Money

5 questions that’ll help your buying decision process

08/04/2025 by Roy Sutton Leave a Comment

Today, I am considering the buying decision process.

If you want to create wealth, it starts with being sensible with your money.

So, the buying decision process is essential.

Buying decision process:

Now, how can you be expected to save money when you don’t earn enough to make ends meet as it is?

I’m guessing you may have asked yourself that question at least once, dear reader? If you have, you’re not alone. It’s a common challenge.

However, whilst some people may struggle financially, it’s also true that far too many people squander their money buying items they don’t need and probably will never use, often in an attempt to impress people they don’t even like.

For such people, their buying decision process is usually limited to whether they still have enough credit left on their credit cards.

Well, the mantra “Have Plastic; Will Purchase” is not a good one if saving money is one of your goals.

You can earn a decent income, and yet a lack of money management skills and poor buying decisions will result in you never achieving financial freedom. Poor money management skills will condemn you to a life of being poor.

So it’s essential that you learn to manage your money properly if you want to avoid long-term poverty.

Avoid the ‘I’ve got to have it’ approach:

So, be honest with yourself: how often do you buy things you didn’t need?

Stuff that you weren’t even looking for, but it was there, and it looked nice, and you thought, I’ve got to have it. Out pops your ‘flexible friend,’ and the item is yours. A brief period of gratification follows, and then the item is largely forgotten.

How often do you buy things you never use?

Take a look at your wardrobe. I’ll bet there are a few items in there that still have the store tags on them. Never used, and they’ve probably been there for quite some time, I suspect? Would I be right?

‘I’ve got to have it‘ is a great way to waste all your money. With this approach, you’ll enrich other people at your own expense. Now how could that possibly make sense?

Credit cards: Weapons of mass wealth destruction:

How often do you buy things you can’t afford with money you don’t have?

It’s true, credit cards can be a convenient means for making payments, of course, but they can also be weapons of mass wealth destruction. That’s a fact, dear reader.

When it comes to the buying decision process, most of us are driven more by a desire for gratification than by any sensible approach to managing our money carefully.

Most of us are guilty of buying more than we need. Many of us are guilty of buying items we seldom use, if at all.

If you’re like this, dear reader, then you’re not alone, I can assure you. However, that’s not a good thing.

The disciplined approach:

With discipline, you can hang on to more of your money and build capital, which, eventually, will start generating an income all of its own through interest payments on deposits and bonds, dividend payments, and capital growth on stocks and shares.

Still, we’re getting ahead of ourselves.

The underlying message I offer you today, dear reader, is that:

You should establish for yourself a buying decision process that will allow you to control your expenditure.

Essentially, before you buy anything, you need to ask yourself a series of tough questions to gauge whether the purchase makes good sense.

And what are those questions?

The questions to ask before making any purchase:

There are, in fact, five questions you should ask yourself before making any purchase, as follows:

Do I need it? Honestly?
Will I use it? Honestly?
Can I afford it? Honestly?
If I didn’t have it, would it matter?
Does it represent value for money?

If you answer ‘No’ to the first four questions, the fifth question is irrelevant.

A negative on all or even most of the first four questions means don’t buy the item. Simple!

And even if you do think you need it, never buy anything if you do not have the money to pay for the item right now. Never, ever incur debt for a discretionary purchase.

It’s better to do without than to run up debt on a credit card to pay for discretionary purchases.

The compounding effect of high credit card interest rates can quickly turn a small debt into a large one.

The ‘value for money’ question is only relevant when you can answer every other question in the affirmative.

Nevertheless, you should never buy something that’s not also good value for money.

That is, you should never overpay for anything.

Overpaying means the price is inconsistent with the value on offer.

Let the answers to the questions guide you:

To ensure your buying decision process is sound, you must always ask these questions.

Let them be your purchasing guide, and you’ll be in a better position to start saving money and watch it grow.

Once it starts growing, you’ll be on your way to building your own personal wealth.

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Thank you.

Roy Sutton

Roy Sutton is a writer, content creator, digital entrepreneur, and international traveller. Formerly, a CEO, corporate business executive, management consultant, and electronic systems engineer with a background in telecommunications and IT. His blog aims to both inspire readers to achieve their best lives and entertain them with the humour we all crave.

How to turn your yearly income into your monthly income

07/25/2025 by Roy Sutton

Would you like to learn how to turn your yearly income into your monthly income?

Perhaps you are one of those people who feel you should be earning more than you do.

To have enough money to enjoy the lifestyle you’d love?

You’d like a higher income, but you’re unsure how to achieve it.

Perhaps you feel that big money never flows to people like you.

A natural assumption, possibly, but it’s wrong.

With the right approach, you too can have significantly more money than you have now. Yes, you can become truly wealthy.

The question is, where do you begin?

You can start by understanding the Law of Compensation. In the video included here, the self-help guru Bob Proctor explains that income is earned according to the Law of Compensation.

How to turn your yearly income into your monthly income:

The Law of Compensation:

Bob explains that the Law of Compensation states that the amount of money you earn will always be in exact ratio to the following three points, namely:

The NEED for what you do.
Your ABILITY to do it.
The DIFFICULTY there would be in REPLACING YOU.

