By Miles Clyne
The old saying, “it takes money to make money” is probably one of the greatest truths to building a fortune. You will also hear quotes like “My first million was the hardest.” But these quotes are useless when it comes to actually building your net worth. The reality is, most of us have to fend for ourselves and figure out the whole money thing.
What I can tell you from a long time in the financial industry is that there are some key concepts to hold tightly to.
The first: get in the habit of regularly saving money. There are a huge number of benefits that come from this. The obvious one is that you start accumulating savings. The habit of saving does something very powerful beyond the obvious of saving money. It proves to you that you can do with less. So no longer do you need the same level of income to meet your needs. Psychologically this is huge, every dollar less you need to live takes you closer to your absolute freedom.
As you learn you can do with less, it can motivate you to keep looking at all aspects of your life for ways to do more with less, or at least ensure you are always getting the best bang for your buck. The reality is these actions will enrich you immediately and into the future. This is predicated, of course, on the notion that you want some form of financial success.
It takes money to make money? If you have savings, it gives you a unique opportunity. Opportunity for one person could be misfortune for another. This may sound ugly and evil, but the reality is that many people get themselves into financial trouble because they haven’t figured out how to do more with less and protect themselves. They are forced to sell what they may not have been able to afford in the first place. We see this going on all the time in the stock markets.
The Savvy Investor
The savvy investor will wait patiently through times of uncertainty when panic grips the markets. Investors sell aggressively driving prices down, taking losses at time like these, just to ease the pain they are feeling. The savvy investor is then given the opportunity to step into the very market many are fleeing. Buying at bargain prices gives much larger gain potential when the recovery comes. The only way an investor could have this opportunity is if they were savers and had money to invest. If you recognize the opportunity and don’t have savings, you just get to watch the profits rather than participate in them. It definitely takes money to make money.
Giving yourself the gift of doing more with less is something only you can do for yourself. It is in my opinion one of the greatest gifts you can give yourself. No one can take that away from you. Used appropriately, it will help you create opportunities few can experience.