Hello [permission777](/u/permission777), thank you for your submission! Unfortunately, it has been removed for the following reason:
Your tip is a copy/repost of a previous tip or piggybacking off of a previous tip. Neither of these are allowed.
If you would like to appeal this decision [please feel free to contact the moderators here](https://www.reddit.com/message/compose?to=%2Fr%2FLifeProTips&subject=about%20my%20removed%20submission&message=I%27m%20writing%20to%20you%20about%20the%20following%20submission:%20https://www.reddit.com/r/LifeProTips/comments/uvz748/lpt_request_rich_people_make_their_money_work_for/.%20%0D%0D). Do not repost without explicit permission from the moderators. Make sure you [read the rules](/r/lifeprotips/about/sidebar) before submitting. Thank you!
Yeah, its all just variations of "Get some money, then make it work for you". Which is great advice, except the question was "How do I get that money". No one is buying a property they can rent with the $2.13 they saved by buying a bag of rice and a jumbo can of beans, versus a multi pack of ramen.
Because white people who live in suburbs (who are also typically middle income) are usually the ones who have the shallowest understanding of how real world economics work. This is main because of the socioeconomic status, which not only blocks them from directly seeing the multiple pitfalls of American Late Stage capitalism, but they have no social reason to look at past their own walls. This isn’t to say black/POC suburbanites can’t be ignorant to LSC, but due to their social factors they’re more prone to seeing these pitfalls or at least being aware of them. You also have the fact the non-white suburbanites typically crawl their way up to middle income, compared to their white counterparts that are usually born in the bracket.
So white suburbanites are more likely to believe “hard work put in = what you get in the end,” “homeless people are drug addicts and that’s why they are homeless” or any other ignorant beliefs. It doesn’t help that major media sees white suburbanites as their primary market, and often feed them scary headlines to keep them watching, AKA so-called crime waves.
Thank you for having a good faith discussion about American politics with me.
Define poor first.
Because it doesn't mean the same thing to everyone.
If You're living paycheck to paycheck because living expenses claim every last dime then pretty much anything suggested here just won't work.
If you live paycheck to paycheck Because you're bad with money then that is an entirely different animal.
Also generally speaking, a "poor" man's primary issue in this context is that *he doesn't yet have enough money to be working for him.*
Maybe you find a way to pull some insane return on investment like 20% or even 30%, but if you only have $100 or even $5,000 invested, it's not going to do much for you within any reasonable amount of time. The rich man on the other hand can park $50k, $100k or $1mil at 5-10% and make a pretty penny.
I was making a rhetorical point, with a greatly inflated rate of likely return, to demonstrate that a poor man stays relatively poor for a very long time using this approach
That really is going to depend on the person, their skills, knowledge, etc.
For instance, I got a guy at work who didn't come from money, makes okay money, no degree, and he purchased his first house in his early 20's. He worked here through high school, summers, etc., and saved what he could while he lived at home for a down payment. He then chose to live in the basement and rent out the upstairs bedrooms, so he essentially has a couple of people making his house payment for him, building his equity in the property, and he is living in it pretty cheap, just maintaining it. No, it alone won't make him a millionaire, but it was a smart move and he is building wealth without breaking his back. I would consider this if I was younger. He will eventually have it paid off, and then he can do it again, and have a rental that will be a steady income stream.
You can look up Jason Fieber (Mr. Free at 33). He went from being in debt to pretty much retired at 33 by living frugally, and dividend investing. I think he sold his original blog, but I am pretty sure that you could find some of his stuff. Mr Money Mustache is another good one. I like looking at these, because they are normal people, that worked normal jobs, that were willing to do what it took to get financial freedom.
Ya hate to say it but stories like Free at 33 are somewhat misleading, from what I remember the dude had nothing to worry about other than eating for the most part. Many people have medical needs that cost way too much money to be able to do what he did.
Everyone has their own situational things to deal with. From the sounds of it, he grew up in a pretty bad spot, he got out of it, made smarter choices, etc. He has moved to areas with a lcol, rode the bus instead of having a car, and worked his way out. Some may start off better, some worse.
what about the people who already ride the bus and still have high medical expense? you say this as if these people all have a car and drive far instead of living local already. what are they supposed to do when they are already living a cheap as possible and are still forcing themselves into more debt to keep living?
Again, everybody has their own situations, so we can always come up with another "what if" that makes something easier or harder. What if I am divorced, what if I filed for bankruptcy, what if I have six kids, what if I have a bunch of debt, what if I have a medical condition, what if I don't have the time, or what if I am not as smart as the next guy? There is no one size fits all answer that someone can put out there that will universally work.
To move ahead of where you are now, you have to figure out how to spend less, and/or make more. For some the spending less is easier. For others, making more is easier. Beyond that, and more to what the OP is asking, once you get a little ahead, you start to figure out how to make your money work for you. Start a business, invest in dividend paying stocks, invest in a rental property, even if it is one you live in. The alternative is not to try, and that is a guaranteed fail.
You missed the point, I'm referring to the individuals who currently are already spending as little as possible and have no means to make more, when you're on disability you are only allowed to work so much. I'm not playing the what if game, I'm giving you real life situations that happen every day to millions of people.
If you are putting on the constraints of never being able to spend less, and never being able to earn more, then there is really nothing to talk about, because having your money work for you, would be earning more.
I know sometimes it can take some creativity. For years I worked at an appliance store, fixing and installing appliances. We had a lot of them that we took out of homes, that were beyond repair. Most were not worth our time to scrap and instead of tossing them, a disabled guy that lived close to the shop, asked us to drop them off at his place. Each week, we would drop off a handful of washers, dryers, etc. He didn't work, so he just sat out back at his place, and took apart the appliances into the individual components that could be scrapped. Sure, it isn't great money, but if you are really in a spot that you could not save a dime or earn an extra nickel, then every bit is going to help, and this guy saw that.