Now you have no control over points 1 and 3, so you must concentrate on point number 2.

You must constantly hone your skills and become a master of whatever you do.

That said, becoming a master of what you do is only part of the solution.

To earn more, you must decide on your strategy for earning money. In the video, Bob Proctor explains that there are only three strategies for earning money.

The Strategies for Earning Money:

So what are the three income-earning strategies? Bob Proctor describes these as M1, M2, and M3. In more detail, that means:

M1: Trading your time for money:

Essentially, this is paid employment, and it is the way that 96% of people earn an income.

The problem is that, unless you’re a Wall Street banker, you’re unlikely to get rich this way. It probably explains why you’re not rich right now.

M2: Invest Money to Earn Money:

Assuming you’re working for the man as a salaried employee, you can start saving, and gradually, as your savings grow, you can invest your money in stocks, bonds, and property, and over time, your investments will start generating an income of their own.

That’s great, but you need to know what you’re doing. If you have nothing now, it will take some time before you can start generating anything approaching a useful extra income.

Of course, if you have a large sum of money available right now, then this might be a solution; however, for most people, it’s not feasible, which is why only around 3% of people make an income this way.

M3: Multiply your time with multiple sources of income:

Establishing multiple income streams is a great way to start generating substantial income.

Even fewer people make an income this way, around 1%, but that has more to do with the fact that most people fail to recognize its potential.

Now, let me make one thing clear: having multiple income streams does not mean working multiple jobs.

It means having income streams that will earn money for you even while you’re sleeping. And as the legendary investor Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.“

M3 Income Strategy:

M3 is the income strategy that will help you earn far more than you earn now. Certainly, it will if you do it right.

Bob Proctor offers the example of Network Marketing (also known as Multi-Level Marketing), whereby not only do you sell products, but you also create a network of sellers, which means that when they sell, you receive a portion of the commission generated from those sales.

The best network marketers have made a significant amount of money this way, but it’s not the only solution to generate multiple streams of income.

The internet now offers multiple ways to get rich online.

For instance, you can use Amazon as a marketplace and sell products with fulfilment (delivery to the customer) handled by Amazon.

You can also generate commissions through affiliate marketing with Amazon, as well as other platforms like ClickBank and Commission Junction (CJ). These can be great ways to make money whilst you sleep.

Blogging and Vlogging are also other ways to produce income streams.

There are numerous ways for the ambitious and determined. It’s never been easier for people prepared to put in the effort.

So listen to what Bob Proctor has to say and be inspired to take action now.

The Game of Money-Making:

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Work and Money: Which is more important?

07/22/2025 by Roy Sutton

Today, let’s discuss work and money.

How often are we tempted to do something just for the money?

Indeed, I’ve done many things for money alone, and perhaps you have too, dear reader.

In my experience, it has always proved to be a mistake because no amount of money can compensate you for the drudgery of doing something you hate.

And more importantly, if you hate what you’re doing, you’re unlikely to do it very well, are you? It’s hard to feel motivated to do something you hate, surely?

Work and money:

My message today is simple. If you don’t enjoy what you’re doing, you won’t do it well. And if you don’t do it well, eventually you’ll come unstuck. And so it’s all going to end in tears, very probably.

Conversely, if you genuinely enjoy what you’re doing, it’ll hardly seem like work at all, and you’ll be motivated to do it well and produce the best results possible.

Do it well, and people will notice. Once they start to notice, your career will begin to move forward and upward. Every hiring manager wants someone with a track record for delivering exceptional results.

So never do anything for money alone. Money is nice to have, of course, and none of us can get by these days without it. However, life’s too short to spend your time doing something you hate.

Find a job that’s right for you first, and then work hard to master your trade. Improve at it, become more valuable, and then maximise your income.

When you’re producing exceptional results, never forget to ensure you’re getting paid what you’re worth.

It should never be about the money, but that doesn’t mean you should ignore your value and undervalue yourself. It’s about work and the value you can add first, and then it’s about ensuring you’re suitably rewarded for the value you deliver.

Be a dedicated professional, of course, but don’t be a mug. Just because it’s not about the money doesn’t mean you should ignore the money.

You may not be driven by money, but it’s fair to accept the reward for your efforts.

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3 things you need to know about money

07/21/2025 by Roy Sutton

Today, I’d like you to consider some key things you need to know about money, dear reader. In other words, think about what it all means to have money.

It’s natural to dream about being rich, of course.

Most people dream about being able to buy whatever they want and go anywhere and everywhere they’d like to go, possibly even in a private jet.

The attraction of having that pot of gold is why a lot of people will chase every rainbow.

However, while money is necessary for sustaining life, there are some things you should understand about money.

Here are three of them:

Things you need to know about money:

1. Having money brings its own pressures:

A great fortune is a great slavery. ~Seneca

It’s reasonable to want to create wealth and build a fortune. Everyone wants to feel financially secure. Why wouldn’t you?

