A big question on the minds of many young people today, is “How do I get ahead in life? How do I get to that point in the future when I become financially free?” Today, we at EasyRates are going to tell you about the 4 everyday choices that will either make you very rich or very poor.
Saving Vs Borrowing
So you’ve just landed your first job and the money is beginning to roll in. However, there’s a ton of new things to spend on. More clothes to wear to work, that latest Chanel bag or the limited edition Rolex watch, a car just to commute to work or show off to your friends, drinks with the colleagues regularly just to destress from a stressful day at work, and the list goes on….
With so much pressure to spend these days and credit cards so readily available, it isn’t surprising that more and more Singaporeans are falling into the vicious cycle of credit card debt. This is the first major point that will separate the future rich from the future poor. So ask yourself, are you a net saver/ spender? Because whether you become rich or poor depends very much on this.
The rich grow richer and the poor get poorer and it’s easy to understand why. People who borrow pay interest, while people who save earn it, you just have to figure out which side you want to be on. Do you want to be earning interest or paying it?
Of course, saving is easy on paper, but a smart way to begin the habit of saving is to follow 3 simple steps:
- Pay yourself first (I.e. Set aside some savings before you spend)
- Have a budget and track your expenses
- Don’t shop impulsively!
But moving beyond that, there are studies now that show that being in debt leads to poorer decision making which in turn keeps the poor… well poor. If life is a journey, then being in unnecessary debt is like being on a ship that leaks, you’ll probably never get very far and you’ll miss out on a lot of other opportunities that could have put you further ahead in life.
Creating Passive Income Vs Relying Solely On Active Income
Everyone has the same number of hours in a day, so there’s always going to be a limit on how many hours we can spend working. Understanding this is important because it helps you understand that the biggest bottleneck you have in terms of getting rich is your time.
The best way to get around this bottleneck? Simple, stop relying solely on active income and build passive income streams instead. For those of you who found that sentence to be as foreign as Swahili, active income refers to anything you earn as a result of actively working (Spending time working) on something (E.g. Creating a website, providing consultation services) and passive income refers to money you earn without constantly spending time on it (E.g. Investments, businesses that are hands off and do not require your active participation)
Passive Income is the ideal type of income to earn, since it never stops working for us, even when we sleep and it doesn’t take up our time. Besides who doesn’t like the idea of kicking back, relaxing and letting the money roll in.
Of course, creating passive income isn’t very easy, but it is a key difference between the normal and the rich by the time you hit your 30’s. Those who are generating passive income will make money even as they sleep, and those who don’t will spend sleepless nights working to make an extra buck.
Networking Vs Flying Solo
People often say that success is all about being at the right place at the right time. What they often forget is that it’s also about knowing the right people.
The truth is that the right people will help position you in the right place when it’s the right time and without them it can be really tough to find that moment to shine. In business, having the best products means nothing if no one knows about it and the same goes for you. On a personal level, It really doesn’t matter if you’re the best in your field if no one knows it.
If a tree falls in a forest and no one is around to hear it, does it make a sound?
If you’re brilliant at what you do, but no one knows it, will opportunity come?
With that in mind, learning to network is integral to getting ahead in life, so don’t spend too many nights at home watching Netflix and get out there to schmooze. Opportunity may be right around the corner and I’m quite sure it’s not the corner of your house. Some suggestions could be picking up new hobbies or joining common interest groups to socialise over those activities
Learning Vs Leisure
It’s really tough to tell someone who just graduated that there’s still a lot more learning to be done, but that’s the cold hard truth of it. Fresh graduates who enter the workforce will find themselves in need of new skill sets not just to get ahead in their career but at times just to do their jobs.
Helping you learn however, is not often high on employer’s to do list, so getting ahead in your career may depend on you spending time outside of work reading new books and taking up different courses. This of course comes at the sacrifice of the leisure time we could be spending with our friends and family.
The key to this is striking a balance, with more courses available online through portals like Udemy and Coursera, now subsidized through the government’s Skillsfuture program, learning new skills has never been easier So consider perhaps spending some time learning something new. As a favourite Singaporean saying goes
Work Smarter, Not Harder.
Work Better, Not Longer.
In the country that works the most overtime in the world, not just will this help you get more work done in less time, it’ll make you look effortless while doing it. So how many of these everyday decisions are you getting right? Think we may have left something out or feel you have an opinion on these factors? Leave a comment below! Think this was an awesome article that will help someone else? Share It Today!