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Every year, more and more people are learning the benefits of investing.
They’re beginning to understand that they can never build true wealth, if they do not put their resources to work for them in a way that pushes them further towards their financial goals.
After all, it was legendary investor Warren Buffet that once said, “If you don’t find a way to make money while you sleep, you will work until you die.”
We know this is true, but step back and ask yourself something. What if you’re not even following the right strategy to build long-term financial stability? What if the investments aren’t aligned with your goals? What if you feel like you’re doing everything you supposed to, but you find out years from now it was all wrong?
This is the case for millions of people, and they don’t even know it yet.
Be Careful Who You Get Your Advice From
As more and more people have shown willingness to invest their money, there has also been an influx of unethical scammers, looking to capitalize on people’s desire to secure their financial future.
They reel you win with “surefire business ideas”, “Forex trading systems guaranteed to earn you profit on autopilot”, or more trendy right now, “bitcoin investment schemes.”
These are all garbage, and you have to wonder why these people are spending their energy pushing these heaping piles of junk, when they could be actually using these programs that they claim are so great.
In this article, I’m going to share with you the only real investment strategy worth paying attention to. I’m not going to tell you to buy into some $2,000 course, or learn to pick stocks, or god forbid, start buying bitcoin. I’m not going to talk about Forex, get you to buy into a group investment fund, or recruit you into an MLM.
What I will do however is tell you about strategies that are going to help you in the long-term. They’re not going to make you rich any time soon, but they will provide you the best returns that you can possibly get, and create a foundation for you to become someone truly wealthy in the future.
I am a huge fan of investing in stocks, bonds, and real estate – but only when the time is right.
The truth is, if you only have a little bit of money, it doesn’t matter how good the stocks are – you’re only going to be making a little bit.
If the stock market returns an average of 10% a year, you’re only earning $500 that first year, $550 the next, and so on.
That’s still great, and certainly better than nothing, but it’s very slow – too slow. Especially as you no longer have that $5,000 to put to work in other areas.
In the beginning, it makes the most sense to put money in to what offers a higher return more quickly, so you can begin reinvesting that money going forward, and scaling your returns even further.
Therefore, as tempting as it may seem, I recommend against investing in the stock market if you only have a little bit of money to work with, and focus on it again later.
The Ultimate Investing Strategy
It’s important for me to lay out the strategy in advance, so you can understand the context of it going forward. This is the strategy every single wealthy individual used to earn their fortune, and it is the same one you need to follow if your goal is to achieve similar levels of success.
The first part of the strategy is to find your purpose – something that would drive you to do lots of work, with a smile on your face. What you care about so much, you’d work overtime to further move yourself towards that goal.
Then, you’re going make investments in yourself. Moving towards that purpose. Getting better at your craft, scaling your earnings, becoming more valuable in the marketplace.
Next, you’re going to do one of two things. You’re going to learn to market your value and make more money from your career, or you’re going to start a business. Both can work well, and I’ll discuss both strategies.
Finally, you’re going to develop a financial framework that ensures your income continues to grow, and you invest the extra money you now have in a way that moves you towards financial security, independence, and true wealth.
Now, hear me out – that is just a very brief overview. The details here are what really matter, and I encourage you to listen to what I share with you with an open mind. It’s important to understand why these steps, and why this order. I’m also going to go into some very specific points that are critical to this strategy working.
1. Find Your Purpose
Wealth building is never easy, particularly if you want to enjoy it before you hit the traditional retirement age.
There’s a reason, after all, that most people are struggling to get by. It takes levels of work ethic, discipline, and patience that most people simply aren’t willing to put forward.
When you delve deep into how people spend their time, this makes sense – you can’t blame them for it. Most people are doing work they really don’t enjoy, so they can blow their money on the weekends making up for their dull, tedious life.
This is partly due to the need for excitement, and partly because it helps to justify their suffering during the work week.
Even worse however, these people often end up in a rut.
They come home from work so exhausted and mentally drained, they would rather relax and tune out, than spend even more of their time improving themselves and their situation.
However, it doesn’t matter what career field you work in – the people who are truly the best at what they do, are the ones that end up getting overpaid.
Depending on the role and the value it provides to an organization, being even 1% better at something can provide millions of dollars of additional value to the company.
Average employees are in high supply, and are paid accordingly.
When you find your purpose, the work that you look forward to every day, everything changes.
