Make 10x More Money By Diving Your Income Like This

Domagoj Vidovic

Photo by Alev Takil on Unsplash

Many people complain about the money, even though they’ve never actually tried to understand it. It’s often the case that something bugs us in our lives just because we don’t have enough knowledge to understand it.

Money can be visualized perfectly with mathematics; it can be observed directly as numbers. It gives us the power to understand it better, leading us to abundance — all of that without making your income bigger.

Yes, I’ve just said that. You can have 10x more money without making your income bigger. Let’s see how.

X = Income - Expenses

It doesn’t matter if you have multiple income streams or just one — their total sum adds up to the total income.

All of your spendings sums up the total expenses. Quite straight forward.

What matters the most is what you do with the amount you got left. What’s your X?

The biggest problem lies in the fact that most people say that they’ll save or invest the amount that’s left at the end of the month. An even bigger problem is that they spend all of the money on something that doesn’t make their income bigger — they just get pocket money from their employer, spend it on essentials and useless things, and the same story’s going on every month.

At the end of the month, their X is 0. They don’t have any plan nor knowledge about money, so it just goes as it comes.

50/30/20 Principle

They are many essentials you just have to spend your money on. The rent, taxes, bills, food, etc. We can call them existential needs — you can’t survive in a civilized world without them. You should spend 50% of your income on them.

Another bucket that exists is the luxuries — going out, fancy clothes, whatever makes you happy. You should spend 30% of your income on them.

The key to success and wealth lies in the remaining 20%.

That part should be spent on something that gives real value to your life — you should invest it wisely. Those can be material things that create the money for you; your other sources of income, such as stocks, cryptocurrencies, gold, real estate, online businesses, etc. The most important rule about it is:

Invest your money in something you’re an expert at. Otherwise it’s just gambling — the easiest way to lose money. If you’re not an expert at anything, find something you love — and learn the hell out if it.

Besides material things, you need to invest money in your mind. It’s your most valuable tool which will solve any challenge you throw at him. To do so, your mind must be packed with knowledge. That includes books, courses, coaches, therapists, etc.

Those investments are long-term, but they will give you the biggest return value. Besides the material goods, it will also provide you with extreme fulfillment; making your life way more joyful.

Pay Yourself First

People usually unconsciously live by the 50/50 principle, where they spend half of their income on the essentials and another half on luxuries. There’s no money left for investment in their minds or assets, and as a consequence — their life remains the same. 0% “wisely” invested every month — gives you 0 as a result.

There’s a simple solution to this problem — pay yourself first. Spend this 20% bucket on the first day of your paycheck; whatever you do with the rest doesn’t matter, because you’ve already invested in something that will give you more value.

Even after only a couple of months, that 20% will create a huge amount of money, happiness, and fulfillment. 20% will be bigger every month because your income will increase on a monthly basis. After a few years of stacking — you’ll have a real fortune.

What If Your Essential Expenses Are More Than 50%?

There’s a solution to that. 50/30/20 is an ideal principle — you might have to take a few more steps to be able to do so.

There are 2 reasons for that:

  1. You’re spending too much on luxuries
  2. Your income is just too low

There is a simple solution for the first case — define your priorities. No, you don’t need to have the latest iPhone, go to expensive restaurants, and drink coffee to go every day. Even if you spend 70% of your income on the essentials, you can spend 15% on the luxuries, and invest 15% in yourself.

After some time, those investments will start to make huge returns, and you’ll be able to live according to the 50/30/20 principle.

The other case can’t be solved so quickly, but it is possible. Let’s say you spend 100% of your income on the essentials — you barely make it from month to month.

You can do 2 things — try to make your essential spendings lower, or create another income stream.

You have to work hard for that. But you’re probably working hard right now, and you can say there’s not a lot of fruit coming from it. It’s time to change the strategy.

Your life should be a unique, amazing journey, and you have the power to make it so. It will be hard anyway.

The most successful people in the work have the exact amount of time as everybody else. They choose to spend their time wisely — thinking long-term; anything that will bring them positive results.

Unsuccessful people create nothing out of their time, leading them to no results. Time is your most valuable asset, and you should spend it wisely. Just give it a try, what can you lose?

You’ll be gone from this world in a few decades either way. And one thing is sure — you will regret not trying.

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