Everybody wants to make a quick buck. But the irony of life is that those who want to make money the fast and easy way almost always end up at the bottom of the wealth ladder. Many concepts or ideas that are advertised as making you quick easy money such as the lottery and gambling are only there to take your money whilst still keeping you with a lingering interest so that you can try that ‘one more time.’ The problems with things such as the lottery which promises you obscene amounts of money the quick and easy way is that the odds of you winning suck. Have you ever heard of s a gambler who is a consistent long term winner? My point exactly.
Even when it comes to investing those who want it easy can often end up losing the most. Investors who want to become millionaires overnight through penny trading are often the worst culprits. Just look at the what happened to the investors of GTAT who thought they and hit the jackpot and started buy stocks in the company on margin. When the company went under, it left many people with amounts they couldn’t pay back.
The mutual fund industry is another example of this. By taking the ‘easy’ route and simply investing via a mutual fund can cost you a lot of money via fees. What’s even worse is that some people pay financial advisors to look after their portfolios. These financial advisors in turn simply stuff the amounts they are given to manage into mutual funds. This hits the investor with double charges and could decimate the returns they get.
When it comes to investing, a far more efficient and effective method is to simply put their money in index funds. All they need to do is take an hour or two to read about index funds and see how there passivity leads to great returns. By simply investing in an index fund as apposed to paying a financial advisor, you can get save on a bunch of fees and get higher returns as a result. By investing via an index fund, you are challenging yourself to take control of YOUR nest egg and can get better returns as a result.
That’s it, if you want to make more money, you need to challenge yourself.
If you study history and study the people that have made their own millions, they all had this one trait of challenging themselves in common. To make money, you need to do difficult as opposed to doing something easy. If it was easy, everybody would do it and everyone would be wealthy.
Look at a few examples on easy vs difficult money.
As mentioned above, when it comes to investing, people think they can make easy money by simply trading penny stocks or buying into mutual funds. But the truth is, these people will often have lower returns that people who do the challenging things – regularly investing money into an index fund or dividend paying stocks over the long term.
When it comes to property, the easy money is attained by simply flipping properties. But these people often get burned once the market turned. To build long term wealth via property, you need a portfolio of development properties that you have bought below market value and you create value via renovations and uplift of the property. If you really want ti challenge yourself, don’t be seduced by the profits of flipping a house but instead keep them for the rents they provide.
When it comes to work or a job, the easy money is being a security guard or a store clerk. It is far more difficult to go out there and train for 7 years to become a doctor. This is why Doctors have a far higher pay then a security guard as they have challenged yourself.
So the next time you think about making money, ask yourself the question ‘ is it challenging?’. If something is easy, it means that they are many people doing it and it probably is not that challenging. If on the other hand you sold a difficult problem and challenge yourself to do what no one else is doing, you can make more money than you can imagine.