Today’s Blunder: “We expected society to take care of us and tell us what to do and when to do it. We should have taken control earlier!”
We’re in our mid 30’s and we had only heard of the term “Financial Intelligence” a couple of months ago. Our focus had been on the classical way of thinking around finance and we made plenty of blunders due to that mindset.
All that has changed.
It feels like we’ve shifted from seeing money as an evil necessity to understanding what the role of money is in the world. “Make money work for you” is a sentence we had not heard before and now embrace. It has also opened up the idea that we should think of retirement not as a moment in time when someone tells you to stop working, but a moment in time that we decide that we do not want to work for money, but work because we are passionate about it. If only we had understood it sooner, we would have progressed much further. Nevertheless, today is good moment to start.
How did we learn this lesson? We were browsing the internet and came across a couple of website on this topic. In addition, during a long car ride, one of us listened to the audiobook of “Rich dad, Poor dad” by Robert T. Kiyosaki. If you have not read or listened to it yet, do it today and hopefully it will change your life as well. Since then we have read many money websites and books around the topic and we will be sharing those with you.
We have also learned that there are plenty of methods to make money work for us. Examples that are well known are:
- Rental Real estate
- Own Intellectual Property (IP)
- Own copyrighted material (e.g. Music)
- Equity (e.g. stocks and shares)
- Provide loans
- And plenty more…
We will be investigating Stocks and shares initially, potentially expanding into other areas as we progress. Mainly we are interested in dividend investing, which is a field we believe fits our personal situation today.
Rental property requires some attention, even if you hire an agency, which we would rather spend with the family. In addition, it has a low level of liquidity, meaning if we need cash, it will take months/year to sell the property and raise the capital.
At the moment, we do not have a creative or innovative ideas to patent or copyright, this might change going forward. Given the current markets, bonds are an investment class we believe are not the most attractive investment due to the rent percentages today.
Given all the websites where you can provide personal loans to individuals, you would expect that it would be an option we would look into. Given the higher amount of risk and limited interaction with the individual receiving the loan, we would rather invest in a public company that we can assess and monitor.
Investing in equity will provide us full flexibility, give us a return which is higher than the interest collected at the bank and provide liquidity (the able to change to cash) in a very quick way (under 3 days). We will track our progress and also move over capital to other methods of making money work for us.
As always, we’ll share with you what our mistakes are during our journey so hopefully you will not make them.
Which sentence has inspired you? And is your money working for you? Please do comment below.