Using Passive Income to Escape Financial Gravity
Alot of people regularly use the phrase “the rich get richer, and the poor get poorer” as an excuse for why they can’t get out of their financial situation, but many people don’t realize that in many respects, these people are actually telling the truth. Although being poor often involves a certain mentality that keeps people in their situation, there are also many other reasons that it’s difficult for a poor person to get out of their situation.
Many people like to call this “financial gravity.” In order to escape the forces holding a poor person to their lifestyles and financial status, they must exert much more effort in the beginning. As they slowly start to rise, and make/save more money, their efforts will generate exponentially greater rewards.
Many times things cost less for someone who has money, than for someone who doesn’t. Think about it- with a large cash reserve, people with money are able to take advantage of sales whenever they come up, buy in bulk, and use extra money to invest with and generate more.
Many financial experts fault credit cards for the middle class’s inability to move up in the ranks. Many people with less money feel that they have to borrow in order to keep up with the Jones’s or get ahead.
Just like people who have money, the only way for people who don’t have money to become wealthy is through passive income investing. If you don’t have money the first thing you should be doing is paying off your debt. There are so many services and books out there to give you a map of how to do this. Once you’ve done that, make a point to set aside 10% of your income no matter how little you make to invest with. Don’t tap into this cash reserve, and let it grow until it’s a workable sum of money. Then explore passive income businesses that will run themselves while you continue to work. Examples of passive investments that people with less money may choose are bulk candy vending, blogging, and automated ebay businesses. As you make money in these less passive and less profitable investments, use your profits to invest in larger investments, eventually working your way up to real estate or stock market investing.
Related posts:
- Building Residual Income Tips There are many ways to build residual income. There are a ton of businesses you can start such as an internet business. There are investments you can make or even products you can create. You can write a song, a book, or even create some sort of intellectual property. The point of all of this [...]...
- Why Invest in Real Estate Now In today’s unstable economy, many people are skeptical about getting started investing in real estate. Unemployment continues to rise, there is daily news about the increasing fragility of the housing market, as well as record numbers of foreclosures. Instead of surrounding yourself with negative “doom and gloom” reports of the nation’s economy, focus on why [...]...
- What Do Dimensional Fund Advisors Offer To Investors? Dimensional investing is a new type of investing strategy that is out on the market. It is a strategy that is based on following market trends, regardless of what the “rules to investing” may state. As an example, if it is common practice to invest into one type of fund, but Dimensional sees that fund [...]...