Not only do you have more money to invest because you’re so fulfilled from your work, but you’ll work longer hours without getting burned out, and give yourself the ability to become even better at it. You’re checked-in, you’re engaged, and self-improvement doesn’t become a chore – it becomes something you legitimately enjoy.
If it came down to it, I would bet on the 35-year-old counselor who had just found her passion for helping people, than the 35-year-old accountant who got into the field because 15 years ago, his parents pushed him into it. Every single time.
If you can’t make a career change because of your current life situation – bills, kids, obligations, and so on – don’t worry. This article will still take care of you. Let’s move on to the next step.
2. Invest In Yourself – Skilling Up
Remember, when you make more money, you can invest more money.
The first stage of your investment career should be entirely focused on increasing your income.
This is the surest, most quick way to begin improving your financial situation.
The truth is, nothing will give a bigger return to you than an investment in yourself. This could be picking up a collection of books, enrolling in some online courses, or attending conferences related to your work.
This is knowledge that can never be taken away from you. It never goes down in value, and you have it with you to work with for the entirety of your life.
It improves your baseline, the lowest you can possibly go. Regardless of what happens to you in life, you will always have that knowledge with you to help you bounce back.
This is why even though I now charge quite a bit for my time, I still make sure to go through books and courses very often. I believe that if I can learn even one thing from something like this, than that time and money is well worth it.
In fact, over time, this knowledge becomes even more valuable – you use and apply it over decades of your life, learning exactly how to make the most out of it for you. Those that become truly exceptional are the ones that end up making all the money, and this is certainly true for those that succeed in the competitive world of business.
Find that skill that aligns with your purpose, that skill that you can monetize, and go all in on it. Become a master. In the financial world, it’s not the jack of all trades who wins – it’s the master at few.
3. Scale Your Income
Once you’ve skilled up, you’re now at a position to scale your income. This can be done one of two ways – seeking a higher paying job, or starting a business venture that takes advantage of your expertise.
3A: The Job Route
If you go the job route, it should come to no surprise that you may have to switch companies. Regardless of your improvement, many organizations do not like to give out massive pay raises, and an incremental raise once a year isn’t going to scale your income to massive levels.
During this time, it’s recommended you skill up further. Books and courses on skills such as salesmanship, negotiation, and marketing yourself will help you demonstrate your value to a potential employer. You should familiarize yourself a bit with personal branding, and how to use LinkedIn to to appeal to recruiters.
This is a solid strategy, and there’s nothing wrong with preferring a high paying job over an entrepreneurial venture. You can still get rich with both, they just need different approaches.
I have never worked a corporate job, and want to be honest in saying I’m not the best person to give advice in this area. Therefore, when the time is right, I encourage you to research deeply on the topics just mentioned, and how to make career moves that are right for you. Just know that scaling your income is the next step in building wealth more quickly, and an investment in your career will still beat out any traditional investments.
3B: The Business Route
If you’re looking for something with a little bit more upside that is also less restrictive than a traditional job, consider starting a business.
This does not necessarily need to be something high-risk, nor something that requires a large upfront investment.
In fact, investment wise, I would encourage you to do the exact thing you did before – only this time, buying books and courses on topics like marketing, operations, and business strategy.
If you think about it, most businesses really don’t require that much money to start up.
Seeing as you’ve found your passion and become highly skilled in some area, why not start out by offering a service as a freelancer?
By pursuing this strategy, you’re essentially doing the same exact thing you do in your job anyway, only you can charge a higher rate, and turn down jobs that don’t interest you. You could even do this on the side while you continue working your regular job, until your business earnings are high enough for you to feel comfortable quitting.
See: Why I Recommend Freelancing As An Entrepreneur’s First Business
Of course, freelancing isn’t for everybody, and the type of business that will work best for you will depend heavily on your skills, expertise, goals, and values.
Still, this is the quickest way of all to build massive levels of wealth. Not required by any means, but every extremely rich person you know (that earned their fortune anyway), did so by either running a business, or investing in businesses.
4. Now It’s Time To Branch Out – And Work Towards Financial Independence
Only after you’ve done the prior three things should you start branching out, beginning investment into stocks, bonds, and real estate.
Even then, this is only because you’ve likely ran out of opportunities to invest in yourself, in your career, your business and so on. Another case may be that you’ve amassed such a large amount in your business, that you need to diversify for risk mitigation purposes.
