Good Day Everyone,
Sorry I missed posting last week. I was in Nashville for a bachelor party, and I certainly wasn’t doing anything that is becoming of a personal finance blogger but I’m back now and ready to get back at it. Today’s post will be short, but very important.
Many personal finance sites or books you come across might tell you that in order to build wealth, you have to make more and spend less. While this is obviously true, that alone isn’t going to be enough to get you rich. If you think about the wealthiest people in the world; Jeff Bezos, Warren Buffett, Bill Gates etc. These guys have a few things in common.
- They don’t earn the highest salary in the world
- They don’t have their net worth in cash/ they are heavily invested at all times
- They don’t panic during a market downturns (which is happening as I write this)
- They think long term
- While they all have nice and expensive things, they never let material things get in the way of their business/financial goals
There are many more things that I came across in my research for this post, but these are the things I think are most relevant for most people.
So how can we apply this? If you’ve decided to pursue a life of building wealth for you and your family, then the most important first step is to be an investor first and a consumer second. An example of how I applied this in my life is when I was using Telus as my wireless provider, my monthly bill was $50 + tax. I thought to myself “Damn that’s expensive!” Shortly after that, I went to my online broker at the time (BMO Investorline) to look up Telus stock. At the time it was paying roughly a 4.2% dividend yield which meant it would take roughly a $15,000 investment for the company to pay me enough money to cover that phone bill, so I made it my goal to have that much invested in Telus. Years later, I finally got to that point and it’s still a stock I own and remains one of my best long term investments. So next time you are considering a discretionary purchase, really think about whether or not that thing will bring you the value versus what you are giving up to purchase it. (ex. is that $2000 iPhone worth 2.6% of 1 bitcoin which could potentially help me retire 3 months earlier?) If the answer is yes then buy it, otherwise, put it down.
The second step you need to figure out is find your area of specialty and invest in that. Personally, I like to invest in stocks and everywhere I look (especially in malls) I see ticker symbols everywhere and I find doing the research for my portfolio highly entertaining. Investing in assets come in many forms, but investing in what you understand is very important. I will talk about different options in future posts.
I’ll leave it at that for now. I hope this post gets you thinking more critically about how you approach spending and investing decisions. For my post next week, I will be posting my dividend portfolio so you can follow along with me. Until then, please feel free to ask me any questions you might have regarding investing, finances, or anything else you want to talk about.
Have a Great Day!
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