I don't know how the money everyone makes, how to use investment to achieve the effect of making money? Some people may even ask, why do you want to invest? Just put the money in the bank. The answer is simple, because of inflation, and it's particularly felt right now. Forty years ago, the median home price in the United States was $55,000. Twenty years ago, the median home price was about $125,000, an increase of about 2.8 times. The current median price is $350,000 (source: dqydj.com). That is, what you could have bought for $125,000 twenty years ago now costs $350,000. Now the price is about 2.8 times what it was 20 years ago. Looking at the data of the past 40 years, we can probably expect that the inflation in 20 years will also be 2.8 times what it is now, so it is possible that in 20 years, what you need to buy for $350,000 now may need to be purchased in 20 years. You can get it for $980,000.

How Banks Make Money

And if you keep your money in the bank, you can only earn a small interest. You can think of it as, the money you save now will not increase, but will decrease because things have become more expensive. And if you put your money in the bank and you don't touch it, that's letting the bank make money, because before you take the money out, the bank will take your money and use it to make a profit, and that's how the bank makes money, But they will make far more money than the little interest they give you, so they want you to save as much as possible.

Determine Your Investment Budget

So what you need to do is to set aside a part of the emergency fund first, deduct your expenses, and then think about how much money you can put out to invest. Create your own financial portfolio, which is your money-making portfolio. So what I'm going to talk about today is how to build your financial portfolio. Then how to achieve financial freedom. The so-called financial freedom, that is, your monthly passive income, more than your daily expenses. What is the so-called passive income?

What is "Passive Income?

The explanation on Wikipedia is that "passive income is when it is established, you can make money all the time", but it does not mean that you don't have to do anything at all. Maybe you will spend the most time and energy building this passive income at the beginning. , you don't need to spend as much time to maintain it, so your job is not passive income.

I think your investment or passive income should be divided into four categories, short-term investment, medium-term investment, long-term investment, and "passive income in progress, so as to achieve the optimal effect of rolling money.

Category 1: Short-term Investments

Now let's talk about short-term investment, that is to say, the holding time of this investment will not exceed one year, it is short-term, the risk is relatively high, and there are stocks with relatively large gains. Sell ​​it in a year or so, or sell it in a few days, and earn the difference. There are also recent NFTs. But remind everyone that short-term investments like this are quite risky, just invest in moderation, or you can use this method, first think that you will only spend a small amount of money on this high-risk investment, and then Don't put more money, then buy with this budget, make money after selling, and then use this part of the money to buy another one, and then sell to make money, that is, use A for B, B for C and so on step by step . In addition, there are also short-term, but relatively low-yield and low-risk short-term investments, such as fixed deposits in banks, bonds, mutual funds, and money markets.

The Second Category: Medium-term Investment

Medium-term investment, the medium-term investment I am talking about here, is not the definition of medium-term investment in stocks, but I think that for me, this investment project will take about one to five years. See the benefits, or you can get back the principal invested. For example, there are relatively high-risk equity purchases in startups, slightly lower-risk Real Estate Syndication, which is real estate joint investment, and general real estate and stock investments.

Category 3: Long Term Investments

Long-term investment, for me, is 20 years later, when I am 60 years old, the investment product that can pay off, like insurance, or buying a piece of land in a remote place, and after 20 years, it is developed , you can take it out and sell it for money, or a house in a remote place. Because it is a long-term and a little invisible, I would consider these risks as intermediate risks.

There is a concept that everyone needs to understand is that all investments have their risks, so don't take risks that you can't take. For you, there may be many new ways to make money that need to be digested, but don't reject it, because there are too many ways to increase income in this world, which you and I don't understand, and every method has its own advantages. A place to learn, so when you are not sure, you can learn first to assess whether the risk is something you can take, and then decide whether to make this investment.

The Most Important Category: "Passive Income In Progress

Last but not least, you also need an ongoing, slightly more stable "passive income, and the source of this "passive income is more than all your current expenses. Because if you don't have this income, you may not be able to take the higher risk to invest. That is, one or several of your own, profitable business or businesses, no matter what industry, as long as it is passive income. Here I can give an example: such as monthly rent collection, Airbnb, e-commerce companies, whether it is selling products, selling courses, or selling services, or affiliate marketing, these are all.

Multiple Sources of Income

In fact, it’s just a sentence, you need multiple sources of income, you can’t put all your eggs in one basket, slash, slash, and slash again, but I don’t recommend slashing too many items at the same time, so that you can’t study thoroughly. , may capsize. You can start with the first slash A, spend time and focus on learning it well, systematically, and stabilize it, then slash B, and then repeat the above method, gradually increasing quietly. In addition to enjoying life, put the money earned by these slashes into investment. And we have to plan ahead. If the money is enough now, it does not mean that it will be enough in 20 years, and it does not mean that it will be enough in 40 years. It is to constantly find ways to develop more sources of income. Like some people will not understand, why I already have an e-commerce company, but also to sell courses? Do you understand now? Another important point is that the slash project, if this project cannot be automated after it is stable in the future, I will not consider it, it must be passive income. Because if it weren't for the passive income slash, you wouldn't have time to look for the next slash. And don't be afraid to fail, because no matter what, you're bound to learn something to use as a seed for the next slash.

Personally, I actually have multiple sources of income. From the very beginning of the e-commerce store income, I have more money on hand to develop other sources of income. Then there is the income from selling products on my own e-commerce platform, the cooperation fee for selling technology, the income from lifestyle, the income from affiliate marketing, the income from stock, real estate investment, owning the equity of the start-up company and so on. Some projects make a lot of money per month, while others are only a few hundred dollars a month, and I'm still looking for new sources of income.

Open Source And Reduce Expenditure

After talking about investment, it is actually very important to increase income and reduce expenditure. Don’t because of the increase in income, unnecessary expenses have also increased, and you have no cash flow. Of course, you can still take the money and do things you couldn’t do before, but think about what this thing or this thing can bring you. A few years ago, when I was in my thirties, I thought, wow, my income is good, I can do whatever I want. I like to buy watches, famous cars, etc. Because of the increase in money, I spend a lot of money. , but I later found that buying these things would be fun for a few months at first, and then slowly shortened to a few days. In California, a car that is too high-profile is just a conspicuous target with a smashed window, spit on, or someone else's middle finger, but in fact, every car will have a smashed window, not necessarily a high-profile car. But if you really like cars and live in a safe country or city, you can still have the car you want.

Now, I will not spend this money indiscriminately to buy some luxury goods that will only last a few months, but if I really like it, I will still buy it, but very occasionally, it is purely from the perspective of durability. Purchased (excuse it!). If I want a more luxurious tour, I won't buy it, I will use my credit card points to exchange it. I even used my credit card points to exchange money for investing in stocks. I won’t talk about credit card points in this video today, because it’s not the focus of this video. If you want to know, you can leave a message below. , maybe I'll make another video about points.

Build Your Financial Portfolio Profitable Portfolio

So, after listening, you can start to create a financial portfolio that suits you from now on. Different age, different income, each person's portfolio is different. Finally, once again, don't put all your eggs in one basket and really don't rely on just one source of income.

Some people will ask, if there is no extra money, how to invest it! I can teach you how I went from being laid off and built an e-commerce company that made money automatically, so if you're interested, contact us for more information [email protected]