My relationship with the world of personal finance began with the book “Rich Dad, Poor Dad”. I do not share all of the author’s ideas but I do share those you find in this book. These are basic and common sense concepts, but they completely changed the chip. 18 months after reading the book, we bought the first floor. Today we have three apartments in Spain financed by mortgages but which generate a small positive cash flow each month.
Net worth is not something I did right away. It took me a lot longer to get to this point. In fact, I’ve been doing this for a little over 13 months. It was worth it.
Having a number every month motivates you to go in the right direction
Calculating my net worth (or rather that of my wife and mine) has been one of the key factors in increasing it from month to month. If you know that you are losing in equity, you have the urgency to act. If you see it go up, you want to make it go up. If you don’t do this tracking, this effect is completely lost.
It also helped me create reservations and set aside money for travel, taxes, and contingencies. My goal is to create a cushion for myself and my businesses so that I can survive without an income for a while without having to throw someone from the team out on the street. Lean cows will come back and you have to prepare for it.
Find new and better sources of income
It’s funny, but since I started recording net worth every month, I have also seen my income increase. You could say it was / is kind of a game to see how far you can go. To go faster than the others, it is also necessary to open up more and better sources of income than the others. If you read this blog frequently, you already know mine. I don’t have just one but several. Also, I still intend to have a Plan B and C. The last few weeks I have been a little relaxed and I need to have more batteries in this aspect because I am relaxing too much. When things are good, they can be better. It’s the attitude that helped me get here and that I have to come back to.
Have less costs than the average
When you increase your income, it’s easy to be tempted to spend more. Someone who tells you so tells you and makes this mistake. It is also true that the old sofa was already 15 years old and the TV which had just broken even more. In this case, my wife and I did not go with the cheapest option to replace them. In fact, we had wanted to buy a sofa with more space for over a year so that we could now comfortably seat five of us. The little ones are not so small anymore, and those who have children at home know that a child can easily occupy 2-3 space of its volume in cubic meters. They have a talent in this regard. Other than that, we live a modest life: rental house, Kia Carens 5 years, etc. Of course, the Netflix subscription is not taken away from anyone.
Reinvest better than average
Every now and then I sign up for webinars that they promote on YouTube. I saw one the other day on how the rich invest versus the poor or something similar. It’s curious that sales strategies haven’t changed much in recent years: advertising, landing, webinar, and emails.
What I was going. One of the things that stood out was that “a rich man” didn’t have his money in the bank. A basic aspect which is not a big problem for the majority of Spaniards, so I understand that it is more of a problem for the Germans since compared to us they are a more thrifty people. As investment options, he presented art and land with trees since the price of wood had recently exploded.
In this aspect, I saw myself reflected. In October of last year, I had more than one argument with my wife over wanting to reinvest virtually all of the available capital in the product for Christmas. Logically, he thought I was crazy because once you have money in the bank, you don’t want to see it come out. Looking back was worth it because the investment was well made. I knew it would be. I have been selling on Amazon for years and the only thing missing was capital to make a profit. I wasn’t going to stand still now that I finally had the chance to exploit this asset.
One thing I noticed is that the biggest increase in our net worth has happened in the past six months. In the first half, it was rather slow compared to now when he was accelerating. All you have to do is continue on this path. In the past, one of the mistakes I made was to change course when things were going well because I was bored of what I was doing. I hope this time I don’t make the same mistake.