When asked, most of us will be looking for the best way to become wealthy in order to live a comfortable life. But what do most people do? – Nothing.
People tend to dream for a comfortable life and wait to get “Lucky” in life. But unless we give our life opportunity to get “Lucky”, it will most likely never happen.
The fundamental that everyone can do to boost their wealth is focusing on Cash Flow, the simple equation of spending versus earning.
In other words, like i mention again and again, you need to spend less than you earn.
Once you have the ability to spend less than you earn from your after-tax earnings, you will have some cash to invest to give yourself chances to get “Lucky”.
If you spend all your earnings, there will be nothing left to invest. This is what most people says living from paycheck to paycheck.
There is a big difference between saving $5000 a year and $10000 a year or even $20000 a year. Someone with $5000 a year saving will have to be a highly skilled investor in order to keep up with someone who can save $10000 or $20000 a year.
Which person will generate wealth quicker? someone who earns $100,000 a year and spend $95,000 or someone who earns 60,000 a year and only spends $50,000?
You got that right! over a period of time, the lower spending individual will actually retire earlier because he or she would only need less wealth to support the expenses.
In saying that, it doesn’t mean that you do not spend your dollars at all. The idea is to spend less than you earn on necessities and things that make you truly happy.
Once you have mastered this new habit of spending less than you earn, you can focus on earning good returns by investing in quality and make the dollars work for you.