The Four Pillars of Money

Want to live a good life?

Spend some time learning about the four pillars of money.

Because the less you understand money, the more it can make your life and relationship with it a drawn-out struggle.

You’ll always feel “behind” with money.

Earning less than you deserve. Living in constant debt.

And you can’t make financial progress without first knowing how money works.

You need to learn all you can about money. And then find a way to make it work for you. Buy YOU have to figure it out at some point.

Your money and financial life is personal.

And no-one is going to care about you or YOUR money and investments more than you!

So educate yourself. Talk about money. Read about money. Learn about money and the four pillars of money.

And then go and make some damn money!

The Four Pillars of Money:

  1. Expenses

As I list these four pillars of money, everything sounds simple, right?

Except, as we all know – simple doesn’t always mean easy.

And depending on who you ask what the four pillars of money are, the answers they give you are going to be different.

Regardless, I want to explain how I view them. So you can build a solid financial foundation and wealth eventually.

But if you don’t want to read all of this, here’s how:

Spend less than you earn. Then save and invest the rest consistently.

Pillar 1 = Income

Income and the generation of money go together.

Usually, your income has a lot to do with the value and amount of value you give to the market and world.

But it can also depend on what you know and the individual skill(s) you have.

Or said another way: your income depends on the contribution or value you can provide others. And how many people that value serves or affects.

And there are four ways to generate income that’ll determine your impact on the market and world:

1.1 As an Employee:

Working for someone else is the most common way people earn money.

Your employer pays you the employee for the hours you’ve worked. You’re paid for your time and services.

Either hourly or salary.

Employees can improve their income depending on:

  • What can they offer
  • What skills and knowledge do they have
  • How fast and can they get something done – save me time
  • Are they going to make or save me more money vs. not hiring them

But in general, your personal and professional growth and income grow when you add new skills and talents to your life.

1.2 Self-Employed:

Many people earn money working for themselves. This income creation usually has more potential than working as an employee for someone else.

But the amount of money made and the amount of time it takes that person to make that money will depend on…

The Demand:

  • What are the market demands in acquiring our services?
  • What’s the competition like?
  • What are the hourly and salary ranges like?

Because when you’re self-employed, you need to learn how to take advantage of working independently for yourself.

It doesn’t matter if you’re a taxi driver, accountant, or photographer. Your products and services need to meet or change to your potential clients’ needs.

And if there’s a good amount of demand for your products and services, that demand will lead to an improvement in your personal finances and income level.

1.3 Business Owner:

This third way of earning money falls into the category many refer to as “Capitalist.”

Because being a business owner can make you a millionaire.

And I want to remind you the business you own and operate doesn’t have to be local. Thanks to the Internet, the number of virtual business owners across the world has been steadily increasing.

Of course, the business or services you offer and their impact on others are important. Success in your business will depend on:

The Quality

Because the contribution and value of what you provide to others need to be great, you want people to love what you provide and share it with others.

And the amount of money you make and your personal finances will improve along the way as you get better. And become a…

1.4 Investor:

This fourth way of generating income. Investing.

When you invest your money, it goes to work for you as an employee.

You are no longer trading your time for money. And the money you earn and invest will provide you new money “passively.”

Without you having to do much or use any of your time 24/7.

And depending on the number of people you affect or impact at your job, in your business or professional services will determine the amount of income you have to invest.

Because when you bring genuine value to many different people, your income and money grow as well.

An example of this is when a championship boxer makes a world title defense. The match is seen by millions of people.

But who will earn more, the champion boxer or his challenger opponent?

Answer = The Champion

The champion will earn more because his impact and marketing brand is greater than his opponents’.

More people are watching or will watch the fight because the champion is boxing. Not the challenger.

But To Receive You Must First Give

Your mission in life should be to share your gifts and skills with as many people as possible.

How many people do you love, and how many others are you going to impact?

Because the supply, demand, quality, and quantity of the products or services you offer are huge factors that’ll determine your impact, income, and lifetime earnings.

Pillar 2 = Savings

Have you heard people say:

  • Money is to be spent “in life.”
  • I don’t save money because tomorrow my children will fight for it.
  • Money is not important to me.

Those who generally choose this way of thinking, earn a lot. Or earn little.

And… spend everything.

They prefer immediate satisfaction in life, at the cost of their security and financial future.

But the secret to savings a lot of money is having a good reason.

Here are two ways to save, one better than the other, you choose:

  1. If the reason is something material like buying a new car or the latest cellphone, you’ll stop saving when you finally get it.
  2. But if you’re saving for something greater, like going from an employee to a business owner or real estate investor, you’ll save as much as you can. And be more likely to continue.

Because now you have a good reason to save and keep saving. And when you save your money it allows you to invest more.

Pillar 3 = Investments

Investing has to do with several things like:

  • Placing the money in investments that have a good risk-return ratio.
  • Making money work for you.
  • Leaving it alone and giving it time to grow.

In achieving all of the above, information is an important asset. Because the more you know about your investments, the better.

And there’s a lot of good and free information on the internet about investing. You can take many different paths to start creating and earning more money.

But generally investments can be classified into the following categories:

  • Stocks, bonds, common funds, bills
  • Royalties for intellectual property such as music, writing, patents
  • investments)
  • Businesses that don’t require your presence. You are the owner, but you delegate the direction or management of it to someone else.

Pillar 4 = Expenses

This fourth pillar is all about a person’s ability to live within their means. Or live on less.

Many people struggle to keep what they’ve earned.

This pillar is linked to savings.

And cutting your expenses comes with a lot of great benefits. You can increase your cash flow, invest more, and grow your net worth faster.

Even billionaires like Warren Buffet and Bill Gates live simple lives compared to the billions they’re worth. Wealthy individuals like them have massive amounts of money.

And I’m not saying they don’t have nice things or live well. But for the most part, their lives are relatively “normal.”

They spend a lot of their money on philanthropy and humanitarian aid.

And those who understand money and are financially free normally splurge last. When whatever they’re spending money on doesn’t pose a risk to their financial freedom.

On the other hand, people who struggle with their finances buy things first. They don’t let money work for them and are delaying their economic growth.

So if you want to achieve financial freedom, learn to discipline yourself. Live a good but simple life. And don’t fall into the trap of spending all you make.

Live on less and invest the rest.

Recommendations – The Four Pillars of Money

If you want to improve your relationship with money, you need to start by making a plan.

  1. Get Out of Debt
  2. Save an Emergency Fund
  3. Live on Less
  4. Invest in Tax-Advantaged Accounts, Real Estate, or a Business

Where do you stand with the four pillars of money?

Consider your spending pattern and priorities. Rethink some aspects of your day-to-day life with money and personal finances.

Then, set your financial goals.

Because if you want to live a good life, you have to master money and the basics of personal finance basics.

Figure out your fixed expenses, what you spend on entertainment, and other discretionary expenses — things you want but don’t need.

Try and improve day by day with each category.

And consider everything you’ve learned about and the four pillars of money. Do your best to earn as much income as you can. And try not to depend on a single source of income.

Aim for at least four pillars (different sources) of income. And remember to…

Find a great reason to save. And put money to work for you by investing instead of you having to always work for it.

Because becoming wealthy over time is possible. But only for those willing to get put in the time.

So, live a good life. Improve your relationship with money and the four pillars today.

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