The Skills That Make You Rich: Finance
More and more, I’m realizing there are certain skills out there that serve you twofold. The first way is to lower costs for something; the second is its potential to become a side business. I’m playing around with the idea of making a whole series out of this, as there are several skills that fit the bill. The skill I’m talking about today? FINANCE!!!
“Duh, Darcy. That’s why I’m on your blog in the first place. I KNOW having a healthier understanding of finance will make me richer.”
That includes framing it in the right way, Anonymous Reader. Not too many folks realize that flexing that finance skill gives you life on both sides of the coin (look at that! A very relevant metaphor!)
How It Lowers Costs
When you know the value of something, it’s really dang hard to spend more than that value number on it. You’ll know the difference between what’s reasonably priced, what’s overpriced, and what’s practically highway robbery. Case in point: the other day I got a new bookcase for my bedroom, which came courtesy of the free section of Craigslist. Sure, I COULD have just bought a $20 bookcase from IKEA and washed my hands of the matter. I didn’t because I knew I could get a better priced, sturdier, and higher-quality bookcase elsewhere.
And I did! The top image is one wall of my bedroom showing off my newly acquired bookcase. Fun fact: the second bookcase, dresser, table, and armchair also all came for free.
Not everything you buy will suddenly be second-hand, and you also won’t likely end up scrounging the town dump for expired food. Instead, you’ll cut out the unnecessary crap expenses that bring you no joy in the long run. You’ll rip those leeches clean off your body and say no to lining anyone else’s pockets but your own. There’s a power in that that’s denied to several Americans, let alone most of the world.
Best of all, you know that confidence boost you get from knowing your way around the finance world? It makes you more confident at recognizing when you can a better deal on clothes, tickets, or what-have-yous elsewhere… and refusing to bow down to peer pressure from ads or salespeople who try steering you astray. Yes, having more finance skill will definitely lower your costs.
How It Can Increase Your Income
A skill like this can also turn into a lucrative side business, if not an outright career. Money coaches and consultants like Tasha Kinnard, Jillian Johnsrund, and Tori Dunlap have found some eye-popping success by sharing their financial knowledge to others. To make it a non-problematic side business, I’ve seen several bloggers recommend getting a CFA designation, which is another option if you so choose.
But the absolute best way to put your finance skill to use is by using it to create an investment income stream. My recommendation is always investing in index funds, which historically net you 10% each year and doubles your money every decade. In your 20s, this means you need a whole lot less than your older peers do to get crazy-high net worth numbers. You might also use them for other investments if you do your due diligence and believe they’ll either match or beat that 10% return on investment (ROI).
Following my advice on here can get you to a six-figure net worth way before your 30th birthday comes around. Have you ever heard the phrase “The first $100k is the hardest?” This is it. With a system built to make the rich richer, you reaching that goalpost will make your net worth start snowballing like crazy.
I can vouch for this myself: after hitting $100k last year I did the math and projected I could safely reach $150k by the end of 2020. But that math wasn’t counting the performance my already-invested money would put on, which at the end of JANUARY puts my net worth at $120,000.
There’s gold in these here hills, and you now know how to best take advantage.
Keep on climbing; I’ll see you at the top of the mountain.