However, being financially secure doesn’t mean you’ll have a life without problems and worry.

You’ll encounter different problems and other things to worry about.

No one goes through life without problems. Dealing with problems and challenges is an inevitable part of human existence.

Put simply, having money brings its own pressures.

Once you’ve got money, your biggest concern will be to ensure that you hang on to it.

Inevitably, that means you can become a slave to managing your money, preserving its capital value, and protecting your fortune.

Being wealthy may be a nice problem to have, but it’s no less of a problem for that.

So keep it all in perspective.

2. Money can never be more important than people:

We love to earn money; who doesn’t? It gets you things. ~Katie Price

Earning money is excellent, as it allows you to buy both the things you want and the things you need. However, money won’t take care of you when you’re ill.

Yes, it might enable you to hire some help.

However, that’s not the same as having someone around who genuinely cares about your well-being. That someone for whom you matter much more than money ever will.

In my experience, while money is important, nothing in our lives matters more than friends and loved ones. Human beings are social animals. So, only people really matter to us.

Never focus on money to the point where you neglect the people who should matter most to you. Forget about them, and eventually, they will forget about you.

You can have all the money in the world, but you’ll have nothing at all without friends and loved ones.

Please go out and earn as much money as you can, and enjoy it too. Fill your boots, as they say.

However, always maintain a sense of balance in your life and make sure that you allocate some time for the people who matter most to you.

An investment of your time in the people you love is an investment that will pay dividends.

3. Money is a precious resource, so use it wisely:

A penny saved is a penny earned. ~Benjamin Franklin

I make no apology for repeating Benjamin Franklin’s money mantra, repeated frequently by generations of well-meaning parents to their profligate children. It’s as valid today as it was in his day.

Whether Franklin was referring to money saved when making purchases or money saved from income is not obvious in his statement, but that doesn’t matter.

The underlying point is that you must be cautious with your finances, as saving money is the key to building wealth and achieving financial independence. No one ever got rich by wasting their money.

Money, like time, is a precious resource, so use it wisely.

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3 ways for getting rich

07/16/2025 by Roy Sutton

Today, I am exploring the idea of getting rich.

You should never take money too seriously, dear reader, but, equally, you should never underestimate the importance of money either. Let’s face it, in the modern world, money is as essential to sustaining life as oxygen. That’s a fact, whether we like it or not. So getting rich is a worthy topic for discussion.

By getting rich, I mean achieving financial freedom. I think that should be everyone’s goal, if only so that they can enjoy their old age. In my opinion, there’s nothing wrong with getting rich, provided money does not become your obsession. That is, you should have money in your head but not in your heart.

Now getting rich is easier said than done, of course. It requires effort on your part and a lot of determination, too.

Nevertheless, getting rich is also easier than it might first appear to be.

So today I offer you three ways for getting rich that are available to anyone and everyone, and they will all help you to achieve financial freedom.

Getting Rich:

1. Solve problems for people:

Working for someone else may make you a living, but having your own business can make you a fortune. The only way most people can become seriously rich is by setting up a business of their own. It can be done, and people do, very successfully, and you can do it too.

Essentially, business is all about solving problems for people in exchange for money.

Businesses create products that solve problems for customers. The customer buys the product, and the business makes money. You need to ensure that your revenues exceed your overheads, but in essence, business is that simple.

If you want to make money in business, look for problems to be solved, and there you’ll find commercial opportunities.

One person’s problem is another person’s business opportunity.

However, do make sure that every product you offer solves a problem for your customers.

That means understanding the needs and wants of your target customers and always asking the question, “What problem will this product solve for my customers?”

2. Risk leads to reward:

If you want to make serious money, you cannot avoid an element of risk. That’s a fact of business life.

Entrepreneurs have to be risk-takers by definition.

However, that doesn’t mean you take crazy risks. It means taking calculated risks by doing your homework, proper planning and market research, and using your business skills to weigh up the pros and cons of every opportunity.

Risk is simply the probability of you getting an outcome you don’t want.

However, it’s a fact that risk and reward go hand in hand. The greater the reward on offer, the greater the risk you must potentially take to achieve it.

Your attitude to risk is important here.

If a given risk makes you very uncomfortable, then it’s probably not worth taking. It will just lead to too much stress for you. Some people can live with huge risks, while others cannot cope with that much pressure.

Either way, it doesn’t matter. If you can’t cope with significant risks, then avoid them. Just look for something with lower risk and with which you can manage. Even small risks can lead to great riches.

Remember, we all need a mix of certainty and uncertainty in our lives. Business requires you to live with the latter, at least to some degree.

3. The magic of compounding:

Once you’ve made some money, you must put it to work for you if getting rich is your aim.

And putting money to work is all about taking advantage of the magic of compounding.

Compound interest can have a powerful effect on your money.

For instance, if you invest $1,000 at 2% for 10 years with annual interest reinvested, it will be worth $1,219 at maturity.

However, if you invest the same $1,000 over the same period at 10%, then you will earn $2,594, assuming annual interest is reinvested. That’s over a 100% difference over the 10-year period.

