My nephew asked me once, “What’s the best way to invest your money?” I’m not sure that my response was a surprise to him, though. I’m a big fan of asking, “What do you want out of life?” Once you know that part, you can put your time and money into achieving it.
Now, Jim Rohn (always quoted on this site) said, ‘Work hard at your job and you can make a living. Work hard on yourself and you can make a fortune.’ So I think when we look out how to invest our money, we should first consider ourselves and, also consider our time.
The Paradoxical Theory of Abundance
As I thought a little more on how to best invest time and money I realized something that has always been true for me. I make a lot of purchase (spending) decisions based on value. And, not only immediate value but value over time.
So when it comes to how to invest, I believe this.
You should spend more on production than consumption.
We should focus on putting more resources (time and money) toward things that create goods or resources than we do on consuming goods or resources; the paradox of abundance.
Further, when budgeting our spending on consumable things, we should balance it against what we invest on goods or resources that produce.
What does that mean???
If your investment spending on production is $100 your consumption spending should be limited to $100. When you want to spend more on consumption, find ways to invest wisely on production.
I’ll give you an example:
I enjoy pizza; a lot. I can easily spend $15 each week to have pizza every Friday but at the end of the year I will have spent $780 on pizza and have nothing but an extra 15 pounds to show for it. Imagine if I took that same $15 every week and spent it on piano lessons, or a gym membership, or a certification class, or stocks… all of those investments produce goods or resources; I learn to play the piano and get better every week, lose 15 pounds instead of gain it (or break even), gain certification and increase my value and employability, watch my money grow in stocks.
The secret that rich people know about investments
Because being rich is simply having an abundance, we should probably spend more on creating abundance. The rich know this. Most rich folks, even if not attentive to it, spend more time and money on creating an abundance than the do on consuming their stockpile. We have all seen the guy or girl we know has plenty of money but drives that old car. I’m fairly certain we have seen those old cars parked in the driveway of huge homes too. The reason
Most rich folks, even if not attentive to it, spend more time and money on creating an abundance than the do on consuming their stockpile. We have all seen the guy or girl we know has plenty of money but drives that old car. I’m fairly certain we have seen those old cars parked in the driveway of huge homes too. The reason, homes go up in value (production of abundance) while cars generally go down (consumption).
So what should I invest in?
The best way to invest your money or time is in things that create more goods and resources. Because we all live different lifestyles, our resources may sometimes be different. What we view as an asset may be very different based on the way we generate income or how we create resources.
Practical ideas to invest your time and money
Before I spend $50 on playing golf (consumption) I spend $50 on advertising Selfiepreneur (production).
Before my son plays Minecraft for 30 minutes he has to read out loud for 30 minutes (he’s 6).
Before you spend money on new running shoes (consumable resource) consider investing in a running coach (more value over time)
Sometimes the difference is subtle and requires a look at value now versus value over time. I have found that a lot of people that want to start a business get this confused too. They want to get business cards and a fancy website before they get customers. We are going to discuss that and some of the right things to do when starting a business in a couple weeks. Subscribe to the email list to make sure you don’t miss it.
We are going to discuss that and some of the right things to do when starting a business in a couple weeks.
Subscribe to the email list to make sure you don’t miss it.
The best way to invest your money or time is this. Limit your spending on things that don’t create abundance by the investment you make on things that do.
Don’t always look to just find a good stock to put your money in. The best stock is you. The best investment is in you.
And, while I know it sounds cliche and leaves a little to the imagination, invest in things that grow as a way of life.
Make investment a habit instead of an activity.
Let’s be better; together.