Put your money to work to create more wealth

7 months ago JCprojectfreedom 0

Do you want to put your money in motion to create more wealth for you? Do you remember the formula of Momentum in your high school? I am going to apply this formula into how you can use Momentum to create your autopilot wealth machine to achieve financial freedom.

Momentum = Mass x Velocity

Mass is equivalent to your liquid assets

Velocity is speed of money

In order to increase your net worth, you need to increase the above two factors.  You can either increase your Mass or increase the Velocity. It will be ideal if you can do both. This principle helps you to do more than one thing at one time with your money.

So how do we put money into motion? For example, you deposit $10,000 in a bank and the bank pays you an interest on your deposit for 2%, you will receive $200. The bank will use the $10,000 and lend it out at an higher interest rate to a business man for 8% and make the difference of 6%.  This shows a very simplified banking system. If you can get your money to flip over and over again, or in other words do more things at the same time, you can make higher rate of return with the sum of money.

I will show you an example of how more than money can put into motion to create more income. For example, a listed company which sells shares to the public, uses the money raised from shares to acquire machinery, creating products and sell them for profit. This process is repeated many times to create additional wealth.

It will be difficult for people to appreciate this idea of making your money to do more than one thing at a time when you are living from paycheck to paycheck. I always tell myself that the family needs to stop spending extra money on consumable goods and think of this money can be used to make a profit. It is important to resist unnecessary spending on consumable goods and depreciating items.

1. Think of a business idea, turn a profit again and again using this idea.

When you have a business idea which pops up, write it down, think through how can you profit from this idea and execute the business plan. This single idea can help to generate profit and keeps selling for itself.

2. Rental income from your property

Rent out a space and make a profit from existing asset.

3. Use your talent to reward you again and again.

We have skills we use to make us money, you can  become a freelancer during your free time to increase your income. As you become more skilled, your rate will increase as well.

4. Use technology 

The web and technology can be used to create websites which can reach millions, software to solve issues and apps to make other lives better. By helping more people to solve their problems, you will create more wealth for yourself.

Continuously Create more Wealth

With skill, talent, money and knowledge, you can create an autopilot wealth machine.  Many people including myself fail to use existing resources to create more  wealth and continue to fall into a vicious cycle of finding another better job. Remember you are not working to make money, you are putting your money to work harder for you!

How you can sabotage your own wealth?

  1. Use all your income on depreciating items
  2. Do not have savings or emergency funds
  3. Do not understand the legal implications when signing a contract
  4. Pay more money in tax expense
  5. Do not have discipline to pay off debt and use it for impulsive buys on consumable products or branded products
  6. Do not organize your wealth and assets
  7. Do not have a vision for a future you
  8. Sit on money and resources and do not put them to work for you

Take time to evaluate what you have in terms of assets, talents and skills. Pick one of the resources and think of how to generate more wealth!