Over 20 years at 10%, your $1,000 would have turned into $6,727, assuming annual interest had been reinvested.

So remember, the interest rate and the longevity of your investment both matter if you’re trying to build a capital sum.

So if getting rich is your aim, then start by investing as early as you can, be disciplined, and make regular contributions to build that nest egg.

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How to become rich through your work

04/07/2025 by Roy Sutton

How to become rich through your work? This is a question many people ask. Some people get rich, but somehow you don’t, dear reader. Would that be true? Why? You work hard, but you’ve got very little to show for it, right?

How is it that other people succeed and get rich, but you never seem to make any progress at all?

Perhaps the question you’ve been asking yourself is, what’s the real link between working hard and getting rich?

Well, give me a couple of minutes of your time, dear reader, and I’ll tell you what I’ve learned about work over the years and how it’s linked to the generation of real wealth.

How to become rich:

What is work?

First off, as I’ve said many times before:

Work is simply doing stuff for other people in return for money

If you enjoy your work and it comes naturally to you, then you’ll do it well. If you do it well, then people will notice. And once people start to notice, then increasingly you’ll be in demand.

The greater the demand for your services, the more you’ll get paid. In short, your value will increase.

If you truly enjoy your work and it becomes your passion, then it won’t seem like work at all.

However, if you work for a single employer, then essentially you’re trading your time for money, regardless of whether you enjoy your work or otherwise.

Even if you work for multiple employers one at a time, the effect is the same. You’re simply trading your time for money. It cannot be scalable because, as an individual, there’s only so much you can do in a given period.

There’s nothing wrong with trading your time for money, of course, and it’s the way that most people earn a living. However, you’re unlikely to get seriously rich that way.

Working for an employer will certainly make you a living, of course, but unless you work on Wall Street or in the City of London, that’s about all.

Serving the many:

To earn serious money, you need to be doing stuff for many people simultaneously. The more people you can serve simultaneously, the more money you can make.

The obvious question in your mind now will be, how’s that done?

Well, creative people serve many people simultaneously, don’t they?

For instance, if you write a bestselling book, record a bestselling song, or produce a bestselling DVD, these would all add value to the lives of many people simultaneously.

When people buy a book, a song, or a DVD in their millions, then, if you’re the creator, you can make millions of dollars in the process. Just ask JK Rowling, Paul McCartney, or Ricky Gervais. They’ve all become rich through their creative work.

Then again, not everyone can write, sing, or perform. Perhaps you’re a designer?

Suppose you design furniture, say a chair perhaps?

You produce a fabulous design and offer it to a furniture manufacturer. They really like it, and they want to use it, but you hold the intellectual property rights (IPR) because it’s your design. So the manufacturer must pay you a royalty when the design is used for every unit sold.

If that chair becomes very popular and sells in the millions, your ongoing royalty payments can add up to something quite substantial. Replicate that with many designs, and you could get very rich indeed.

In this case, the example is furniture, but the same would apply if you designed anything. For instance, the man who designed the retroreflective safety device known as cat’s eyes in Britain got very rich through his design. Fashion design is another area where serious money can be made from your designs if they become popular.

The value of the IPR:

The trick with creative work is to understand the law around copyright and intellectual property rights (IPR) and make sure you’re rewarded for your work through royalties.

The advantage of creative work is that the series of royalty payments can have a very long tail. Your work can be the gift that keeps on giving for years and years.

Take a song like Imagine by John Lennon.

John Lennon wrote that song around 1971, but we still hear it regularly on the radio and television to this day. So despite the fact that it’s been over 40 years since Lennon’s tragic death, the song still earns money for his estate, i.e. his family. Now that’s a real legacy for them.

Build your own business:

Starting a business and selling products by the thousand is another way to serve many people simultaneously.

If your business can produce products that provide your customers with genuine solutions to their problems, then there is serious money to be made. Problems are an opportunity to make money if you can offer suitable solutions.

Your business will employ people who are trading their time for money, but through your business, you’ll be serving the many simultaneously, and you can enrich yourself in the process.

The message here:

The takeaway message for you today:

If you work one-to-one, you’ll make a living, but if you can work one-to-many, you’ll make a fortune

Whether it’s becoming a creative person, a performing artist, or starting a business, serving the many is the real route to riches.

It’s not easy, of course, but it can be done, and people do. With a little self-belief and a lot of hard work, you can too.

So when are you going to get started?

Go on, have a go! Serve the many, not the few.

REMEMBER: It’s better to try and fail than to spend your life wondering what might have been.

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Thank you.

50 ways to make some extra cash

04/06/2025 by Roy Sutton

If you’re looking for some interesting ways to make some extra cash, dear reader, then you might find this blog post helpful.

We live in challenging times, and all but the wealthiest people could use a little extra cash, I’m sure.

In this post, I aim to offer you some ideas that you can explore further and find something that might work for you.

So, here are 50 interesting ways to make some extra cash.

I hope there’s something here that you could turn into a side hustle.

