Learning about financial concepts is crucial for building wealth and staying wealthy. Here’s what I posted on social media earlier this week:
4 Lessons Wealthy People Taught Me
1. An asset pays for itself and creates a monthly net profit.
2. When bankers say, “It’s an asset,” they mean it creates a profit for THEM.
3. Build Automatic Money Generators that don’t require your presence. (a special class of assets)
4. You are financially free when your Automatic Money Generators pay you more than you are spending.
One of my social media friends replied, “How does one create Automatic Money Generators?”
Here’s a little background. We have known each other In Real Life for nearly 10 years. She’s attended parties at our home, we attended her wedding, and we have talked numerous times in person. She’s not simply someone I met online. In the past few weeks she posted a question on social media, and when I responded mentioning a $5 solution, I received some version of “I can’t afford that.”
So I considered her situation and past reactions into my response. I wasn’t going to jump into booking a business presentation with someone who thinks $5 is too much to spend. I decided to start with some basic information and a question to gauge her level of interest.
I sent a private message: “I have just a few minutes to type right now, so this might be an incomplete answer. “Automatic Money Generators” are businesses, real estate, or other investments that generate profits for the owner every month, whether or not the owner shows up for work. The situation is otherwise known as “passive income” and always requires up-front money, energy, education (books or seminars), and time to create. (Like planting an apple tree, nurturing it until it bears fruit, and making sure someone is trimming and fertilizing the tree on an ongoing basis). Net-income producing real estate rentals, real estate tax liens, musicians who have songs on iTunes, and businesses like mine all qualify. Which one of those sounds most interesting to you?”
This launched a back-and-forth via texting, which included my recommendation of a library book to read. She loves to read, so reading a book is not stressful. Also, libraries loan books for free, so the money question is eliminated for this step.
We ended with her promise to look for that book during the library trip next week… and to let me know her opinion of it after she’s finished reading.
So now it’s in her hands.
In some ways she reminds me of a younger me.
One of my husband’s co-workers made an offhand remark about 20 years ago. She mentioned a book about finance that she liked. My husband and I didn’t have an extra $20 to buy our own copy. It was a newly-released book, so there weren’t copies available on the bookshelves of the charity resale stores in our area. We contacted the local library to put our names on the waiting list for that book, and we waited nearly 3 months for our turn to read it.
Reading those pages was a pivotal moment for our understanding of the power of leverage and the differences between self-employment and business systems.
When there’s a will, there’s a way. We waited for then read (I mean devoured) that book and others written by that author. If she’s truly interested in elevating her financial situation, she will find that book and read it quickly. I will discover if she is “coachable” by what she does in this situation.
The next move is hers. Her actions will reveal whether she is ready to move from dreaming to taking action toward a more prosperous future.
–LYnn Selwa, “The Rocket Science Coach” ™
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