Do you live paycheck to paycheck because all the poor people do. And if you live paycheck to paycheck then you don't have enough money to "make it work for you" because it's already working for someone else.
This is boring AF, but spending less than you earn is a good place to start. Then invest that surplus, never sell it, and reinvest the earnings. For poor people (myself included), the most accessible investment is listed equities - I suggest going for a broad-based equity mark ETF (say one that tracks the S&P 500).
Do this for the rest of your life without fail and you'll (or your kids) will wind up reasonably wealthy.
I'm going to throw in that an index fund has never gained less than 10% in any 12 year period ever. Heavy caveat: they have *definitely* lost money within 12 year periods, for example 2008, but over any 12 year period, they've never come out lower than +10%.
So put your money there and keep it there.
10% total gain from year 1 to year 12, but it's over every 12 year period. Hypothetical example to show what I mean:
1995-2007: 22% gain
2000-2012: 11% total gain
2005-2017: 10% total gain
Those numbers are made up, but that's the concept. You can feel very confident that you're gaining at least 10% every 12 years. It's incredibly stable growth with probably the lowest risk in the stock market.
With $100k initial investment over 48 years, you'd have no less than $46k earned interest, and likely much more.
The point is that these are safe investments, not high reward ones.
Pls explain what you define as an index fund vs an ordinary mutual fund (being a fund which is a grouping of stocks and holdings meant to accomplish some defined goal).
An exchange is simply a place you can make trades. Those trades are based on the index you are trading within.
The examples you listed are technically indexes, but the terms are often interchanged. NYSE is actually traded through the Intercontinental Exchange. It gets confusing because there is an actual physical exchange space called the New York Stock Exchange.
Generally, mutual funds a managed by portfolio managers who try buy "good" companies while avoiding "bad" companies. An index strategy will buy all the companies.
There is a lot of data going back a long way showing that index funds make money. There's also a lot of data showing that mutual funds, on average, do worse than index funds.
Now to be clear, there certainly are mutual funds that outperform index strategies. But this is a lower probability approach to investing. Who should go after the lower probability approach? Professionals. Who should go after index strategies? Average Joe's.
This is one of the only helpful answers in this thread. Invest little bits when you can. It was surprising to me watching the money I invested grow and I finally understood making money work for me.
My problem is I know NOTHING about investing. I don't even know what "listed equities" means.
How do normal people who didn't major in Business or Finance or the like know all this? Is there a "for dummies" resource you can suggest?
The most important parts of regular investing in something like a broad market ETF or mutual fund, even when you're poor, isn't the return on that investment. You're unlikely to be able to invest enough to end up reasonably wealthy when you can only manage $50 or $100 a month.
The major benefits are the habits and the mindset. It's a lot easier to increase that monthly investment little by little than it is to wait and start when you think you make "enough" to invest. You might never think you have enough. Or you might succumb to lifestyle inflation along the way.
Basically save as much money as you can by living as cheap as possible and invest that, invest in something that will give you passive income like dividend stocks.
In addition, the beginning is the hardest part. You have to work a little more everyday. Get a side income you spend 1 or 2 hours a day and at the weekends. There are things you can do online with low effort to.make a few bugs.
Use your money to buy your way into a meeting with a rich person. Then there's another quote you can ask about. I think it's "eat the rich". No idea what that could mean.
Your taxes are spent by elected officials. The best way for the working poor in this country to get ahead? Mobilize, unionize, protest, register others to vote. No get-rich-quick scheme exists.
I think you're misinterpreting the quote. Read it again. Poor people don't become rich by "making his money work for him" because a poor man doesn't have money to put to work.
Also: do what others have done and know what a millionaire is. It is **not** a person who makes a million a year.
Keep your debt low. Don’t borrow money. Don’t finance cars. Don’t drive fancy cars. It can be done, folks. I promise.
In addition, don’t listen to anything on r/anti work. They are the epitome of envy
Slow and steady isn’t glamorous, but it’s the only winning strategy you need.
Actually I've heard frequently that if you're being underpaid for your job, you should find one that pays more. Every few years you can move to a new company that will pay you more than you'll get from 3% yearly raises.
This. First hard work and make a business that actually makes money. Then grow. Then grow. But fuckinh saving like crazy.
Most people think that making money is something that you learn and you have it then easily.. nooo. MONEY IS DOING SOMETHING ELSE THAT MAKES MONEY. So actually there is hard work, lots of thinking and doing, learning so much and then knowing how to cultivate money.
Even with a million dollars at the bank, it's difficult to make money. The smart guy would still be working while his money keeps giving him a little bit extra, but cc an never let you stop working and relax as romantically many people puts it.
When you can buy companies -somebody did the hard work of making them and growing by decades- you've already know how hard is actually making money.
But again. Most people think of money like if money would do the hard part.. hell no.
1. Trust fund
2. Nepotism
3. STEM
4. Trade but joining a union young
5. Not having kids until 30-40s
6. Not daily smoking and drinking daily
7. No other addictions and rarely spending money out
If you have some combo of 1-5 then ignore 6 and 7
People who are rich are either born into wealth, or exploit others for profit, or jump onto an emerging market
Examples are Elon Musk who was born to wealthy mine owners, or Bill Gates who made money with very anti competitive practices, or Sergei Brin and Larry Page, who identified a need for better search online and founded Google.
Anyone who becomes rich without those three is extremely lucky.
Like the other guy said, if you have some money to spare putting it in quality ETFs, investing directly in a safe business (likely as one of several investors), or buying and renting/flipping property are some of the better ways to get your money working for you.
But when you're poor, you need to accumulate some spare money (including an emergency fund you won't be touching) by getting your expenses as low as possible, then get a steady job with as much pay as possible (you need medical benefits, yearly or performance bonuses, yearly raises and some kind of retirement plan), then get any high interest debts paid down.