50 ways to make some extra cash:

1. Creative skills:

Rent out your creative space: studios, art supplies, and musical instruments.
Pet portraits: paint, draw, or even sculpt other people’s furry friends.
Custom greeting cards: hand-drawn, themed, or even for pets.
Design funny t-shirts: Sell online or at local markets.
Write and sell song lyrics: Collaborate with musicians or singers.
Make and sell crafts: Jewelry, soaps, pottery, knitted goods.
Offer calligraphy or lettering services: For invitations, weddings, or signs.
Design logos or brand identities: For small businesses or startups.
Compose jingles or theme music: For podcasts, YouTube channels, or events.
Write and illustrate children’s books: Self-publish or pitch to publishers.

2. Unusual services:

Rent out your driveway or parking space: Hourly or monthly.
Professional line-standing: Wait in line for hot tickets or releases.
Become a human billboard: wear branded clothing, or carry signs.
Offer furniture assembly or handyman services. Fix leaky faucets or assemble IKEA shelves.
Sell your unused vacation days: Some companies allow this legally.
Rent out your unused storage space: For seasonal items or other people’s belongings.
Be a taste tester: For food companies or research studies.
Do laundry or ironing for busy professionals: Pick up and drop off.
Offer pet-sitting or dog-walking services. Build a loyal clientele.
Rent out your bike or car on weekends: When you’re not using them.

3. Online gigs:

Do micro-tasks online: Short, repetitive tasks like data entry or transcription.
Become a virtual assistant: Manage schedules, emails, and social media for busy people.
Offer online tutoring or language lessons: Share your knowledge in any subject.
Test websites and apps: Give feedback and earn per project.
Write and sell articles or blog posts: For content mills or niche websites.
Create and sell online courses. Share your expertise on any topic.
Do freelance graphic design or web development work: Find clients online.
Manage social media accounts for businesses: Schedule posts and engage with followers.
Become a voice-over artist: Read audiobooks, narrate explainer videos, or do commercials.
Sell your stock photos or videos on platforms like Shutterstock or Getty Images.

4. Other ideas:

Become a movie extra.
Sell your unique recipes.
Rent your parking space.
Rent out your camera gear.
Become a mystery shopper.
Collect and sell scrap metal.
Sell your hair to wig makers.
Offer guided tours of your city.
Create and sell custom poetry.
Offer personal shopping services.
Rent your car as advertising space.
Rent out your tools for DIY projects.
Sell vintage or unusual items on Etsy.
Participate in medical research studies.
Rent out your spare bedroom on Airbnb.
Organize and sell garage sales for others.
Rent out your greenhouse for plant lovers.
Sell your old clothes, books, or furniture online.
Enter contests and sweepstakes (research legitimacy beforehand).
Start a blog and earn money through advertising or affiliate marketing.

Conclusion:

Remember, these are just suggestions! You’ll need to do your research to ensure legality and safety, of course. Nevertheless, have some fun exploring the options that suit your skills and interests.

Let me say, these are just some ideas. There will be plenty more. I encourage you to explore a variety of ideas based on your interests and resources.

So, consider things like:

Local needs and opportunities: What services are lacking in your community?
Your hobbies and skills: Can you turn a passion into a side hustle?
Tech-savvy options: Are there online platforms or apps you can leverage?
Unique talents or experiences: Do you have anything that sets you apart?

Think outside the box. Be creative and resourceful, and don’t be afraid to try something new.

You might just discover a wonderful way to make some extra cash that suits you down to the ground. Happy earning, and may the year ahead be filled with extra cash for you.

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Thank you for your support, dear reader.

Types of debt and why they matter

03/02/2025 by Roy Sutton

If you’re just starting your financial education, then a good starting point would be to understand the different types of debt and why they matter.

I categorize debt as either good debt or bad debt.

Understanding the difference between the two is essential if you don’t want to remain poor all your life.

Do you carry some debt, dear reader? If you do, you’re not alone.

Now you may think that debt is just part of life, and you may even believe that debt can’t be avoided.

Debt is certainly very hard to avoid; that much is true.

However, don’t forget that personal debt is a burden on us because it has to be serviced and eventually repaid.

Yes, it may be a burden you can’t avoid, but it’s no less stressful potentially for that technicality.

For emphasis, let me repeat, in my opinion, there’s good debt and then there’s bad debt.

The obvious question is: when is a debt considered bad debt? To put it another way, when is debt a bad idea?

Let’s consider some examples of debt.

1. Secured Debt:

Buying a house is an example of secured debt.

When buying a house, most people need a mortgage, which is of course debt.

However, as long as you don’t overstretch yourself, mortgage debt is usually manageable for most people. And a lender will rarely allow you to overextend yourself these days.

With a mortgage, the debt is secured against your property, so the risk for the lender is small.

If you fail to repay the mortgage loan, a lender simply repossesses the property and sells it to recover their money.

So because the associated risk to the lender is low, interest rates on secured debt are low too.

Coupled with long repayment periods, typically around 25 years, the monthly repayments on a mortgage are not significantly different from what you might pay if you rent a property.

So, borrowing to purchase a property is good debt because eventually you’ll repay the debt and own the property, assuming you repay in full.

