How money works

April 1, 2013 | By More

Get to know the money game

I like again to start with a question or quote. We all heard before that it is easier to spend money than to make it and once we make it its harder to keep it or grow it.

This is a one of these topics which similar to entrepreneurship you cannot learn in school, even How money worksthough the formula to follow is very simple. In order for you to grow money, you have to reinvest what you make or at least a part of it. Simply said you make a dollar and invest it, you earn interest on that dollar, now instead of spending the interest, you reinvest the initial amount plus the interest, that is called compounding interest. Even though that is a term you for sure did learn in school, many just can’t get it going. In this article I therefore want to give you some ideas on how to get out of this rat race and how you can get ahead of the game.

If you have followed this blog you probably heart me saying before that a lot of your success will depend on the meaning you give to events happen to you and of course your believe system. The same applies to money, if you believe for some reason that money is hard to earn, than you will fulfill your own prophecy and it will always be hard for you. On the other hand if you make money, but you are scared of losing it, than there is a high possibility that you will lose it.

Positive thinking and knowing how to make money is not enough in order to keep it. You thoughts have to be in alignment with your believes and emotions. Now you have created the best presupposition to keep growing your wealth. If you combine this with the consistent application (action) of what you know you must do with your money to grow it, than you produced the best basis to keep it.

Let’s define wealth for a moment, as being wealthy for the one person does not mean the same for the other. I define being independently wealthy if one has enough constant passive income that all bills are covered without having to physically work for it anymore. Now you could do that with two thousand dollars a month or twenty thousand or two hundred thousand, very much depending on what you want to have or what kind of life style you want to live.

“The wealthiest man is not the one who has the most, but who needs the least” While this quote is meant to make you think, it completely depends on you how much you desire and need. Following some ideas how to create financial independence.


  1. It takes time

    Problem is, people spend a lot of time finding shortcuts and after ten years not finding the shortcut realize that it takes ten years to create in the first place. There is no shortcut, money works like a tree, you plant a seed (one dollar) you add water, sun, oxygen and while you do that day in and day out , the tree will grow, slowly but steady. If for some time you do not add the water or sun or oxygen, the tree might stop growing or in the worst case scenario die. Same happens to your wealth creation, you stop adding on one of the ingredients and your income will stop or you will lose it.

    Take your money or portion of it and invest it with interest or return, than reinvest the money and the interest, multiply this with time and you have created an ever growing money machine.


  2. Live below your means

    What many do not realize is that there are a lot of millionaires living right next to you, they look and dress like you, they drive an old car, they live in a reasonable neighborhood and they do seem like the regular middle income person. In reality they just spent less money than they make and invest the difference. That way, instead of diminishing there capital, they actually add on to it, additionally they earn interest or passive income on their investment.


  3. Plan for your wealth

    If you never write down how you want to accomplish your goals, there is a high possibility that you never accomplish them. The same applies to wealth creation, you need to make a plan and take action on it consistently.

    1. Your security bucket

      have  six times your monthly income in your savings account to be able to absorb hardship situations like losing your job, sickness, car accident, hospital bills, etc.

    2. The investment bucket

      Take a percentage of your income and invest it like described before, every month consistently, reinvest the interest.

    3. Charity bucket

      There is barely a wealthy person who does not contribute to charity, make it a habit to give away a portion of your income without expecting anything back.

    4. Pleasure bucket

      If you choose to have a bucket for pleasure travel and entertainment, put this one last. This is just money you can blow any way you want to, without having a bad conscience. Most people just take the whole amount of money they make and spent it for non-capital building toys and entertainment.


  1. Built a business

    One of the best ways to create a sustaining passive income is by building a business for yourself, regardless if you start doing it part time or if you find an investor to jump in with full throttle. Having your own business is not only rewarding, but if you do it the right way, creates a lifelong passive income stream.


  1. Diversify

    Do not put all your money in one basket, you might do it at a certain time, but see that you can create multiple channels of income. That way you are spreading your risk and in case of a weakening economy you will be able to concentrate on the income which works best for you without having to fear that you have to go out of business or to lose all of your investment.


  1. Love what you do

    Whatever you do for making money, love it and be passionate about it. It is much easier to attract money if you do it with something you have a god given talent for, something what you could do the whole day effortlessly. That way you won’t give up easily, even if you seem to fail, you will try again until success will be yours.


Do not become a slave to money, do not fear, do not stop creating what you are entitled to have. Create positive and happy thoughts combined with unwavering believe and consistent action and you will succeed there is no doubt! Money is an energy nothing else, tune into the same frequency to attract it and influence it, but do not give money the power to enslave you.

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