Money problems. We all have it. Money always seems to disappear out of our bank accounts faster than it comes in. We are always short of money and it is strange that when we are in this situation, we don’t ask the most obvious of questions: ‘why don’t we buy more money?’
I know what you are thinking. The thought of buying more money is absurd, crazy and I am completely out of my mind for suggesting this. But truth be told, if you change your mindset about money and understand how it really works, you can achieve the feat of buying more money.
Most people think that money is this weird intangible thing. It simply passes in and out of a bank account. Heck I used to think this way. Any money that came in to my account was simply spent right away. I never considered keeping any of it, or using it to earn more money. I only understood it as something that you received in exchange for working. And the moment I learnt it, it was already spent. So the routine in essence was work, earn and spend. There never seemed to be any money left over at the end of the month. So this got me thinking, like everything else, what if ‘I could buy money?’.
This was in essence the catalysts that changed my mindset regarding money. I realised that money is a tool that can either be spent or saved. If you spent money it would be gone forever but if you saved and invested that money, it would grow over time and you can essentially buy yourself money.
Cash, like a person, is a living thing. When you wake up in the morning and go to work, you are selling a product – yourself (or more specifically, your labor). When you realise that every morning your assets wake up and have the same potential to work as you do, you unlock a powerful key in your life. Each Pound(£) you invest is like an employee.
Over the course of time, the goal is to make your employees work hard, and eventually, they will make enough money to hire more workers (cash). When you have become truly successful, you no longer have to sell your own labor, but can live off of the labor of your assets.
This in essence is why I began to buy dividend paying shares. By investing in dividend paying shares, you can collect a stream of future cash-flows and you have essentially bought yourself more money. For example, lets say you invest £1,000 in Shell Stock (RDSB) and get 60 shares. Every year, Shell pays a dividend and for your 60 shares you got about £75 in 2014, £75 in 2015 and you should get £75 in 2016. You get this money all whilst holding on to your 60 stocks in Shell. By doing this, you have essentially bought yourself more money. You would have £225 (all dividend payments) that you would never have had before. How sweet is that!
And it doesn’t just have to be dividend paying shares. You can invest money in a range of different asset classes from property to bonds to stocks in public or private companies. The point is that you need your cash to move in order to make more money. Once you are able to change your mindset and grasp the concept of using money to buy more money, you will truly be on your way to building long term wealth.
This is what investing basically is, buying more future money with money today. No other thing grows quite like money. If you have a car, it won’t grow another car next year, it will still be one car in a years time. The same goes with clothes, gadgets and the countless other things you waste your money on. Money on the other hand has this unique ability to grow on your behalf. Once you understand how money works, you can deploy it to bring even more money for you. So if you want to buy more money, you know what to do!