
Because they do, they set themselves apart from poor people (meaning people with a poor mindset) in the following ways:
- Their income isn’t dependent upon an employer or boss: The streams of revenue a wealthy person has might include dividends, interest, rental properties, and royalties.
- They spend their time, energy, and money on acquiring assets: There are four assets that can make a person rich.
- Businesses (ones that don’t require the founder’s presence)
- Real estate
- Paper (stocks, bonds, mutual funds, and savings)
- Commodities (oil, gold, silver, etc.)
- Wealthy people avoid expenses and liabilities: On a financial balance sheet, this looks like a full asset column, while their expenses (taxes, food, clothing) and liabilities (mortgage payment, consumer loans, and credit card debt) columns are entirely empty. For those financially struggling, the reverse is true. As Kiyosaki puts it: “Their balance sheets are not balanced. Instead, they are loaded with liabilities and have no real assets that generate income. Typically, their only source of income is their paycheck. Their livelihood becomes entirely dependent on their employer.”
- Rich people work for themselves: The Rich Dad only works for another person for a short period of time so they can gain more assets. However, the Poor Dad carries the incorrect belief that working for someone else for a lifetime is what generates wealth.
- The financially well off forget about receiving a paycheck every week: Wealthy people stop chasing money and start chasing opportunities. They work to learn, explore what they’re passionate about, experience human connection, and feel fulfillment and happiness. On the flip side, the poor and middle class work for money. They want more of what they don’t seem to have enough of. Additionally, these people fear that what they do have will run out. As a result, they are constantly in a state of being that operates from a place of fear and greed.