Now that you know the different types of income, it’s time to take some action!
Receiving earned income is fine, but your primary aim should be to get passive and portfolio income as much as possible. Utilize earned income to its fullest until you finally reach your goal of earning only passive and portfolio income.
The preparatory steps to take would include:
First, you must save. You must earnestly establish your asset through savings, whether the money comes from earned, passive, or portfolio income. If you haven’t done so, better start now because time is essential in building assets. You must discipline yourself to set aside a fixed amount.
For example, if you promise yourself to set $500 each month as savings, you must consider this amount to be the least you will save. If it goes above this amount, the better it is. If you have more bills to pay, do not pay them from your savings. Your principle should be to pay yourself first, not last. Get your money to pay your bills elsewhere (by finding ways to do extra work or by thinking creatively on how you can generate extra income).
Your savings are not meant to pay bills, they are meant for future investments to get you out of the “rat race.” I am not suggesting that you throw yourself to a pitiful state. You can still enjoy life because that’s what life is meant to be, but be prudent in spending. Keep your expenses to necessities only (at least for the time being until you’ve attained financial freedom).
Next, you must plan. While still on the “rat race,” you must prepare plans of what you want to get involved in once you’ve achieved financial success.
Third, visualize. Try to imagine or visualize in your mind the possibilities of your prospective business. This will give you a prelude of what to expect and what else to prepare in case there are things that you missed to prepare.
Fourth, categorize. The time span for the transition period depends on many factors like the type of business, the value of your asset if money plays a major part of your intended business, and the availability of the people that may be involved in your plans.
Lastly, do some research. Know more about the business you will get into. Talk to specialists or people you know who are more knowledgeable in your intended business. If you avail of their services, be generous to them money-wise and they will reciprocate your generosity with helpful information. Buy books and tapes, attend seminars which will be helpful to increase your financial knowledge. Yes, I need to repeat that advice again because increasing one’s knowledge is really important and priceless. This will save you time, effort, and money in the long term. It also injects quality to your product, service, or business.
Your financial ability combined with the urge or the will to be financially secure can drive you to gain wealth. Just like an obstacle course, there will be drawbacks. Your determination will determine what will go to your pocket.
A person with financially developed abilities can see opportunities far beyond what his/her eyes can detect. Creativity revolves around the mind that is trained financially to make money. It takes time and technical skill to reach this level. Patiently keep developing this skill.
It might be difficult for an earned income person in the “rat race” to move to the “wealth express.” One way to motivate such person is to force him/her to set aside a fixed amount for savings no matter what. Again, creativity plays a vital role. Either he/she reduce his/her expenses, or find another source of income, or both. He/she should persevere in developing his/her financial knowledge.
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