Apr
29
7 Simple Ways To Develop A Profit Mindset
Tags Making Money, Winning at Work 0 comments
Profit is a bad word to many, but to others if they can’t make a profit, life isn’t worth living.
Regardless of your feelings about profiting, your ability to make a profit will decide many factors in your life. It will determine what you eat, your quality of health care, where you’ll live, and what you’ll be able to do with your free time.
“The successful man will profit from his mistakes and try
again in a different way.†- Dale Carnegie
The power of profit makes it an important concept to understand and ultimately harness if we want to take control of our lives. If we don’t profit, we are leaving too much up to chance. We can’t get the knowledge we need. We can’t help others to the best of our abilities. And we can’t live our dreams.
You may be new to the idea of developing a profit mindset. So I’ve put together seven simple ways to develop the mindset so you can start profiting immediately:
1. Remember Interest is money earned - When you put money into the bank, it earns interest. Some argue that it’s not a lot, but the bank is the first place to start. You eventually want to move into Mutual funds and bigger investments. But when you are just starting out, the bank is the safest investment. Interest leads to more money. Each deposit becomes a little earner who brings back money to you as the interest accumulates.
2. Spend Interest, not principal - My father had a great saying for holding on to your money. ‘Spend interest, not principal’ What this means is your nest-egg should never be touched, instead, use interest. That way, your investments will continue to earn more interest.
3. Treat found money as savings - If you’ve ever gone through the attic or garage and found a 100 dollar bill. Woo Hoo! That’s found money. Inherit some money or get a paid bonus would be considered found money too.
The thing to do with found money is to immediately put the lions share into the bank or investments. Spend a little if you like, that’s fine. But be sure to get your investments handled first. Saving and then spending is the best of both worlds.
4. Buy a house - When you have a decent amount invested it is time to think about owning a house. A fixer-upper is a good place to start. A house will gain value over time. Don’t let the housing market scare you from never buying a house. The houses that are depressed right now will be worth a lot in the next 10 to 20 years.
5. Buy a modest dream house - Once, someone advised me to “buy as much house as the bank will loan you.” I think that is bad advice.
Sure you want to buy a house of quality, but be very conservative. When you stretch yourself out with high house payments, you aren’t compensating for when life comes along and whacks you on the head. People lose jobs, people get sick, sometimes a leaky roof needs a $10,000 repair. If you are stretched to the point of breaking on a house payment, you can’t afford much of anything else.
Therefore, it’s better to buy a house with a lot of wiggle room in the piggy bank.
6. Invest for long term, not short - Don’t buy into the latest trends. I’ve learned this one the hard way when I bought a bunch of Cisco stock in 2001. They don’t call it playing the stock market for nothing. If you are going to put your money on the line for an investment, think “how much will this be worth in 20 years?” If the answer is “not a lot” or “I don’t know”, then don’t invest. That means it’s not a good investment for you.
7. Find something to sell - Do you have a specialized skill at repairing something? You can purchase stuff that’s defective, fix it and sell it at a profit. I know a guy who collects old LCD monitors, repairs or tunes them up and resells them for $100 a piece. Often, he gets them for free, but then makes $100 a pop. Not bad money considering he makes less than $20 an hour when his day job is janitorial. This is pure profit that he socks away into the bank.
You too likely have specialized skills or knowledge you can sell at a profit. When you own your own product or service, your ability to profit skyrockets. It’s no longer dependent on the will or whim of employers.
For more info: If you are looking for some good books and resources on making personal profit, you might also want to check out JD’s Get Rich Slowly Post.
If you like this post, please vote for it on del.icious, StumbleUpon & Digg - I really appreciate it !