Finally, you can begin your move towards true financial independence.
What Is ‘True Financial Independence’ Anyway?
You could be making a million dollars a year, and still not be financially independent.
Financial independence is a state in which your assets are generating a level of income that is higher than your cost of living. On their own, they are making more money than you need to fund your lifestyle, and you can comfortably retire if you wish to do so.
As you could imagine, there are two sides to this coin – the income from the assets, and your monthly expenses.
This means that to achieve financial independence more quickly, you need to do one of two things – make more investments that pay you passively (stocks, real estate, a business that doesn’t require your presence), OR, reduce your living expenses.
Both of these have their place, and in fact, you should be implementing these strategies regardless of where you’re at in your journey.
Again, this is because the quicker you learn these concepts, the more time, energy, and money you can put towards implementing these strategies.
If this concept interests you, I’d highly recommend making a cheap investment into my financial independence course.
This course will give you the direction you need to start building up a portfolio of passive assets, moving you closer to your financial independence dollar amount (which is probably lower than you think.) It is also packed full of personal finance tips that will save you more than the cost of the course, in the first month alone. If you’re early on in your financial independence journey, this part will be more valuable.
Again, if you reach your financial independence number, you’re free. You can continue on working if you want, move to work that’s more enjoyable for you, or retire completely if you with to do so. The beauty comes in the freedom of choice.
When you only have a little bit of money, it’s important to utilize it correctly.
Your goal should be to scale that money as quickly as possible, because let’s face it – no traditional investment is going to bring you a return big enough to make you rich.
The core concept of wealth building is using your money to make more. I hope that this article has given you some ideas on how to do exactly that.
It won’t be easy, but doing something extraordinary never is. Put in the work, and follow this framework, and I promise you will do very well.
To your success,
– James McAllister
Review the main points of this article in the SlideShare below. Feel free to embed this on your site, use it in your organization, and share it with others! All I ask is that you give credit! (Download links are available from SlideShare’s website, which you can access by clicking the LinkedIn icon)
In all business ventures including blogging, the best and most effective way to become efficient and make more money is to invest in yourself. Thus, I like the act that you highlighted the point to make self-investment. It is more like tell experts in your industry to please, hold me by the hand and show me the way. Exciting aspects.
You’re absolutely right. People fail to invest in themselves because they don’t realize how powerful it really is in the long run – you can’t look at a chart and quantify the return. Still, looking back it always proves to be the most valuable.
Thanks for stopping by!
James McAllister recently posted…You’re Not Done – Improving Your Info Products Long After Release
Wonderful article! Investing in yourself has to be the number one thing to do when we find our “purpose.” It doesn’t have to cost much when you first start out. As you mentioned, books are a good learning curve. When I started my own business offline, books and talking to other well established store owners in the neighborhood were my claim to fame so to speak. I gained so much knowledge before I spent a penny.
Then one has to scale upwards. Investing in stocks, bonds, real estate, etc. is something one has to do when scaling up. I chose real estate and it has benefited me through two decades.
The same applies online. When we start an online business, we do have to go through a learning curve. It will never end because there is always a good course out there to benefit from on our journey.
Bottom line is to keep on investing in your self because you are the master of your own universe lol.
You’re a prime example on how this strategy should play out over the long-term. Growing your skillset, and then utilizing your money through smart investments later on to further scale.
I’m pretty heavy into index funds at the moment, but hope to get into real estate more in the future myself. The tangability, leverage, and potential for higher returns has always appealed to me – it’s just not quite the right time yet.
I appreciate you stopping by here and sharing your story! I’m very interested in hearing more over time goes on – you’ve told me quite a bit over the years and with every new piece of information you share, the full picture comes together more and more!
James McAllister recently posted…The Definitive Guide To Establishing Trust, Before The Sale
A great read.
There was a time I struggled with investing myself until it dawned everything else I did was around me. If I am not mentally fit. If i don’t have the tools for the job. If, and if…this…
There is no point of investing in a business when the steward is not fit to run it….
You definitely are more valuable to more you invest in yourself.
So true Joshua! I work with a lot of people who get very excited to invest their money – often for the first time in their lives (outside of their 401k) but sadly it’s hard to generate any meaningful return from traditional investments, if you don’t have much capital to work with. Investments in yourself however can pay for themselves many, many times over – both in the short and the long-term!
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