Do you want to build a money-making machine that will pay you? You can create your money-making machine by buying income-producing assets that will support you in your (early) retirement.\u00a0<\/strong><\/p>\n Wealthy people always seem to get richer. How do they do that? They just can\u2019t be that lucky, right? What made them rich? And the more important question is, what keeps them wealthy?<\/p>\n Simplified, wealthy people make smart money decisions<\/a> and invest their money in assets instead of liabilities. These people make it a point to find ways how to grow their money, portfolio, and bank accounts.<\/p>\n As Robert Kiyosaki of Rich Dad Poor Dad<\/a> put it: an asset is something that puts money in your pocket, and a liability is something that takes money out of your pocket. For example, real estate<\/a><\/strong> or business is an asset, and the car you drive is a liability.\u00a0<\/p>\n How can you build a money-making machine when you have no idea about real estate, business, or any other way that rich and wealthy<\/a><\/strong> people make money?<\/p>\n Well, that\u2019s easier said than done. I can\u2019t possibly become a business owner! I know nothing about business, I like my job, and what would I ever do?<\/p>\n Okay, let\u2019s pause here for a minute. I think there may be a misunderstanding.\u00a0<\/p>\n You can absolutely start a business. I\u2019m 100% positive about that. You just need to look at things from a different perspective.\u00a0<\/p>\n You don\u2019t need to start a traditional business. You can start your business in everything or anything you want.<\/p>\n I have a great business idea for you. It will be a business that requires almost no money or time to set up, it can make you money instantly, and it\u2019s very easy to start.\u00a0<\/p>\n The most important feature of a business is that it is making money, that it\u2019s a money-making machine. This business is exactly that!<\/p>\n Before you think that buying stocks<\/strong><\/a> is not a real business and that you want a real money-making machine, hear me out!<\/p>\n A business is only in business because it makes money. If there is no money to be made, the business will not exist.\u00a0<\/p>\n Your business of buying stocks also has the aim of making you money. The goal of your business is to buy as much stock as you can.<\/p>\n Plus, you can tailor this business entirely to your personal needs. If you have a lot of money, you buy a lot of stocks. If you have little money, you buy one stock at a time.\u00a0<\/p>\n Remember: your business is creating a money-making machine using stocks.\u00a0<\/p>\n There are two ways to make money with stocks:<\/p>\n [Related Read: 5 Simple Steps To Start Investing Your First Dollar<\/a><\/strong>]<\/p>\n When you own a company\u2019s stock, dividends<\/a><\/strong> are a way of saying thank you for investing with them. They give you a percentage of the profit they have made over the last period.\u00a0<\/p>\n Dividends are a way of earning passive income<\/a> with your investments. Passive income is the main reason the majority of people are drawn to dividends. Who doesn\u2019t want to make money while they sleep?<\/p>\n The more stocks you own, the more dividends they will pay you. For example, I received $250 in dividends in April. That means that I get paid $250 because I am holding an X amount of shares.\u00a0<\/p>\n When you are going to build your money-making machine and set up your business this way, you will get dividends automatically from the majority of the companies.\u00a0<\/p>\n When you own a stock in a company, you hope that the stock will rise in value in the time that you hold it. If a stock increases in value, it means that the price is appreciating. You sell the stock for a couple of years (or months) for a higher price, and you have yourself a nice profit.\u00a0<\/p>\n Increasing the value of your stock is something that happens naturally over time. Companies will add more value, and the economy as a whole will grow.\u00a0<\/p>\n Historically, a stock will rise an average of 7% per year<\/a>. That means that, on average, your stocks should appreciate 7% every year (adjusted for inflation).\u00a0<\/p>\n The real world learns that the value of a stock is not linear. This means that some years, your stocks will appreciate 20%, while in other years, they will decrease by 6%.\u00a0<\/p>\n When you invest in the stock market, it is not about timing the market or only selling when you think the stocks are high. You simply can\u2019t know if the stock market will increase further for another couple of years.\u00a0<\/p>\n That\u2019s why a famous saying goes: time in the market beats timing the market<\/em>.\u00a0<\/p>\n How do you build your money-making machine? By buying stocks.\u00a0<\/p>\n You are simply buying parts from other people\u2019s companies.\u00a0<\/p>\n How can you know what stock to buy? How can you see what stock is successful?<\/p>\n You never know what stock will be successful. Don\u2019t try to pick individual stocks and bet on them. That means an increased risk of having losses in the long term.\u00a0<\/p>\n Spread out your money and buy a piece of a lot of companies in the stock market.\u00a0<\/p>\n The best way to do this is to buy an index fund that tracks the world economy. A popular fund that has over 3,900 businesses in it is VWRL (Vanguard All-World ETF). You own a piece of every one of those companies.\u00a0<\/p>\n Many people have asked me over the years if investing is not risky. This includes my family, friends, and even my colleagues (I work in finance, go figure).\u00a0<\/p>\n This is the general consensus: investing in the stock market is risky, and you can lose money doing it. Everyone knows the story of someone who invested in a company that went bankrupt.<\/p>\n Even when I was in university, my professors couldn\u2019t stop talking about big scandals and the subsequent bankruptcy of companies like Enron and Arthur Anderson.\u00a0<\/p>\n That is why investing in individual stocks can be risky. These companies can go bankrupt, and you will lose your investment. 89% of the companies<\/a> in the Fortune 500 in 1955 were not there anymore in 2019. As reported in 2016<\/a>, for the S&P 500, about half of the companies will be replaced by others. The volatility in the market increases, and that will not end well for the majority of the companies.