“When you keep trading your time for money, you’ll never truly be free.”

How To Delay Gratification

When you’d give a random set of people $10,000, most of them will spend the money within a few weeks. They’d give in to instant gratification.

But a few people will think about how to use the $10,000 to make life for their future self better:

They would invest it in stocks
They would use it to pay off high-interest debt
They would use it to build their emergency fund
They would invest it in their business
They would invest it in improving their skills
In other words, financially smart people use today’s income to make the life of their future self better. They think long-term.

But most people want those designer shoes now, the brand new car now, and the latest iPhone now. They think short-term, which keeps them stuck in a financial rat race.

Use today’s income to make your future life better — not to satisfy every impulse right now.

Make financial decisions that pay off in the long term.

As Warren Buffet famously said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

Read also: How to ferociously increase your net worth to become rich

How To Make Passive Income

School doesn’t teach you it’s possible to make money while you sleep. They don’t talk about passive income. All they teach is how to get a job and trade your time for money.

But if you want to achieve financial freedom, you’ll need to learn how to make passive income — whether it’s through stocks, real estate, or your own business.

As Tony Robbins said in Money: Master The Game, “You have to move from just working for money to a world where money works for you.”

When you keep trading your time for money, you’ll never truly be free.

You’ll need to generate passive income by letting your money (or business) work for you.

But don’t get me wrong, passive income requires a lot of upfront work. It requires effort, focus, and self-discipline:

To make passive income with your business, you first need to spend months/years building it (you have to work on your business first before it works for you)
To make passive income from stocks (dividends), you first need to work to generate investment capital
To earn passive income from real estate, you first need to put in the effort to acquire real estate
Although passive income requires hard work upfront, it provides freedom once set up.

To quote Warren Buffett once more, “If you don’t find a way to make money while you sleep, you will work until you die.”

How To Increase Your Value

The most successful people keep investing in themselves — their skillset, network, and knowledge.

When you invest in yourself, you gain more skills and knowledge. The more skills you gain, the more valuable you become to the marketplace.

And the more valuable you become to the marketplace, the more money you can make.

That’s why entrepreneur Alex Hormozi said in his book $100M Offers to “invest in the S&Me 500 instead of the S&P 500.”

And although I think you should do both, he has a great point.

Whether through books, courses, mentorship, or coaching, investing in yourself is one of the highest ROI investments.

The more high-value skills you stack, the easier it becomes to generate a lot of income.

How To Build a Business

Building your own business is one of the best opportunity-vehicles to generate wealth.

Most jobs keep you tied to a certain level of income, but owning a business removes the income ceiling. This allows you to make far more money than you could ever make in most jobs.

No wonder the majority of the wealthiest people in the world are entrepreneurs and business owners.

But make no mistake, building a business isn’t all fun and games.

Many social media business ‘gurus’ want to make you believe it’s easy to make six figures a year with your own business. I can tell you from seven years of hands-on experience that it’s not easy.

Yes, starting a business is easy, but building it is not. Anyone can start a business — not anyone can build a business.

Entrepreneurship requires a certain type of grit and mental strength. It’s not for everyone.

But if you’re up for it, building your own business can be a massive opportunity vehicle to generate wealth and reach financial freedom.

If you’re interested in starting your own business, here are some of the most important entrepreneurship lessons I’ve learned:

Design your business so it can one day operate without your active involvement (this turns it into a passive income stream)
Don’t create a product without testing if there’s demand for it
Learn marketing (or hire a great marketer) if you want to run a successful business
Just get started and don’t wait until ‘it’s the right time’ to start a business — because it’s never the right time

Read also: 7 habits you can quit today to become extremely productive

How To Use Compound Interest To Your Advantage

Compound interest is one of the most powerful concepts in life. As Albert Einstein once said, “Compound interest is the eighth wonder of the world.”

Yet it’s something most people never get taught.

Once I understood the power of compound interest, I started making better financial decisions.

Compound interest means you earn interest on already earned interest.

It’s exponential growth.

Even small amounts of money can turn into life-changing amounts when compounded over a long enough timeframe.

For example, if you invest $250 per month at a 10.2% annual return (the average return of the S&P 500 over the past 60 years), here’s what you would end up with:

Year 5: $19,877
Year 10: $52,492
Year 20: $196,747
Year 30: $595,073
Year 40: $1,694,957
Year 50: $4,732,030
Year 60: $13,118,198
This is what the power of compound interest can do for you even if you’d invest only $250 per month.

And although it’s not the fastest way to generate wealth (building your own business is), it’s one of the surest ways to generate wealth.

CONTRIBUTED BY Jari Roomer

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