1. Know what kind of income you’re working for
Many people still believe that their salary is the most important and only source of income. There are, however, 3 basic types of income:
Ordinary earned income:
In short, income by committing a job. It is the most highly taxed type of income and one exchanges time for money.
Another source of income comes from investments in equities, bonds and mutual funds. The returns are low and it is the second largest taxed income type.
Passive income streams can be generated by real estate or licensing. These are taxed at the lowest rate and even offer tax advantages. When building wealth, the main focus should be on this type of income.
2. Learn lesson #1
Which means that you should convert your ordinary earned income into passive income by investing into cash-flowing assets like Real Estate.
3. Invest in yourself
The best investment is and remains the investment in yourself. Investing does not start with shifting money, but in your head. With the right attitude and financial education you can build the necessary foundation to invest your money. Never stop investing in yourself.