A habit I see among people constantly struggling with money is looking at money as something to spend. We’ve all seen it. Someone gets a bonus or has a windfall and mentally divides up how they’re gonna spend every dollar. New phone, new truck, fancy trip, etc. until the money’s gone. But a habit I always see among wealthy people is looking at money as something to grow. Spending the money makes it disappear. Investing it makes it grow exponentially. ‎
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This is one look at the dramatic difference someone would have seen if instead of buying a first generation iPod back when it was released they put that money into Apple stock and held it to today. Vintage iPods actually still go for a pretty decent price on eBay (I found a few in decent shape recently sold for $177). But those shares of Apple today, with dividends reinvested, would be worth $174,000.‎
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Now this is obviously an extreme example that I put together for clickbait on Instagram. I chose one of the greatest stocks on the planet, something I could have only known with the benefit of hindsight. (In 2001 Apple was pretty much a joke). But looking forward, we can’t know which companies are going to outperform the market relative to their current share price. So instead of dumping all of your money into a single stock, the smart way to build wealth is to buy and hold index funds. That guarantees you the profits and growth from all the companies in the economy.‎
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So next time you have some money, think about how you can cut down spending a bit and invest it for future growth!‎
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As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.‎
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-Jeremy‎
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via Instagram