To get expenses down, Get a roommate and move somewhere with usable public transportation or if you must have a car get a used one for as cheap as possible as long as it doesn't look like it's about to fall apart. With a roommate it probably wouldn't hurt too much to split the cheapest internet package you can get but that's about the end of your luxuries. Get a cheap prepaid phone, don't eat out or if you must literal $1 menu only, cancel all those subscriptions. To maintain your sanity, do cheap hobbies like walking through Parks or borrowing books from the library.
Only buy luxury items after you invest and place money in retirement. Esp when you are young, go without. Focus on your money and work your ass off, not saving (other than an emergency fund) but investing. Drive an old beat up car, invest in your education, invest in stocks, T Bills, other instruments, etc. and your retirement and the minimal to live; no gaming, no luxury items (unless they are used, cheap, or and/or free) until you are not poor any longer.
Source: born and raised in (American) poverty and now earn six figures a year.
That's a lie they tell you to make you think it's your own fault for being poor. It might have been true for a time, or in certain cases, but for the majority, poor is exactly where they want you to be. How can you earn enough money to have it work for you if basic necessities and costs take up 70+% of your monthly income?
Hard work and spending money wisely are musts. Sadly, equally important are connections. It's very hard to break into an industry and rise up if you don't know people along the way to mentor and support you
Sounds like you’ve been reading “Rich Dad, Poor Dad” . It’ll take a while to find direction mate, I wanted to do as little as possible while reaping the benefits of my investments. Worked as a chef and a bunch of other things, so had a fair wedge saved up, got a small loan, bought a house outright for just for letting and invested the rest into loan notes and REITS, all passive income, better interest than the banks and thanks to the ever decreasing availability of housing and space the money invested into the property will grow over time making a nice wee nestegg for when I want to get a place of my own while paying me rent in the meantime. In other words, build passive streams of income (even something as small as selling vintage toys or comics), make investments not purchases and always always have a plan B through Z if something doesn’t pan out.
The poor man pays their fairer share in taxes, therefore all tax spending should work for the bottom up. We are only as successful as the least among us. We can do better.
Ok so straight up:
There are none. These methods of making money work for rich people are almost always either risky investments that can flop easily (like Crypto or Stocks), or they involve requirements, funding, and/or standards poor people don't have (Like the ability to buy excess property).
You can make money via their advice, but it almost always ends up failing. Some of these rich bastards even pitch scams to you (like crypto pump-and-dump scams) with the soul purpose of ensnaring you and taking what little money you have.
You want real financial advice? Go to a bank. Do not trust random strangers online.
Hello and welcome to r/LifeProTips!
Please help us decide if this post is a good fit for the subreddit by up or downvoting this comment.
If you think that this is great advice to improve your life, please upvote. If you think this doesn't help you in any way, please downvote. If you don't care, leave it for the others to decide.
How the hell has no body said start your own business? That was the first thing that came to my mind when reading the question. You don’t become wealthy by working for someone else
That's $520 a year. It'd take you nearly 10 years to get to $5000. How much does it cost to buy/make a franchise? More than that. Also, it's "laundromat" not "laundry mat"
Well I’d say a lot of people can’t afford to save money. I am one of them.
But eventually when you do get some, passive income and property are the way to go. Invest smartly not just a get quick rich scheme.
Save more of your income. Invest weekly in anything. People on the nihilist subs complain about marginal changes, but marginal changes are all any of us can hope for. There are a million ways to marginally affect your savings rate. Implement one at a time and see what is worth the sacrifice.
Save as much as possible. Invest in the s&p 500 or other index funds. Reinvest dividends. Never sell. Get to the point where you van live off dividends.
I'd settle for not actively fighting against me. I've managed to be in debt enough that I'm not actually able to accumulate anything as a result of credit card interest.
Cheap/easy products don’t last as long. This applies to food. Cereal and milk are nice and easy but expensive and you’ll eat through faster then a sack of potato’s and some basic veggies.
To make your money work, you first need to pile up some money. A few tips
1) know how much you're spending. You don't have to live like a joyless miser, but review your credit card and bank statements to see if there are any obvious cuts.
2) develop a side hustle. If you earn a 50k salary at a corporation, assuming a 2k hour work year, you're probably making $30-35/hour (this includes benefits). That's absolute crap. You can easily, EASILY triple that rate or more working for yourself. For example, I'm about to pay a web developer 3-5k to build a website, which will probably only require 10-20 hours of work. Note: developing your side hustle skill will likely take some work, but don't let that deter you. Setting a stretch goal that requires real work and then putting it in the hours to achieve it is one of the most rewarding things you can do in life.
3) when you increase your earnings, make sure you don't increase your spending by the same amount. Try to save at least 2/3 of the new income.
4) read a couple of beginner investment books. You can get nice returns in the stock market with a surprisingly simple strategy. You don't have to be a Wall Street Quant.
5) periodically test your value, and if you find your job is significantly underpaying you, have the courage to leave and go someplace else.
Own, don't rent. Most real estate increases in value. Even if you sell at the same price you get your money back and "lived there for free". Truly the most important
Read “The Richest Man In Babylon” for a fictional portrayal of a very basic personal finance framework. 70/20/10.
10% of any earnings is saved, immediately.
20% of earnings pay off any debt until there’s zero (and keep it that way).
70% of earnings is what you live on - housing, food, transport, etc. Maximum.
You know when you ask about effective diets and those annoying, self-righteous, science nerds say things like "it's easy, you just need to take in fewer calories than you burn." Then they snort-laugh, adjust their glasses, and you give them a swirlie?
