Howdy,
Are you ready for a simple financial awareness insight?
Nothing “heavy”, really. Just a human-centered approach that you can relate to for sure.
We work, first and foremost, because we need money. As much as we would like to believe otherwise, this is the truth.
We need money to support ourselves, to help our loved ones, to provide a comfortable life for our children, or to ensure a peaceful life in old age. We need money for our daily expenses, but also to make our dreams come true.
And this need for money takes us on life on an extremely monotonous road and not infrequently, very stressful. That rat race I'm sure you've heard of before.
We spend our childhood and adolescence in school, then work almost a lifetime to ensure our living needs and, if we are very good at what we do, to ensure comfort and pursue our aspirations.
Maybe we are extremely good at what we do and we like what we do and maybe this gives us enough financial rewards for a standard of living that satisfies us. It's great, but what could stress us is that we won't be able to keep up and, at some point, we won't be able to generate enough money to "live without the worry of money."
When we talk about money generated from work or even from the business we manage, I don't know how aware you are of the enormous amount of energy and resources you have to consume to stay on top.
To stay on top, you have to be in the best shape, to "expand" every day, to cross the old limits to get better and better.
It is wonderful that you get to develop at this rate, to grow in one year as others in 5, but life happens… at some point, you will grow old or you will change your priorities or others will appear better or you will simply you want to enjoy life in a different way.
Like any top athlete, you will have the rise, maturity, and decline. It is the natural course of life. When you are at the top, then the money flows; when you are gone, the tap of a lot of money also stops.
But what if there was another solution? If possible otherwise?
There are two major sources of money: labor and capital.
Work generates money from salaries, bonuses, rates perceived as a freelancer or freelancer, and most of the time even from your business. If in your business you control and manage almost everything, then the money comes mainly from your work, not from your capital.
Work generates more and more money when you are on the rise and then generates less and less money when you are in decline until it no longer generates at all.
Capital (money) generates other money, without your direct involvement. Money generates money when it is put to work and they have the habit of generating more and more money over time.
Capital does not age, does not get tired, does not get bored, and does not change its priorities, but becomes more and more potent, as time passes and accumulates.
In order to generate money, capital is subject to certain risks and as not many are willing to take these risks, those who do it intelligently make a lot of money from their capital, in the long run.
There are two ways to put your capital (money) to work:
1. Entrepreneurship / Cryptopreneurship
Where you have the potential to multiply your capital incredibly much. We are talking about the growth of 100% or more in the first years of entrepreneurship.
The downside is that you need a huge amount of time, energy, knowledge, and money to create a capital multiplier system that really works.
And the even more negative part is that the chances of failure are very high. Basically, 9 out of 10 businesses do not survive in the long run, and out of the 10% that survive in the long run, many of them are also of the "work the entrepreneur" type, meaning a good accountant opens an accounting firm and hires 2- 3 accountants, but he is also the one who centers and nods.
If you have such a business, don't be fooled, you also make money mainly through work (intelligence, that's right), not from capital.
Of course, there are success stories and you can be such a story, but you have to start on the road knowing what are the chances, dangers, and price you have to pay. For every Bill Gates, there are tens of thousands or hundreds of thousands of people who have gone bankrupt.
2. Investments
Basically, you invest in businesses that have already endured over time. You buy parts of the business that have already become money-making systems, for example, Bill Gates' Microsoft, which I gave as an example above.
When you invest passively (meaning you don't trade or change instruments like socks every hop), you start making money from the capital, not labor.
You end up owning small portions of tens and hundreds of functional businesses, which have survived and performed over time, obtaining in return a return - money generated by the capital invested by you.
Risk vs. Entrepreneurship/Cryptopreneurship
This option is infinitely smaller, because you invest in businesses that already operate and, in addition, you diversify your risk into tens or hundreds of such businesses. The risk of losing money in the long run, given that you do your homework decently, is actually quite low.
Also, the time and energy allocated are infinitely smaller because others (managers of these businesses) are the ones who manage and deal with the business, and others (auditors, competent authorities) are the ones who check the first ones for you to receive. the due part of the profit.
The minuses = Of course, there are disadvantages. You can't expect to get tens and hundreds of percent returns per year (as in entrepreneurship) because the businesses you invest in are already mature and have much lower associated risks vs. a start-up. Historically, stocks (in the US) delivered average annual returns somewhere between 9-10% per year in dollars, ie about 7% above inflation.
No one can guarantee this yield from now on because no one has a crystal ball in which to see the future, but the long-term fundamentals are still positive:
- The world's population is still growing and estimates say it will continue to grow for several more decades;
- The middle class, at the level of emerging and underdeveloped countries, is only now beginning to develop. A larger global middle class means more and more complex goods and services purchased, so the growth of the global business;
- The growth rate of technological development is dizzying and accelerating and, in parallel, we can expect labor productivity to increase, so again an element that benefits large businesses.
Much, little, you decide, but given the involvement of time, energy, and risks, it seems a fair exchange.
From my online Business programs 👇👆
Thank you for reading,
