A lot of people play the lottery because they hope to get rich quickly without much effort. Those who actually win are considered lucky because the odds are so slim—about one in a few million. So, if you bought several lottery tickets tonight, chances are you wouldn’t win anything. Surely, there must be a better way to build financial wealth.
There is indeed a better path to financial freedom, and that’s through accumulating assets. But what are assets? Simply put, assets are things that put money in your pocket without you having to work for it. Acquiring assets usually requires some initial capital, much like buying a lottery ticket. However, unlike the lottery, good assets can increase your wealth over time rather than relying on sheer luck.
Starting Out
How does one begin building wealth through assets? Well, it takes time—Rome wasn’t built in a day. The most important thing is to just get started. If you have debt, try to eliminate it as quickly as possible. You don’t want to start your financial journey with a disadvantage. Treat bad consumer debt like the plague and avoid adding any more.
Taking the First Step
Investing doesn’t have to be stressful. Do your homework first, and once you’re ready, dive in! I’m not going to tell you exactly what to do, but I can share my experience to offer some insights. Sometimes, one lucky investment can fast-track your journey to financial freedom.
I began investing in December 2011 with $1,500. I knew the typical 9-5 job wasn’t for me, so I needed to create a passive income stream to replace my earned income. Dividend investing seemed like a good place to start because it’s accessible to almost everyone. You don’t need great credit, a huge down payment, or a lot of capital to begin.
I purchased 25 shares of Walmart (WMT) at $59.58 per share, marking the start of my financial journey.
Slow and Steady Progress
My first Walmart dividend arrived on June 4, 2012, and I earned $10.00. When starting out, don’t focus too much on the initial profits. Instead, appreciate that your money is now working for you. For many new investors, that first bit of passive income is a sign that you’ve made it as an investor. Use that feeling as motivation!
After receiving my first taste of passive income, I was hooked. Throughout 2012, I kept investing regularly without worrying about market fluctuations or headlines. The more I invested, the more passive income I earned. Within a year, my initial $1,500 had grown into a $60,000 portfolio.
Opportunity Knocks
Investing can bring luck your way. If you stay in the market long enough, a bull market can elevate your portfolio significantly, as was the case in 2013.
At the end of 2012, I started exploring real estate. The prices were low compared to historical norms, and thanks to my consistent dividend stock investments, I had a portfolio worth $60,000.
Around November 2012, my real estate agent informed me about a great short-sale deal—a beautiful townhouse in a great neighborhood. I didn’t hesitate and made an offer the next day. A year later, I rented it out, generating positive cash flow, and the property appreciated by nearly $100,000.
Being Flexible
There are countless opportunities out there, but you can only seize them if you’re ready. Investing wisely can eventually put you in a position to take advantage of great deals.
Flexibility is also key. Although I was focused on building my dividend portfolio, I switched gears to real estate when the right opportunity arose.
Fast Track to Wealth
If you want to achieve financial freedom early, you must invest in assets. Saving alone won’t make you rich, but a single fortunate investment can significantly boost your passive income and potentially enable early retirement.
For example, with my rental property now worth much more, I could sell it, use the profits to invest in more rental properties, and significantly increase my passive income. What started as a $300 monthly cash flow could potentially rise to $1,800 a month.
It Pays to Invest
Consider how long it would take to earn $100,000 from a regular job. When it comes to investing, it’s often about being in the right place at the right time. Luck is when preparation meets opportunity. Keep investing consistently, and over time, your chances of reaching financial success will increase. Unlike the lottery, your odds with assets get better the longer you play.