When you earn your first capital, there will be a lot of temptations and traps. Representatives of various companies will start calling and inviting you with a proposal and how to spend it. In fact, they always do this when they find out that someone is rich.
First principle – in no case do not buy assets that do not create income. You should not own assets, but primarily returns.
Second principle – spend less than you earn, and invest the difference in profitable real estate, companies or a portfolio of different financial products.
It is very important not to create and generate regular expenses. Like death, avoid regular passive expenses.
Key question: How much do you have if you do nothing? For example, a remote villa in France requires at least fixed staff costs, taxes, and most importantly my time to resolve issues. A weekly simple large yacht costs millions of rubles.
For example, someone bought horses, think this is a good investment or not? He uses them 4 times a year, while they eat while he sleeps.
There are three levels of financial freedom.
- First, financial security, when basic needs are covered from passive income.
- The second level is financial independence, when a person may not work, cover all the needs of himself and his family.
- And the third level, financial freedom, is when the lifestyle of my dreams is covered without my activity.
How do you understand that you are rich and have reached the third level? Wealth is a product of the mind; no number will ever make a person rich. Only the mind. And everything else in the world today can be rented when you need it.