It does not matter how much money you make; it matters what you do with it. If you want to get ahead financially, you have to spend less than you earn and invest the difference in assets.
When you think of assets, you think primarily of money. This is good, but it isn’t enough. You are not only spending money. You are also spending time and effort. Everything has a cost, and where you put your time, money and effort will determine how much of a return you get. So, put your time, money and effort into those things that make your life better, reduce obstacles and give you new opportunities. Put your money into assets.
What are assets? Assets are anything that decreases your expenses and increases your income. They can also be something that stores wealth without losing it. If it becomes less valuable over time, it isn’t an asset. If it doesn’t make you any money and only increases your expenses (time, money, effort), it isn’t an asset.
If you are renting a house that is $1,000 per month and you can buy a house that ends up being $800, then by buying a house you’ve saved $200 per month.
If you rent that same house out for $1,000 and pay $800 for mortgage and maintenance, then you have $200 more money coming in each month.
If you get a new skill that lets you earn $10,000 more per year, then the time, effort and money that you spent on obtaining that skill paid off. That skill is an asset.
If you put money in an IRA that grows at 6% annually on average, then that is an asset that stores wealth and builds it.
If you move to an identical apartment 30 minutes closer to where you work, then the proximity of your apartment has produced a savings in time.
Assets are important because assets make your life better. So, look around and start to think “what is it that I could do to make my life better, reduce my expense of time, money and energy AND increase the time, money and energy that I have.”
By thinking this way, you will be more open to spotting opportunities that can increase the quality of your life.