Well, how?
The basic topic
It seems most people are obsessed with money. And it seems many do not know how to have money.
Money seems available for the taking. Sometimes. It is sort of like oxygen and cash in Warren Buffett style: “It’s like oxygen you know, it’s there all the time but if it disappears for a few minutes it’s all over.”
Taking?
What does it mean “Money seems available for the taking”? To get money, we need to trade something for it. Usually we trade time at a job for money. If we are fortunate enough to be able to save some funds, then we have the chance to broaden out to the world.
In some cases, trading work for money is not available. Poverty, lack of education or skills, insufficent opportunities, economic conditions, etc., are all barriers to obtaining money. Some of these can be overcome, sometimes it is difficult. The world is full of difficulties, so we need to find our way despite everything.
Work
I spent most of my working career as an employee of one company or another. That seemed the right thing to do, as that seemed what everyone else did. Later I realized that working for someone else often is a low barrier to entry, but in the end what I was doing was help others to get rich. I needed to find one or more ways for me to generate my own income.
So What Is Having
If I spend my money, I don’t have it. So, logically, the way to have money is to not spend it.
Not Spend?
Well, not completely. I do spend money on things. Utilities, food, repairs, and so on. And I do buy when appropriate. But overall, I found holding on to my money is the path to having money.
Buying income-generating assets is a worthwhile use of money. This is an example of spending money to make money. There are many forms of income-generating assets. Real estate is a common one; the one that I am partial to is dividend-paying stocks.
Dividend paying stocks are likely the most passive of all income-producing assets. With real estate there is usually the tenant hassle factor: one needs to find tenants, issue repairs when needed, evict tenants when necessary, and so on. Then of course there is property tax. We intend that all our expenses are outweighed by the income received, but that is not guaranteed.
With dividend-paying stocks, there are no tenants to deal with. There are no permits needed, no license needed, no zoning laws to contend with, no approval process, no exam, and so on. If one buys and own stocks, these stocks are yours wihout anyone else’s intervention or approval.
Building Up
So for me, buying and holding dividend-paying stocks is a simple way to generate passive income that increases without further effort for me. The income from the dividends tend to increase over time.
And Don’t Forget
For the U.S., on income of any kind, we must pay taxes. This is a given. Different kinds of income means different kinds of taxes (go figure). It is a time-honored effort try to legally reduce one’s tax burden. Sometimes I wonder if more time and effort is put into reducing/avoiding taxes than it would be to just pay the taxes due.
Be that as it may, having money is a great defense against the unknown future. Like having extra oxygen available when you need it.
Your take on having money? Let me know here.
The illustration from 1556 is of an auroch, now extinct, is considered to be an ancestor of domestic cattle. The caption reads “Urus sum, polonis Tur, germanis Aurox. Ignari Bisontis nomen dederant” (“I am Urus, Tur in Polish, Aurox in German; the ignorant ones gave me the name Bison”). The last auroch is said to have died in 1627. Courtesy Wikipedia.
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