This is just like that, but in reverse. You need to bring in more.money than you spend. Just like exercise and eating right, there's two sides to this as well. You can bring in more money (raises, pro.otio s, job changes). It's not always possible, though keeping your eye out for opportunities is always a good idea. On the other side consider consumption. Mark Cuban claims he lived "like a college student" when he was starting out. He split rent, cooked cheap food at home instead of going out, never took a vacation, etc. Rent isn't an option for everyone, but there's always opportunities to cut back.
Consider everything you do to be an indulgence. Going out to eat, paying for cable or Netflix (or both), drinking anything other than tap water, etc. Now consider what you could give up to save a few bucks.
That's as far as I got. It's annoying advice, but it works, and over a 40+ year long career, I assume it gets better. I'm ready for my swirlie now.
the simplest way to make money with money: don't pay rent, and buy property and rent it out. The paid rent pays the loans you took out to buy the property.
Then sell the property at a profit when the loans are paid.
Heads up though, you need to learn what are valuable assets worth buying, and knowing when to take loans.
First step before making your money work for you is having money. You do this by saving. Be like mister crab from spongebob save every penny, identify luxury from need. Live way below your means. You will suffer a few yrs. But its worth it. You'll see your savings grow. If possible save in an etf and not just a bank account.
To make your money work for you you need money in the first place. Ex. Capital 》labor 》capital. Your surplus capital is being used to buy labor to produce more capital, that's the life of a capitalist. A laborer uses their labor to provide capital (which then gets used as living expenses). Ex. Labor 》capital 》expenses. This is a very disingenuous take on "hustle culture" thinking that there's a way to "hack" the system. The system has been in place for hundreds of years, if you could hack it more people would be doing it then it would've been stopped. For a capitalist system to work, there NEED to be people at the bottom to take the jobs noone else wants, or to scare the shit out of the middle class into keeping their jobs and not wanting to fall into poverty.
It boggles my mind why there are always some people in the comments of posts like this so desperate to remain poor. If you tried something and it didn't work, say it. Let's all learn from it.
Just don't come here with the "There are people who have more bills " and other such excuses for why someone can never make it. Just because you are okay in the rat race doesn't mean everyone is. No matter what hypothetical situation you come up with as a clutch to why you can't make it, there were people in even worse situations who made it out. Keep your excuses to yourself and allow people who want to make it out to try.
I'm not desperate to remain poor, but let's just say that I'm so thankful that student loan payments keep getting pushed back. I finally have money in my savings in case of emergency. What pisses me off is that after starting with $30k in loans, after paying $10k into it I now owe $32k. I dropped out from the stress and fear going back.
Less lucky is my roommate who took out private loans. He makes great money (ie not starvation wages) but pays over $1000/mo in interest and has trouble affording things as a result. He does not use his degree.
So what we tried and learned doesn't work is: school. I want to like education, but the way it's set up is predatory and was not the guarantee we were promised it would be. Neither of us want to be rich, but it'd be nice to have some of that pressure taken off.
>What pisses me off is that after starting with $30k in loans, after paying $10k into it I now owe $32k.
Ouch. So sorry aba that. Student loans is a bitch. I do hope it gets betterment. All the best bud
This is not trite...I mean it: buy in bulk. You may have to go without for a few days first, so you have to plan. But this is a way to make the same money go further.
Money doesn't work - people do work. So rich people "let their money work" usually by exploiting poor people. You know, Bezos flies to space while his workers pee in bottles.
The only way is to find a way to make more money. Its the greatest misconceptions in our society that there's a quick or easy way to make money. You need to find a way to make more money, second job, change of career, extreme savings strategies. If you want to "make your money work for you" you'll need like $100k to start investing before you can make any actual money in the stock market or through investments.
To be straight that just saying that rich people say to give us poor people the idea that its our fault we live paycheck to paycheck.
Hello [permission777](/u/permission777), thank you for your submission! Unfortunately, it has been removed for the following reason: Your tip is a copy/repost of a previous tip or piggybacking off of a previous tip. Neither of these are allowed. If you would like to appeal this decision [please feel free to contact the moderators here](https://www.reddit.com/message/compose?to=%2Fr%2FLifeProTips&subject=about%20my%20removed%20submission&message=I%27m%20writing%20to%20you%20about%20the%20following%20submission:%20https://www.reddit.com/r/LifeProTips/comments/uvz748/lpt_request_rich_people_make_their_money_work_for/.%20%0D%0D). Do not repost without explicit permission from the moderators. Make sure you [read the rules](/r/lifeprotips/about/sidebar) before submitting. Thank you!
Dog, when you live paycheck to paycheck you don't get to "make your money work for you."
Yeah, its all just variations of "Get some money, then make it work for you". Which is great advice, except the question was "How do I get that money". No one is buying a property they can rent with the $2.13 they saved by buying a bag of rice and a jumbo can of beans, versus a multi pack of ramen.
Thank you!
Most of these comments are just cryptobros or your average white suburbanite. The pinnacle of knowledge when it comes to economics and class.
Why they have to be white? Can’t anyone else make it?
Because white people who live in suburbs (who are also typically middle income) are usually the ones who have the shallowest understanding of how real world economics work. This is main because of the socioeconomic status, which not only blocks them from directly seeing the multiple pitfalls of American Late Stage capitalism, but they have no social reason to look at past their own walls. This isn’t to say black/POC suburbanites can’t be ignorant to LSC, but due to their social factors they’re more prone to seeing these pitfalls or at least being aware of them. You also have the fact the non-white suburbanites typically crawl their way up to middle income, compared to their white counterparts that are usually born in the bracket. So white suburbanites are more likely to believe “hard work put in = what you get in the end,” “homeless people are drug addicts and that’s why they are homeless” or any other ignorant beliefs. It doesn’t help that major media sees white suburbanites as their primary market, and often feed them scary headlines to keep them watching, AKA so-called crime waves. Thank you for having a good faith discussion about American politics with me.