It’s good debt because it results in the long-term acquisition of a valuable asset.

You need a roof over your head, of course, so buying with a mortgage makes good financial sense because at least you’ll own the property in the future.

And with luck, you’ll enjoy some capital appreciation on the value of the property too. That’s not guaranteed, of course, but historically, that’s been the trend for those holding property assets for an extended period, certainly in the United Kingdom.

In summary, secured debt bears the lowest interest rates and leads to the acquisition of a valuable asset. So in my opinion, that makes it a good form of debt.

2. Unsecured debt:

When is debt a bad idea? The simple answer is that when it’s an unsecured debt.

And what’s unsecured debt?

It’s a debt against which nothing valuable has been put up as security.

If the borrower fails to repay, the lender has nothing it can repossess to sell on to recover the balance outstanding. So for the lender, that represents increased risk.

And because unsecured debt has no form of security to compensate, the interest rate charged by the lender will be high, and sometimes very high.

The interest rate charged reflects the risk to the lender. The higher the risk, the higher the interest rate applied.

Lenders recognize that there’s a risk that a proportion of their clients will fail to repay unsecured loans, so those who do make the repayment in full have also paid a premium to protect the lender from any losses they might have incurred due to non-payment by others.

There will be occasions when unsecured debt is unavoidable.

For instance, young people just starting out might need some basic items of furniture for their homes. A bed would be a good example. You must have one, and if you can’t afford it, then you might need to use a hire purchase arrangement. Handled with care, then this shouldn’t be a huge problem. But care is essential.

3. When is debt a bad idea?

So when is unsecured debt a bad idea?

Put simply, when you start buying with unsecured credit that which you could live without. That gadget you couldn’t resist or those shoes that looked nice in the store. Non-essentials you could have lived without until you had saved the money to pay for them.

You know the experience, I’m sure. You see something you can’t resist, out pops your flexible friend, and an impulse purchase is made before you’ve thought about whether it was a good idea or not.

The reckless use of credit cards, store cards, and payday loans can be a disaster because this type of debt is not secured against anything, so naturally, the associated interest rates applied are very high.

Credit card or store card debt can bear interest rates of around 30% or more.

In the UK, payday lenders have been known to charge interest rates equivalent to 3000%, 4000%, or even 5000%.

I find it hard to believe people fall for these loans, but they do. I guess if people are desperate sometimes, perhaps they feel they have little choice.

4. The magic of compounding:

Why does this matter? The simple answer is the magic of compound interest.

The compounding effect of high rates of interest will quickly turn small sums borrowed into enormous sums owed.

For instance, if you borrow $1,000 at 3% interest, after five years you’ll owe $1,159, assuming nothing was repaid.

However, if you borrow $1,000 at 35% interest, then after five years you’ll owe $4,484, again that’s assuming nothing was repaid.

The difference is a massive $3,325. And more importantly, the value of your debt has also quadrupled.

So when interest rates are high, even if you make minimum payments, your debt can grow rapidly if you’re not careful.

And that’s when you can become enslaved by your debts.

And that’s why it matters. Ultimately, this burden can become very stressful.

5. Manage your money:

Far too many people borrow money in the form of unsecured debt to purchase discretionary items. That’s items they could live without if push came to shove.

Wasting money in this way is a bad move. Not just bad; it’s seriously stupid.

I recommend that you follow this simple rule:

If you can live without it, never use debt to buy it.

Yes, of course, it’s nice to have the latest smartphone or the latest television or whatever but is it worth the pressure of unnecessary debt?

When high rates of interest start pushing up the sum outstanding significantly, you have to ask yourself, will the burden of this unnecessary debt still seem worth it? I doubt it.

Wouldn’t it be better to wait until you’ve saved up the money to make the purchase instead?

Wouldn’t it also be cheaper in the long term to save up and buy the product when you have the money? You’ll appreciate the item so much more too.

The message is simple:

Manage your money or your money will manage you:

6. Debt is a form of slavery:

Being indebted is just a form of slavery. It’s as simple as that. And, once again, that’s why it matters.

For as long as you owe money, you can never be truly free.

If you’re debt-free, then you’re stress-free too. Wouldn’t you prefer to be debt-free and stress-free?

Good debt will help you, but bad debt will make your life a misery.

7. Conclusion:

Put simply, there are two types of debt, good and bad.

Debt is either secured or unsecured.

Interest rates on the former will be relatively low, whereas interest rates on the latter can be very high.

Interest rates matter because of the compounding effect.

Unsecured debt can be the road to the poor house, particularly if you use it to buy the stuff you could live without with credit that bears interest rates that are very high.

The type of debt that’s bad will enslave you, and it’ll become increasingly stressful.

If you only take one message away from this article, it is to avoid bad debt.

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How to Become Wealthy in 5 Years: A Roadmap for Growth

01/27/2025 by Roy Sutton

This article explores how to become wealthy in 5 years.

Wealth building often evokes images of overnight success and incredible riches. While such scenarios may exist in rare instances, they are far from the norm. True wealth, encompassing financial abundance and personal fulfilment, demands a more nuanced and strategic approach.

