Monday, August 20, 2007

Becoming Rich From Nothing Theory

  1. First step is to buy the cheapest household item that is most effective at cutting expenses from bills at the end of the month.
  2. Second is with the money that you are saving at the end of each month, you buy the 2nd cheapest item that will save the second most money at the end of the month.
  3. 3rd just continue doing the same until you have all of the items possible that can save any money at all at the end of the month.
  4. 4th , with all of the money that you are saving at the end of each month you can now save it and put it into an interest earning account and that can pay for all of the other monthly bills that are monopolies (like phone bill and taxes) or that are manufactured items that need replacing(such as light bulbs /paper products /flash memory cards)
  5. 5th is now that you are saving 100% of the money that you earn each month you can finally invest it by buying a product and renting it out or buying a product that you can start some other buisiness with. Or you can just put it all into another interest earning account and never work again, wich would be my route.
  6. This all only works though if you have a steady reliable source of income. That can afford to invest in money saving items at all.

equation: cost to buy/amount saved per month

The only way that anyone ever got rich in the beginning was ownership of an item that nobody else could own, by either not being as lucky as you to have found the item or to have been able to afford it or to have been in the correct geographical location or to have been lucky enough to have thought of the business idea first.

So in the end to become rich you need to have 1 in a million luck or intelligence, and have the right to do whatever you want with the items you own(monopolies). Luck and ownership.

LATER ADDED: The best way to get rich is to buy a house and rent it out if you are living elsewhere. This creates equity. But to really live a wealthy lifestyle you need cash flow so that you can take out a loan on a bigger house with.
You can also buy a house to live in and then when you get equity in it, you can use that equity to move into another house that is a fixer upper, and then bring up to market value and then sell, and then get a bigger house that is under market value and refurbish it. And this is what is called the property ladder, and you will in theory eventually have a million$ house.

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