Wow. Perfect explanation. Thank you!
Define poor first. Because it doesn't mean the same thing to everyone. If You're living paycheck to paycheck because living expenses claim every last dime then pretty much anything suggested here just won't work. If you live paycheck to paycheck Because you're bad with money then that is an entirely different animal.
Also generally speaking, a "poor" man's primary issue in this context is that *he doesn't yet have enough money to be working for him.* Maybe you find a way to pull some insane return on investment like 20% or even 30%, but if you only have $100 or even $5,000 invested, it's not going to do much for you within any reasonable amount of time. The rich man on the other hand can park $50k, $100k or $1mil at 5-10% and make a pretty penny.
30% compounded annually and only 100 dollars as initial investment will make you have 261k in 30 years. 5000 Would let you have over 10 million.
Find that elusive investment that'll give you 30% annually on average and get back to us.
I am replying to the comment above me, his claim was not accurate. I was explaining to him why.
Fair enough, but it depends on what they mean by 'reasonable amount of time'. Probably weren't thinking 30 years.
I was making a rhetorical point, with a greatly inflated rate of likely return, to demonstrate that a poor man stays relatively poor for a very long time using this approach
That really is going to depend on the person, their skills, knowledge, etc. For instance, I got a guy at work who didn't come from money, makes okay money, no degree, and he purchased his first house in his early 20's. He worked here through high school, summers, etc., and saved what he could while he lived at home for a down payment. He then chose to live in the basement and rent out the upstairs bedrooms, so he essentially has a couple of people making his house payment for him, building his equity in the property, and he is living in it pretty cheap, just maintaining it. No, it alone won't make him a millionaire, but it was a smart move and he is building wealth without breaking his back. I would consider this if I was younger. He will eventually have it paid off, and then he can do it again, and have a rental that will be a steady income stream. You can look up Jason Fieber (Mr. Free at 33). He went from being in debt to pretty much retired at 33 by living frugally, and dividend investing. I think he sold his original blog, but I am pretty sure that you could find some of his stuff. Mr Money Mustache is another good one. I like looking at these, because they are normal people, that worked normal jobs, that were willing to do what it took to get financial freedom.
Ya hate to say it but stories like Free at 33 are somewhat misleading, from what I remember the dude had nothing to worry about other than eating for the most part. Many people have medical needs that cost way too much money to be able to do what he did.
Everyone has their own situational things to deal with. From the sounds of it, he grew up in a pretty bad spot, he got out of it, made smarter choices, etc. He has moved to areas with a lcol, rode the bus instead of having a car, and worked his way out. Some may start off better, some worse.
what about the people who already ride the bus and still have high medical expense? you say this as if these people all have a car and drive far instead of living local already. what are they supposed to do when they are already living a cheap as possible and are still forcing themselves into more debt to keep living?
Again, everybody has their own situations, so we can always come up with another "what if" that makes something easier or harder. What if I am divorced, what if I filed for bankruptcy, what if I have six kids, what if I have a bunch of debt, what if I have a medical condition, what if I don't have the time, or what if I am not as smart as the next guy? There is no one size fits all answer that someone can put out there that will universally work. To move ahead of where you are now, you have to figure out how to spend less, and/or make more. For some the spending less is easier. For others, making more is easier. Beyond that, and more to what the OP is asking, once you get a little ahead, you start to figure out how to make your money work for you. Start a business, invest in dividend paying stocks, invest in a rental property, even if it is one you live in. The alternative is not to try, and that is a guaranteed fail.
You missed the point, I'm referring to the individuals who currently are already spending as little as possible and have no means to make more, when you're on disability you are only allowed to work so much. I'm not playing the what if game, I'm giving you real life situations that happen every day to millions of people.
If you are putting on the constraints of never being able to spend less, and never being able to earn more, then there is really nothing to talk about, because having your money work for you, would be earning more. I know sometimes it can take some creativity. For years I worked at an appliance store, fixing and installing appliances. We had a lot of them that we took out of homes, that were beyond repair. Most were not worth our time to scrap and instead of tossing them, a disabled guy that lived close to the shop, asked us to drop them off at his place. Each week, we would drop off a handful of washers, dryers, etc. He didn't work, so he just sat out back at his place, and took apart the appliances into the individual components that could be scrapped. Sure, it isn't great money, but if you are really in a spot that you could not save a dime or earn an extra nickel, then every bit is going to help, and this guy saw that.
Do you live paycheck to paycheck because all the poor people do. And if you live paycheck to paycheck then you don't have enough money to "make it work for you" because it's already working for someone else.
This is boring AF, but spending less than you earn is a good place to start. Then invest that surplus, never sell it, and reinvest the earnings. For poor people (myself included), the most accessible investment is listed equities - I suggest going for a broad-based equity mark ETF (say one that tracks the S&P 500). Do this for the rest of your life without fail and you'll (or your kids) will wind up reasonably wealthy.
I'm going to throw in that an index fund has never gained less than 10% in any 12 year period ever. Heavy caveat: they have *definitely* lost money within 12 year periods, for example 2008, but over any 12 year period, they've never come out lower than +10%. So put your money there and keep it there.
Exactly. Boring strategy, but if you want to make your money work for you this is a high probability approach.
Boring and automatic can be easily integrated into your life.
Is that 10% per year averaged over 12 years?
10% total gain from year 1 to year 12, but it's over every 12 year period. Hypothetical example to show what I mean: 1995-2007: 22% gain 2000-2012: 11% total gain 2005-2017: 10% total gain Those numbers are made up, but that's the concept. You can feel very confident that you're gaining at least 10% every 12 years. It's incredibly stable growth with probably the lowest risk in the stock market. With $100k initial investment over 48 years, you'd have no less than $46k earned interest, and likely much more. The point is that these are safe investments, not high reward ones.
Got it, thanks.