This article aims to debunk get-rich-quick myths and unveil a practical roadmap for building sustainable and meaningful wealth within a five-year timeframe.

The journey begins with clarifying a definition of wealth.

Everyone’s idea of what wealth means is different. For some, it might be about financial freedom, early retirement, and accumulating assets. For others, it might be achieving a degree of affluence to live comfortably.

Defining your “why” helps you navigate financial decisions and avoid chasing empty metrics.

Next, assess your current financial standing.

Track your income, expenses, and debts. Knowing where you stand is crucial for crafting a realistic plan.

Now, consider the core principles for wealth building:

DISCLAIMER: This essay is for informational purposes only and should not be considered financial advice. Always consult with a qualified professional before making investment decisions.

Part 1: Financial Wealth: How to Become Wealthy in 5 Years:

Cultivate a saving mindset: This is the bedrock of financial health. Aim to save 15-20% of your income every month. Automate a portion into savings or retirement accounts to make it effortless. Prioritize needs over wants and cut back on non-essential expenses. Remember, small savings can snowball over time.
Optimize your income: While saving is crucial, maximizing your income accelerates wealth building. Seek salary raises, promotions, or upskilling opportunities within your current field. Explore avenues for additional income, like freelancing, side hustles, or investing in rental properties. Diversifying your income streams mitigates risk and creates opportunities for exponential growth.
Master debt management: High-interest debt can cripple your financial progress. Prioritize paying off high-interest debts like credit cards or payday loans. Consider strategies like debt consolidation or snowballing (focusing on smaller debts first for momentum).
Embrace the power of investing: Put your savings to work! Invest in assets with the potential for long-term growth, like stocks, bonds, or real estate. Start with low-risk, diversified options like index funds and gradually venture into riskier ventures as your knowledge and comfort level grow. Seek professional guidance when necessary. And unless you’re already an expert, it will be necessary.
Educate yourself: Knowledge is power, especially in finance. Read books, attend workshops, and consult financial advisors to broaden your understanding of managing money, investing, and tax optimization. Continuous learning fuels informed decisions and empowers you to take control of your financial future.
Live purposefully: Wealth extends beyond material possessions. Invest in your health, relationships, and personal growth. Pursue hobbies you enjoy, connect with loved ones, and engage in activities that bring meaning to your life. Living a fulfilling life alongside financial security is true wealth realized.

Remember, the path to wealth is a marathon, not a sprint.

Consistency, discipline, and patience are key.

Celebrate milestones, but stay focused on long-term goals.

Be adaptable and resilient. Occasionally, unforeseen circumstances may arise, requiring adjustments to your plan.

Seek support from financial professionals and a community of like-minded individuals.

5 Year Plan:

Here are some actionable steps to take within the next five years:

Year 1:

Create a detailed budget and track your spending.
Pay off high-interest debt and establish an emergency fund.
Increase your income by at least 10%.
Open an investment account and start with low-risk options.

Year 2:

Max out contributions to retirement accounts.
Explore additional income streams through side hustles or investments.
Diversify your investment portfolio.
Seek financial advice and education.

Year 3:

Re-evaluate your budget and adjust as needed.
Review your investments and rebalance your portfolio.
Increase your risk tolerance for higher potential returns.
Implement tax-saving strategies.

Year 4:

Focus on growing your income streams significantly.
Consider larger investments like real estate or business ventures.
Build a passive income stream.
Help others achieve financial literacy and build wealth.

Year 5:

Assess your progress and adjust your plan if necessary.
Celebrate your achievements and set new goals.
Continue learning and adapting to changing economic landscapes.
Enjoy the fruits of your work and share your success with others.

Conclusion No 1:

Wealth building is not a guaranteed formula but a continuous growth and learning journey.

By embracing mindful spending, disciplined saving, proactive investments, and a commitment to personal fulfilment, you can set yourself on a path to achieve sustainable and meaningful wealth within five years and beyond.

Remember, the definition of wealth is personal. Tailor this roadmap to your unique goals, values, and circumstances. Stay committed, learn continuously, and adapt as you journey towards a financially secure and fulfilling future.

Part 2: Beyond the Numbers – Integrating Values and Impact

While the previous section outlined a practical framework for building wealth, true financial well-being extends beyond accumulating mere numbers. Integrating your values and considering the impact of your financial decisions are crucial for shaping a sustainable and fulfilling journey.

1. Alignment with Values:

Ethical Investing: Choose investments that align with your values, such as sustainable practices, fair labour standards, or responsible resource management. Consider impact investing or socially responsible funds to support positive societal change.
Philanthropy and Giving Back: Allocate a portion of your wealth to causes you care about, be it through donations, volunteering, or supporting community initiatives. Giving back not only creates a positive impact but also fosters a sense of purpose and strengthens your connection to your community.
Living Sustainably: Make conscious choices that minimize your environmental footprint and promote responsible consumption. Reduce your carbon footprint, support local businesses, and choose eco-friendly products. Living sustainably aligns your financial choices with environmental and ethical values.

