Getting Back To Basics
Sometimes we need to go back to the foundations, because money, income investing and saving really are dead simple.
What makes it difficult is all the money “noise” we hear around us.
In this article we set out succinctly the 5 timeless truths about income investing. If you feel like you are losing your way, then return to this article to bring you back on track. Bookmark it if you have to!
Income Investing – 5 Truths
1. I nearly feel stupid having to say this, but the bedrock of all financial success is simply built on the following – ALWAYS SPENDING LESS THAN WE EARN. No amount of fancy math, investing expertise, fancy deals, business models or tertiary education can nullify this timeless principle.
2. Building an independent stream of income from wisely executed investments is a basic adult responsibility. It is not optional and has nothing to do with being clever, privileged or lucky. IT IS MY RESPONSIBILITY TO PROVIDE A PERPETUAL STREAM OF INCOME FOR THE FUTURE. It is not the government’s responsibility, it is not a societal expectation nor is it a right that any of us be supported by someone (including a spouse) or something else.
3. If we hold consumer debt, then we have been tricked, groomed and enslaved by consumerism. We need to simply forgive ourselves and IMMEDIATELY TREAT OUR CONSUMER DEBT AS A PERSONAL CRISIS. Eliminating this crisis requires our total unwavering attention until sorted.
4. HOLD INCOME-PRODUCING ASSETS FOREVER. Consumerism has even ensnared sensible folk into believing that selling-off the golden goose is logical. The rampart buying and selling of real estate, shares, bonds and businesses is by and large idiocy and making someone else very wealthy besides ourselves. Buying and selling more often than not, attracts unnecessary taxes, unnecessary fees and ignites dangerous emotions. Old money is wise money. With old money/wealth, the corpus can be then bequeathed generationally forever.
5. TIME AND PATIENCE ARE NON-NEGOTIABLE. In today’s immediacy-driven world, time and patience are universally sneered at as inefficient. Change and innovation are glorified at all costs. However, what is nearly always forgotten is that the effects of time and patience, in the context of investing wisely, are at first subtle and imperceptible …. but then quietly snowball into an unstoppable tidal wave of abundance. The power of time and patience is barely even noticeable within an initial 10 year time span. In this time. most folk have become financially bored and wandered off within those first 10 years.
Income Investing Is A Forgotten Art
Income investing has gone out of style in recent decades – growth style investing has been certainly the order of the day. Ask any modern growth investor and you will get a long list of compelling reasons as to why their way is the best way. Their arguments often including a compelling array of projections and theoretical graphs measuring paper profits to prove their point.
However, when we peel back all the noise, what we all need is income – steady, reliable, regular, passive, well diversified cash flow. Coins in our pocket every single day.
Income investing done well should produce steady, reliable & passive income streams irrespective of market and political gyrations.