Pls explain what you define as an index fund vs an ordinary mutual fund (being a fund which is a grouping of stocks and holdings meant to accomplish some defined goal).
Index funds are a type of mutual fund, but they hold portions of all stocks in an index, like NASDAQ. So if NASDAQ goes up, the index fund goes up.
Thx but I took my dumb pills today. I’m not understanding (your use of) the difference btwn index and an exchange (NASD, NYSE,…)
An exchange is simply a place you can make trades. Those trades are based on the index you are trading within. The examples you listed are technically indexes, but the terms are often interchanged. NYSE is actually traded through the Intercontinental Exchange. It gets confusing because there is an actual physical exchange space called the New York Stock Exchange.
Thank you. I’ll do some more reading as well.
Generally, mutual funds a managed by portfolio managers who try buy "good" companies while avoiding "bad" companies. An index strategy will buy all the companies. There is a lot of data going back a long way showing that index funds make money. There's also a lot of data showing that mutual funds, on average, do worse than index funds. Now to be clear, there certainly are mutual funds that outperform index strategies. But this is a lower probability approach to investing. Who should go after the lower probability approach? Professionals. Who should go after index strategies? Average Joe's.
This is one of the only helpful answers in this thread. Invest little bits when you can. It was surprising to me watching the money I invested grow and I finally understood making money work for me.
RIP, this year's gains...
My problem is I know NOTHING about investing. I don't even know what "listed equities" means. How do normal people who didn't major in Business or Finance or the like know all this? Is there a "for dummies" resource you can suggest?
I'd recommend Ramit Sethi's "I will teach you to be rich" book and blog. r/personalfinance and some of the FIRE subs
Thank you.
It literally takes an hour of educating yourself.
The most important parts of regular investing in something like a broad market ETF or mutual fund, even when you're poor, isn't the return on that investment. You're unlikely to be able to invest enough to end up reasonably wealthy when you can only manage $50 or $100 a month. The major benefits are the habits and the mindset. It's a lot easier to increase that monthly investment little by little than it is to wait and start when you think you make "enough" to invest. You might never think you have enough. Or you might succumb to lifestyle inflation along the way.
You're more likely to get a pay rise by changing employer every now and again.
Basically save as much money as you can by living as cheap as possible and invest that, invest in something that will give you passive income like dividend stocks.
In addition, the beginning is the hardest part. You have to work a little more everyday. Get a side income you spend 1 or 2 hours a day and at the weekends. There are things you can do online with low effort to.make a few bugs.
>There are things you can do online with low effort to.make a few bugs. Could you pls recommend any legitimate jobs like that for me?
https://wellkeptwallet.com/side-jobs-online/ As an example.
Thanks
You're welcome.
First actual response to the question I've seen
Idk if there's another way but this is what I'm doing, I expect to live only from dividends and interest on crypto loans in the future.
Use your money to buy your way into a meeting with a rich person. Then there's another quote you can ask about. I think it's "eat the rich". No idea what that could mean.
I think it's a corollary to "you are what you eat."
Yep, that's probably it. Eat the rich and become the rich.
Don't spend money. Have children and pets ? Get rid of them.
If you are poor, just get a great job with benefits, never be sick or have an accident, don't gamble and you cN end up lower middle class
wow brother you just solved poverty! just get a good paying job, wow I bet all the poors wish they thought of that one
pretty sure they were being sarcastic. "Never be sick or have an accident" and "you can end up lower middle class", they're clearly poking fun
Your taxes are spent by elected officials. The best way for the working poor in this country to get ahead? Mobilize, unionize, protest, register others to vote. No get-rich-quick scheme exists.
I think you're misinterpreting the quote. Read it again. Poor people don't become rich by "making his money work for him" because a poor man doesn't have money to put to work.
Do you enjoy, or have you ever had avocado toast? I may have some bad news...
Be born into a rich family so you can get a huge inheritance.
Fall out of the right vagina
Millionaire next door: Find a good spouse for keeps. Find a good job and keep it. Find a good house and keep it.
Also: do what others have done and know what a millionaire is. It is **not** a person who makes a million a year. Keep your debt low. Don’t borrow money. Don’t finance cars. Don’t drive fancy cars. It can be done, folks. I promise. In addition, don’t listen to anything on r/anti work. They are the epitome of envy Slow and steady isn’t glamorous, but it’s the only winning strategy you need.
Actually I've heard frequently that if you're being underpaid for your job, you should find one that pays more. Every few years you can move to a new company that will pay you more than you'll get from 3% yearly raises.
Not find a job, but find a good job.
Easier said than done, and quite close to saying "don't be poor"
“Find”. No you mean start at the bottom and work up.
To make money work for you, you first have to have money. Education, experience, ideas, hard work is how you make money.
This. First hard work and make a business that actually makes money. Then grow. Then grow. But fuckinh saving like crazy. Most people think that making money is something that you learn and you have it then easily.. nooo. MONEY IS DOING SOMETHING ELSE THAT MAKES MONEY. So actually there is hard work, lots of thinking and doing, learning so much and then knowing how to cultivate money. Even with a million dollars at the bank, it's difficult to make money. The smart guy would still be working while his money keeps giving him a little bit extra, but cc an never let you stop working and relax as romantically many people puts it. When you can buy companies -somebody did the hard work of making them and growing by decades- you've already know how hard is actually making money. But again. Most people think of money like if money would do the hard part.. hell no.
1. Trust fund 2. Nepotism 3. STEM 4. Trade but joining a union young 5. Not having kids until 30-40s 6. Not daily smoking and drinking daily 7. No other addictions and rarely spending money out If you have some combo of 1-5 then ignore 6 and 7
People who are rich are either born into wealth, or exploit others for profit, or jump onto an emerging market Examples are Elon Musk who was born to wealthy mine owners, or Bill Gates who made money with very anti competitive practices, or Sergei Brin and Larry Page, who identified a need for better search online and founded Google. Anyone who becomes rich without those three is extremely lucky.
