Did you know that over the last 7 years, I paid off almost $50,000 in debt, create a passive income stream that pays me monthly, and also increase my Net Worth to over $100,000?!?
Not only that, I became completely debt free in April of 2016 and left my bank job on December 23rd of the same year.
I have gone from working over 80 hours a week for money to now working less than 5 hours per week for money, as an internet entrepreneur who helps other mothers create financial freedom.
I had a lot of help along the way, from young financially free entrepreneurs in their 20s, 30s, and 40s.
Here are 11 tips that I learned that changed my life on wealth, passive income and investing.
11 Tips From Young Financially Free Entrepreneurs on Wealth, Passive Income and Investing
Tip #1 – The Habit of Saving is Important (Not the amount)
You would think that saving a lot of money makes you rich, and saving a little won’t.
However, the key is not how much you save, it’s the habit of saving. So, every time you have money come into your life, you take at least 10% and pay yourself first (meaning you save it for investing).
If you are waiting until you have more money to save, then you will never be rich.
The reason you don’t have enough money to save, is because you don’t have a savings habit.
Even if you have to borrow an extra dollar every month just to save money, do that, and at least start saving every month. Make it a habit.
Tip #2 – Understand The Rule of 72 and How Interest Rates Work So You Can Grow Investments and Grow Debt
The ‘Rule of 72’ is a way to determine how long an investment will take to double.
72 / Rate = Years to Double Your Money
72 / 14.99 = 4.8 years to double your money
Now you can see why it’s important to lower all of your debt interest rates as low as possible, and to increase the rate of return on your investments.
Tip #3 – Play Cash Flow (Board Game created by Robert Kiyosaki) every week until you can win the game in 30 minutes or less every time
This game really had me focus on financial freedom, rather than what everyone else does…focus on making more money so they can spend more money.
Financial Freedom = Passive Income > Expenses
When you play the game, you have to increase your passive income to be greater than your expenses.
If you’re passive income does not increase, you cannot get out of the rat race.
This helped me really focus on my passive income.
Tip #4 – 8% is the Minimum Return for Real Estate Investors, Don’t Invest in Real Estate Overseas Unless You Have a Resident Manager
So I was thinking of buying property outside of Hawaii at one point, and I talked to my wealth real estate investor friend, and he told me this advice.
First of all, I wanted to buy the house I lived in, but it was on the market for $1,000,000+. So I needed an investor to go in with me.
However, when I asked my real estate investor friend, he said that no investor would go in on that deal, because they would only be making 4%.
Then I looked to make money buying property in Las Vegas or LA, and then he advised me not to invest overseas unless I had a resident manager. The reason is if you have only one house or condo that you are renting, then if something goes wrong, you have to rely on a Property Manager, and they are not going to care about 1 small property owned by someone far away.
Repairs will be more expensive, and your tenancy rates will be worse, because they won’t look for new renters right away. You will be low priority.
The only way to keep expenses down is to have a resident manager.
Tip #5 – Have a Big Burning Why
If you don’t why you want to be financially free, then when obstacles come (and they always do), you will not get past them.
A burning desire fuels the energy you need, to learn what you have to learn, to make mistakes and learn from them and keep on going, no matter what.
My friend’s big why was that he felt embarrassed by his lack of wealth, and had great pride. And he also wanted before his dad died, so he had a time limit too.
Tip #6 – Negotiate With Your Creditors (Debt, Credit Cards) to Lower Your Interest Rate
So, when I got this advice, I had at least 3 credit cards that I had debt on. And the interest rates were all pretty high. When I heard this advice, it really helped me. I used it to lower the interest on ALL of my credit cards…so it works.
Tip #7 – Track Your Net Worth
Tip #8 – Set The Next Big Goal Before The Current Big Goal is Achieved
Tip #9 – Do The Mental Work
Tip #10 – Only Take Advice From People Like You, Who Already Do What You Want To Do
Tip #11 – READ, READ, READ
Rich Dad Poor Dad by Robert Kiyosaki
The Cash Flow Quadrant by Robert Kiyosaki
Money is My Friend by Phil Laut
The Richest Man In Babylon by George Clason
Secrets of the Millionaire Mind by T Harv Eker
Your Money or Your Life by Joe Dominguez & Vicki Robin
It’s Not About The Money by Brent Kessel
How To Make A Hell Of a Profit and Still Get To Heaven by John DeMartini
The Values Factor by John DeMartini
You Can Heal Your Life by Louise L. Hay