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Making Your Money Work for You

Guest post by: Zeeman Haus

Article Overview: "What would you do if you won the lottery, son?" my dad asked me when I was twenty. My answer was to pay off all my bills and buy mom and him a bigger house. Taking a sip of his coffee I will never forget the look he gave me. He lowered his cup and simply said, "Why not start a business and buy us all one?" This line of thinking has affected my whole life from that moment forward.

Making Your Money Work for You

"What would you do if you won the lottery, son?" my dad asked me when I was twenty. My answer was to pay off all my bills and buy mom and him a bigger house. Taking a sip of his coffee I will never forget the look he gave me. He lowered his cup and simply said, "Why not start a business and buy us all one?"

This line of thinking has affected my whole life from that moment forward. Too many people look at their big windfall (that rarely comes) in terms of "getting caught up." A true entrepreneur sees the value of taking money and using it to make money. This is not to say that you shouldn't pay your bills, that's a sure way to ruin, however if given the opportunity to spend money or make your money work for you, the ladder makes more sense.

When someone mentions a savings account, I think of that as one step above grandma's mattress stuffed with bills. That money did nothing for her. The only difference is the 3% interest (if you're lucky) that you gain. Savings accounts are really just a way to keep your money safe until you can blow it on something or reach a monetary goal... then blow it on something else. That's really not making your money work for you at all. CDs and the like are only slightly better.

The three step plan I read recently talked about budgeting, getting out of debt and saving aggressively. I believe if you budget you don't get into debt and if you save you are just making money for someone else. Banks don't just offer you 3% for nothing, they use your money to make loans and purchases to grow their business and as a way to solidify their own credit. That might not sound exactly right but looking at international banking, it's fairly accurate. Banks are a great place to keep your money, but they are no place to make it.

Earning interest is good- paying it is something to be avoided if at all possible- on this everyone agrees, but no one builds wealth on interest. Not unless you have a last name like Gates, in which case 3% of 90 billion is perfectly fine. No, you have to use your money to build wealth. And you have to do so wisely.

Finding a business plan or rather a plan to gain a business for the up and coming entrepreneur, is a must. Waiting for your wind fall is not a business plan. Buying a house and paying one quarter of your income to the bank, one quarter to the car Loan Company and one quarter to your bills and incidentals isn't a bad deal if you can save that other quarter for your perfect business opportunity. In some ways this is your money waiting to go to work for you, which is still better than your money working for someone else. Most people do not think beyond next month's bills and use a lot of "if we can" financing. Meaning: "if we can work two jobs between us and I get that promotion we can save some money." Save your money first, put it to work for you and then get the house you want. Make your money work for you and not the bank.

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