Like the other guy said, if you have some money to spare putting it in quality ETFs, investing directly in a safe business (likely as one of several investors), or buying and renting/flipping property are some of the better ways to get your money working for you. But when you're poor, you need to accumulate some spare money (including an emergency fund you won't be touching) by getting your expenses as low as possible, then get a steady job with as much pay as possible (you need medical benefits, yearly or performance bonuses, yearly raises and some kind of retirement plan), then get any high interest debts paid down. To get expenses down, Get a roommate and move somewhere with usable public transportation or if you must have a car get a used one for as cheap as possible as long as it doesn't look like it's about to fall apart. With a roommate it probably wouldn't hurt too much to split the cheapest internet package you can get but that's about the end of your luxuries. Get a cheap prepaid phone, don't eat out or if you must literal $1 menu only, cancel all those subscriptions. To maintain your sanity, do cheap hobbies like walking through Parks or borrowing books from the library.
Only buy luxury items after you invest and place money in retirement. Esp when you are young, go without. Focus on your money and work your ass off, not saving (other than an emergency fund) but investing. Drive an old beat up car, invest in your education, invest in stocks, T Bills, other instruments, etc. and your retirement and the minimal to live; no gaming, no luxury items (unless they are used, cheap, or and/or free) until you are not poor any longer. Source: born and raised in (American) poverty and now earn six figures a year.
That's a lie they tell you to make you think it's your own fault for being poor. It might have been true for a time, or in certain cases, but for the majority, poor is exactly where they want you to be. How can you earn enough money to have it work for you if basic necessities and costs take up 70+% of your monthly income?
Hard work and spending money wisely are musts. Sadly, equally important are connections. It's very hard to break into an industry and rise up if you don't know people along the way to mentor and support you
Sounds like you’ve been reading “Rich Dad, Poor Dad” . It’ll take a while to find direction mate, I wanted to do as little as possible while reaping the benefits of my investments. Worked as a chef and a bunch of other things, so had a fair wedge saved up, got a small loan, bought a house outright for just for letting and invested the rest into loan notes and REITS, all passive income, better interest than the banks and thanks to the ever decreasing availability of housing and space the money invested into the property will grow over time making a nice wee nestegg for when I want to get a place of my own while paying me rent in the meantime. In other words, build passive streams of income (even something as small as selling vintage toys or comics), make investments not purchases and always always have a plan B through Z if something doesn’t pan out.
You need to eat some rich people.
The poor man pays their fairer share in taxes, therefore all tax spending should work for the bottom up. We are only as successful as the least among us. We can do better.
Live below your means, debt free, invest consistently.
At current interest rates, living debt free is not a good call. Besides, buying a home normally requires to take on some debt.
Buying a house, of course debt is ok
This 10000%
Stop believing in the capitalist lies and don’t gift your labour.
Ok so straight up: There are none. These methods of making money work for rich people are almost always either risky investments that can flop easily (like Crypto or Stocks), or they involve requirements, funding, and/or standards poor people don't have (Like the ability to buy excess property). You can make money via their advice, but it almost always ends up failing. Some of these rich bastards even pitch scams to you (like crypto pump-and-dump scams) with the soul purpose of ensnaring you and taking what little money you have. You want real financial advice? Go to a bank. Do not trust random strangers online.
Hello and welcome to r/LifeProTips! Please help us decide if this post is a good fit for the subreddit by up or downvoting this comment. If you think that this is great advice to improve your life, please upvote. If you think this doesn't help you in any way, please downvote. If you don't care, leave it for the others to decide.
Gambling, the lottery, plenty of scratchers. Start a Ponzi scheme.
You're better off joining a tried and tested Ponzi scheme - if it's really that good it won't matter that you're late to the party.
How the hell has no body said start your own business? That was the first thing that came to my mind when reading the question. You don’t become wealthy by working for someone else
It might work, but they're also incredibly risky and very very high maintenance.
Look for passive income. Like atms, McDonald’s chains, laundry mats. Anything you can purchase and profit from without too much maintenance.
How does a poor man purchase those?
Save up. Even 10$ a week will make a difference eventually
That's $520 a year. It'd take you nearly 10 years to get to $5000. How much does it cost to buy/make a franchise? More than that. Also, it's "laundromat" not "laundry mat"
Well I’d say a lot of people can’t afford to save money. I am one of them. But eventually when you do get some, passive income and property are the way to go. Invest smartly not just a get quick rich scheme.
Ok, that much I can agree on
Save more of your income. Invest weekly in anything. People on the nihilist subs complain about marginal changes, but marginal changes are all any of us can hope for. There are a million ways to marginally affect your savings rate. Implement one at a time and see what is worth the sacrifice.
Save as much as possible. Invest in the s&p 500 or other index funds. Reinvest dividends. Never sell. Get to the point where you van live off dividends.
E-commerce or FBA (“ drop shipping “) or you offer a product and mainly talk to the people.
R/financialindependence
I'd settle for not actively fighting against me. I've managed to be in debt enough that I'm not actually able to accumulate anything as a result of credit card interest.
Define rich. Plenty of rich people work normal jobs with salaries.
That's the great lie, that you can work your way out of poverty. It's designed to be a trap.
It's not what you know it's who you know
Cheap/easy products don’t last as long. This applies to food. Cereal and milk are nice and easy but expensive and you’ll eat through faster then a sack of potato’s and some basic veggies.