2. Building Strong Relationships:

Financial Transparency with loved ones: Open communication about finances with your partner, family, or close friends can ease burdens, foster trust, and prevent future financial conflicts.
Sharing Your Expertise: Utilize your financial knowledge to empower others. Whether mentoring young adults, sharing tips with friends, or volunteering for financial literacy programs, helping others navigate their finances creates positive ripples within your community.
Investing in Relationships: True wealth also encompasses strong connections with loved ones. Prioritize quality time with family and friends, invest in experiences, and nurture these relationships. Strong social bonds contribute significantly to overall well-being and happiness.

3. Embracing Purpose beyond Wealth:

Define your life goals: While financial security is important, it’s not the sole purpose of life. Explore your passions, interests, and skills. Develop goals beyond financial accumulation that contribute to your personal growth and sense of fulfilment.
Contribute to society: Seek opportunities to use your talents and resources to make a positive impact. Take on leadership roles, mentor young people, or volunteer your time and skills to a cause you care about. Living a life of purpose brings immense satisfaction and enriches your community.
Find joy in the present: While striving for future goals is important, don’t neglect the present moment. Practice mindfulness, appreciate experiences, and find joy in everyday interactions. Appreciation for the present leads to a more fulfilling and meaningful life.

Remember, wealth is not a singular destination but a continuous journey of learning, growth, and impact. By integrating your values into your financial decisions, building strong relationships, and embracing a purpose beyond wealth, you can create a fulfilling and sustainable path towards financial prosperity and personal well-being.

Conclusion No 2:

Building wealth is important, and working towards financial freedom is a worthy aim. However, a more holistic perspective on wealth building will inspire you to create a journey that aligns with your vision for a meaningful life.

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About the author:

Roy Sutton

Why you should put something away for a rainy day

08/04/2024 by Roy Sutton

Dear Reader, have you ever considered why you should put something away for a rainy day?

When you’re doing well and have a good income, it’s easy to imagine that the good times will go on forever and you can enjoy it all with the expectation that money will continue to flow in your direction without interruption.

But life’s not like that. Into every life, some rain will fall, as the saying goes.

Good times don’t last forever. Life tends to be cyclical, like the changing of the seasons.

The time to repair your roof is when the sun is shining, for winter will have its day and we must be prepared for inclement weather.

Savings matter:

When you get paid each month you must set some money aside, separated into three accounts, as follows:

You must be prepared to pay those bills that come in regularly; you must be ready for an emergency. Equally, you must start creating wealth, so that one day you’ll be able to retire.

Bill Payment:

You cannot live in the modern age without incurring bills.

Whether it’s utility bills, phone bills, TV subscriptions, mortgage payments or rent, credit card payments, food bills, repayments on a car loan, et cetera. You must set money aside to pay all those bills when they fall due.

Emergency Account:

As the saying goes, stuff happens.

And when stuff happens you must be prepared to deal with it. You must have an emergency fund you can tap into to deal with emergency repairs or even an unexpected interruption to your income. These things do happen.

Financial Freedom:

When you’re young, it’s easy to think that you’ll keep on working, if you must, to earn an income.

However, trust me, one day you will want to retire from work, or at least from the daily grind.

If you are to retire you will need some wealth.

The best time to start building wealth is when you’re young.

Start a 401K or pension whilst you’re young, pay into it regularly and with some luck and good financial management, you can enjoy a comfortable old age.

By starting young you will benefit from the magic of compounding. The impact of compound interest should not be underestimated.

Remember; it will rain:

Think of life in terms of the seasons and prepare accordingly.

Most people experience hard times at some point in their lives, particularly when they’re young.

You can be sure it will rain; the only question is when.

You will be able to weather the storm a lot better if you have a financial cushion in the form of some savings.

If you are lucky enough to have an income now, you’d do well to remember to put some of your income away for a rainy day.

It’s easy to squander your money thinking the good times will never end.

However, nothing lasts forever. So, my advice is, to be prepared.

Why you should put something away for a rainy day

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Filed Under: Money Tagged With: Achievement, Attitude, being the best, Influencers, Inspiration, Life, Meaning, money, Motivation, Philosophy, Sage Advice, self-actualisation, self-actualization, Success, Wisdom, Work

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Avoid the ‘I’ve got to have it’ approach:

Credit cards: Weapons of mass wealth destruction:

The disciplined approach:

The questions to ask before making any purchase:

Let the answers to the questions guide you:

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The message here:

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1. Secured Debt:

2. Unsecured debt:

3. When is debt a bad idea?

4. The magic of compounding:

5. Manage your money:

6. Debt is a form of slavery:

7. Conclusion:

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Part 1: Financial Wealth: How to Become Wealthy in 5 Years:

5 Year Plan:

Year 1:

Year 2:

Year 3:

Year 4:

Year 5:

Conclusion No 1:

Part 2: Beyond the Numbers – Integrating Values and Impact

1. Alignment with Values:

2. Building Strong Relationships:

3. Embracing Purpose beyond Wealth:

Conclusion No 2:

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About the author:

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Savings matter:

Bill Payment:

Emergency Account: