How to make money work for you

How to make money work for you

We all‘ve been worried about money, its management, sources and how to multiply our money. Though in this process we might end up in a rat trap of losing money by paying debts but still we ought to take that risk so as to pay our monthly bills, taxes and live a peaceful & happy life. But have you ever thought of the fact why rich get richer and poor get poorer? Well if no let me tell you the answer which lies around us, yes, it is basically due to the lack of financial literacy. If we dig deeper into this, we can find out that the root cause of this financial illiteracy is due to myriad curriculum of our education system which focuses upon working for money rather than letting money work for us.

So, the question here is how a person can learn financial literacy? Well for learning financial literacy one must know the basics of finance, having that much conceptual clarity is more than enough to make money work for us. So, let’s learn the basic of finance in my way. Today, most of finance is all about asset, liabilities, income and expenses. Learning how to differentiate among assets and liabilities will certainly help us in this context. Firstly, Assets are the things that generate income and liabilities are things which takes our income away from us. Secondly, a person’s balance sheet comprises of income and expenses. In order to make money work for us we need to understand this first. Anything that we earn is our income and whatever we purchase from this income is an expense.

So, to make money work for us we first need to invest a part of income in our asset column. Reason being it is the asset column which will generate dividends that will add up to our income column. Meanwhile we increase our asset column we then able to pay for our expenses and the leftover amount will be again invested into asset column. This process will help to increase asset column and in the meantime it will reduce the liability column. Ultimately, this will lead you to a situation where even if you don’t work your money will work for yourself. This is what financial literacy is all about. Though one might think it is very easy to achieve this, but to be honest this is a difficult task which require lot of knowledge, patience and discipline.

One might wonder how to increase our asset column? The answer is simple by investing in long term assets like house, shares etc. but my personal favourite is house, the reason I say this is because real estate is one such sector that is capable of generating multiplied returns if you have the right knowledge about the domain. Though, there are certain risk associated with this sector but still investing on a property in an ideal location is the best thing you can do to make money work for you. One of the best examples of such investment is Mc Donald’s, for world they are into hamburger selling business but for them, they are actually into real estate business. Look at different Mc Donald’s outlets across the world all of them are located in an ideal location and they were able to do this by selling franchise to the real estate owners across the world which makes them world’s largest owner of real estate under a brand name.

So, one might ask how a common man can go about investing in real estate and finding the right deal at the right price? For this there are couple of real estate consulting companies which specialises in this sector. Their intense research about market, location, price etc. enable us to make informed decision while investing in the same. They provide us the right information that is needed for investment planning, execution and research. In a nutshell they help us to better utilize our resources so that we can get maximum benefit out of it.