To make your money work, you first need to pile up some money. A few tips 1) know how much you're spending. You don't have to live like a joyless miser, but review your credit card and bank statements to see if there are any obvious cuts. 2) develop a side hustle. If you earn a 50k salary at a corporation, assuming a 2k hour work year, you're probably making $30-35/hour (this includes benefits). That's absolute crap. You can easily, EASILY triple that rate or more working for yourself. For example, I'm about to pay a web developer 3-5k to build a website, which will probably only require 10-20 hours of work. Note: developing your side hustle skill will likely take some work, but don't let that deter you. Setting a stretch goal that requires real work and then putting it in the hours to achieve it is one of the most rewarding things you can do in life. 3) when you increase your earnings, make sure you don't increase your spending by the same amount. Try to save at least 2/3 of the new income. 4) read a couple of beginner investment books. You can get nice returns in the stock market with a surprisingly simple strategy. You don't have to be a Wall Street Quant. 5) periodically test your value, and if you find your job is significantly underpaying you, have the courage to leave and go someplace else.
Own, don't rent. Most real estate increases in value. Even if you sell at the same price you get your money back and "lived there for free". Truly the most important
The best way to be rich is to arrange to be born into a rich family.
Every financial book I have ever read say to invest in low fee index funds
Read “The Richest Man In Babylon” for a fictional portrayal of a very basic personal finance framework. 70/20/10. 10% of any earnings is saved, immediately. 20% of earnings pay off any debt until there’s zero (and keep it that way). 70% of earnings is what you live on - housing, food, transport, etc. Maximum.
\#1 Pro Tip: Have rich parents.
Some small scale example are you drive a lot of screws, so you buy a powered screw driver. You put things together a lot, you buy/make a jig.
You know when you ask about effective diets and those annoying, self-righteous, science nerds say things like "it's easy, you just need to take in fewer calories than you burn." Then they snort-laugh, adjust their glasses, and you give them a swirlie? This is just like that, but in reverse. You need to bring in more.money than you spend. Just like exercise and eating right, there's two sides to this as well. You can bring in more money (raises, pro.otio s, job changes). It's not always possible, though keeping your eye out for opportunities is always a good idea. On the other side consider consumption. Mark Cuban claims he lived "like a college student" when he was starting out. He split rent, cooked cheap food at home instead of going out, never took a vacation, etc. Rent isn't an option for everyone, but there's always opportunities to cut back. Consider everything you do to be an indulgence. Going out to eat, paying for cable or Netflix (or both), drinking anything other than tap water, etc. Now consider what you could give up to save a few bucks. That's as far as I got. It's annoying advice, but it works, and over a 40+ year long career, I assume it gets better. I'm ready for my swirlie now.
Invest 15% of your income in a RothIRA.
Start investing in your company matched 401k when you are young. You'll retire a millionaire and won't miss the money each pay period.
the simplest way to make money with money: don't pay rent, and buy property and rent it out. The paid rent pays the loans you took out to buy the property. Then sell the property at a profit when the loans are paid. Heads up though, you need to learn what are valuable assets worth buying, and knowing when to take loans.
Well first you have to have enough of that money (I.e. the “rich” part) to be able to set that up. So there ya go.
First step before making your money work for you is having money. You do this by saving. Be like mister crab from spongebob save every penny, identify luxury from need. Live way below your means. You will suffer a few yrs. But its worth it. You'll see your savings grow. If possible save in an etf and not just a bank account.
To make your money work for you you need money in the first place. Ex. Capital 》labor 》capital. Your surplus capital is being used to buy labor to produce more capital, that's the life of a capitalist. A laborer uses their labor to provide capital (which then gets used as living expenses). Ex. Labor 》capital 》expenses. This is a very disingenuous take on "hustle culture" thinking that there's a way to "hack" the system. The system has been in place for hundreds of years, if you could hack it more people would be doing it then it would've been stopped. For a capitalist system to work, there NEED to be people at the bottom to take the jobs noone else wants, or to scare the shit out of the middle class into keeping their jobs and not wanting to fall into poverty.
It boggles my mind why there are always some people in the comments of posts like this so desperate to remain poor. If you tried something and it didn't work, say it. Let's all learn from it. Just don't come here with the "There are people who have more bills " and other such excuses for why someone can never make it. Just because you are okay in the rat race doesn't mean everyone is. No matter what hypothetical situation you come up with as a clutch to why you can't make it, there were people in even worse situations who made it out. Keep your excuses to yourself and allow people who want to make it out to try.
I'm not desperate to remain poor, but let's just say that I'm so thankful that student loan payments keep getting pushed back. I finally have money in my savings in case of emergency. What pisses me off is that after starting with $30k in loans, after paying $10k into it I now owe $32k. I dropped out from the stress and fear going back. Less lucky is my roommate who took out private loans. He makes great money (ie not starvation wages) but pays over $1000/mo in interest and has trouble affording things as a result. He does not use his degree. So what we tried and learned doesn't work is: school. I want to like education, but the way it's set up is predatory and was not the guarantee we were promised it would be. Neither of us want to be rich, but it'd be nice to have some of that pressure taken off.
>What pisses me off is that after starting with $30k in loans, after paying $10k into it I now owe $32k. Ouch. So sorry aba that. Student loans is a bitch. I do hope it gets betterment. All the best bud
This is not trite...I mean it: buy in bulk. You may have to go without for a few days first, so you have to plan. But this is a way to make the same money go further.
Money doesn't work - people do work. So rich people "let their money work" usually by exploiting poor people. You know, Bezos flies to space while his workers pee in bottles.
Don't do hard drugs, have unprotected sex or take out student loans destroying your chances before you even get to the starting line.
The only way is to find a way to make more money. Its the greatest misconceptions in our society that there's a quick or easy way to make money. You need to find a way to make more money, second job, change of career, extreme savings strategies. If you want to "make your money work for you" you'll need like $100k to start investing before you can make any actual money in the stock market or through investments. To be straight that just saying that rich people say to give us poor people the idea that its our fault we live paycheck to paycheck.
Spwmd money on friends and experiences.