“Want a new phone? How about new shoes? Or, maybe this awesome new watch?!”
Your answer to many of these questions is, usually, most likely, “yes.”
“Do you need a new phone? How about new shoes? Or, maybe an awesome new watch?!”
The answer to this question, usually, most likely, is “no.”
If this is the case, why do you buy so many new things. Why do you buy so many things you don’t need to begin with? The answer to that question… Your mind is weak. Your self-control is abysmal. You live the way other’s tell you you need to. You buy things because it’s “popular” or “in style”. You buy things because a salesperson told you to.
You know the intentions of these sales people, yet you listen to them anyway. The whole reason the job of “salesperson” exists is to convince people who otherwise would not purchase a product, to make the purchase. A salesperson often appeals to the parts of us that want to fit in, look good, and feel good about ourselves. However, none of these require fancy gadgets or new shoes to achieve.
Instead of making pointless purchases, let me instead offer a nice alternative.
Investing is one of, if not the best way to make money. However, many people think that in order to invest they need to learn the ins and outs of the stock market. Which, for a long time was the case, stock market investing was reserved for those who spent exorbitant amounts of time learning and watching the market. Luckily for us though, nowadays, things are much simpler and accessible. So, instead of making purchases on pointless objects, we can now invest just as easily as we can spend money on a fancy new $200 watch.
That $200 watch is actually worth $300 if instead, you put the money into an index fund and do nothing else with it for a few years, but I’m sure you’ve heard those numbers before, and If they haven’t worked on you yet, they aren’t going to. My personal favorite way to look at it is to see the numbers as time. How long did it take you to get that money? Is your time worth that object?
Now, you may be saying, “Sean, $200 turning into $300 after years goes against that logic.”
No. That view is simply incorrect. If you invest $200 into an index fund, it will take you about 30 seconds. Then you go on about your day, your month, and your year. You didn’t invest anything more than 30 seconds into making that $200 into $300. It’s not like you are sitting on a park bench twiddling your thumbs day after day for a few years while that money grows.
Investing in the sense of index funds, is like looking at an exponential growth curve, literally, here’s as an example:
This image was pulled from an article on Ramit Sethi’s – I Will Teach You To Be Rich Blog – I did not have anything to do with the creation of this visual.
The reason I showed the S&P 500 chart is because there are index funds that invest in every company the S&P 500 has included. Meaning, if the S&P 500 drops a company, so does the index fund, and it will pick up whatever company the S&P 500 does. So you are always invested in the best companies in America, and get to harness the power of the American economy.
Investing in index funds is smart and worth while, but it should not be your only investment. An index fund is only as powerful as the money you put in. You need to find a way to increase the amount you are putting in. An index fund is quite literally free money, and adding more money to it gets you even more money.
“Quick Mafs.” – Big Shaq
You should always be searching for ways to increase income in order to increase investment. Often, the pursuit of one of these is equally the pursuit of the other. If done correctly, anyone, through the act of investing to raise income, and raising income to raise investment, can and will become wealthy.
For instance, you come up with a great business idea. You fund this business with your savings, thereby investing into said business. This business grows and begins generating positive cash flow. Out of this you have created more income. Therefore, you can begin investing more into index funds, other businesses, or expansion, repeating the process.
This is a simplistic view of the process, but, none-the-less, it is accurate. Investing in index funds is just a fun bonus activity in order to get free money. The catch here, making the money to invest. You won’t be able to invest anything if you sit in your room, office, wherever you are, and never take action. The key is to actually do something. Go out, research index funds, and put money into one. Go out, find a passion, and start a business based off of it.
“But Sean, I don’t know where to start. Nor can I ever muster up the motivation to do it.”
If this is you, I want you to read Desire & Persistence, another post on the blog featuring people who actually decided to get things done.
Afterward, please Invest in Live Intentionally: A 90 Day Self-Project by Harsh Strongman of Life Math Money. This is a fantastic program that helped motivate me to take action. I hope it will do the same for you.
Live Intentionally: A 90 day Self-Project
A special thanks to Life Math Money and Harsh Strongman for creating this awesome program. The fact that this website even exists is thanks to the motivation I received from it. Click the image above to check it out! If the program doesn’t work for you, get your money back.
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