\u00a0<\/p>\n I\u2019m telling you to invest because investing in low-cost index funds is safer. It is safer to invest in 3,900 companies than to invest in 1 single company.\u00a0<\/p>\n Companies that aren\u2019t successful will be replaced by companies that are. Since companies are money-making machines, only the companies that are making money stay in business. Companies that are not making money will be filtered out, and you will not notice much about that.\u00a0<\/p>\n If one stock is 0.2% of the index fund, it will decrease by 50%. So what? You will barely notice it. If one stock is 50% of your portfolio and is valued at 50% of the buy price, your entire portfolio will be reduced by 50%. You bet that is no fun.\u00a0<\/p>\n Something that I would tell the majority of people: low-cost index funds<\/a> are the way to go.<\/p>\n The entire stock market is working for you! You are limiting the downside by making sure that the individual companies\u2019 performance can\u2019t harm you. The downside is limited since they can only go to zero. You have no limited upside because the value of a company can increase until infinity and beyond.\u00a0<\/p>\n The market does the filtering for you. Underperforming companies are filtered out, and companies that overdeliver keep growing. Win-win!<\/p>\n Warren Buffett agrees!<\/strong><\/p>\n That\u2019s not to say that there is absolutely no risk in the market because there is. That\u2019s what we see right now. There is volatility in the market<\/a>, and they keep moving up and down.\u00a0<\/p>\n Investing in the stock market means sticking with your plan even if the market goes haywire. Remember that no matter what the stock market does, the general return is still 7% inflation-adjusted.\u00a0<\/p>\n Do you want to maximize return? See what\u2019s the best to invest in Large Cap, Mid Cap, or Small Cap stocks<\/a>.<\/p>\n Here\u2019s the S&P 500 index:<\/p>\n If we look at the stock market, we see many up-and-down moves. In some years, your returns will be golden, and in other years, your returns will be below average. That\u2019s all okay. Focus on the average, and you\u2019ll be good!<\/p>\n No business is risk-free. Neither your traditional business nor the stock business. Investing involves the risk of loss.<\/p>\n How can I start investing? Check out these resources:<\/strong><\/p>\n Great job, you have successfully set up your very own money-making machine. How awesome is that? This is the start of realizing your dream to achieve financial freedom and early retirement!<\/p>\n Now that you have a plan to make a money-making machine, you need to stick to it. This can be done in various ways: pay yourself first<\/a> \u2013 meaning that when you receive your paycheck, a fixed percentage of that goes to your various money goals. Saving, investing, emergency fund<\/a>, and more.\u00a0<\/p>\n It is important to stay motivated to stay the course. One way I\u2019m personally doing that is working towards financial independence<\/a>, where I don\u2019t need to work for money anymore. Identify your own money goals and use that as a motivator. Believe me. You will achieve your goals a whole lot faster!<\/p>\n If you want to fuel your money-making machine even more, you can consider making more money to put into your money-making machine. It\u2019s all about making the right choice for your financial and investment strategy and being diligent in following it. Through this, you will be able to realize all the dreams you have into reality.<\/p>\n You\u2019re all set up and prepared to make the most of your money-making machine, let your money work for you, and make more money to get to your financial goals even faster!<\/p>\n Do you have your own money-making machine?<\/p>\n Like the post? Save for later! <\/em>????<\/p>\n Founder of Spark Nomad, Radical FIRE, Journalist<\/strong><\/p>\n Expertise: Personal finance and travel content Experience<\/strong>: Marjolein is a journalist and founder of Radical FIRE, a personal finance platform, and Spark Nomad, a travel platform. Marjolein has a finance and economics background with a master\u2019s in Finance. She has quit her job to travel the world, documenting her travels on Spark Nomad to help people plan their travels. Marjolein has written for publications like MSN, Associated Press, CNBC, Town News syndicate, and more.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n\n","protected":false},"excerpt":{"rendered":" Do you want to build a money-making machine that will pay you? You can create your money-making machine by buying income-producing assets that will support you in your (early) retirement.\u00a0 Wealthy people always seem to get richer. How do they do that? They just can\u2019t be that lucky, right? What made them rich? And the […]<\/p>\n","protected":false},"author":1,"featured_media":7052684,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[93],"tags":[5293,1952,50625],"dealstore":[],"offerexpiration":[],"class_list":["post-7052683","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-build","tag-machine","tag-moneymaking"],"yoast_head":"\nBecome A Business Owner<\/h2>\n
Get In The Business Of Buying Stock<\/h2>\n
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Dividends On Your Stock<\/h3>\n
![\"Business](\"https:\/\/radicalfire.com\/wp-content\/uploads\/2023\/11\/Business-concept-about-Investing-in-Dividend-Stocks.png\"\/)
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\n<\/figcaption><\/figure>\n<\/div>\nYour Stock Increases In Value<\/h3>\n
So, How Do You Build That Money-Making Machine?<\/h2>\n
Is Investing In Stocks Risky?<\/h2>\n
So Why Are You Telling Me To Invest?<\/h3>\n
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\n<\/figcaption><\/figure>\n<\/div>\nLet Your Money-Making Machine Work For You<\/h2>\n
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![\"S&P](\"https:\/\/radicalfire.com\/wp-content\/uploads\/2019\/04\/SP-500-Index.webp\")
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Congrats, You Have Your Own Money-Making Machine<\/h2>\n
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How Can I Make More Money?<\/h3>\n
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![\"Radical](\"https:\/\/radicalfire.com\/wp-content\/uploads\/2019\/01\/Knipsel.webp\")
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Education: Bachelor of Economics at Radboud University, Master in Finance at Radboud University, Minor in Economics at Chapman University.
Over 200 articles, essays, and short stories published across the web.<\/p>\n