Financial Strategies to Implement for Financial Security in the Future

Three Different Types of Income

No matter what you do and how you make money, your earnings can be distinguished into three major types.

Earned income: This is the money you make from your work. When you a receive salary or payment for your work, it is your earned income

Capital gain: This is the income you make by selling your assets. When you make profits by selling stocks, property, etc. it is capital gains.

Passive income: This is the income you generate passively, without working. If you receive rents on your property, if you receive dividends on your stocks, that is passive income.

Earned income is basically dependent on your ability to work and your knowledge and expertise, whereas capital gains and passive income are made through your investment or trading activities. You need to manage your earned income to build capital gains and passive income. That’s how you build your fortune. Don’t entirely depend on earned income.

How to Find Your Niche

In order to make money, you need to find your niche. Finding a niche means you find a job or a career option that works best for you. Finding a niche means you find an industry where you can make the most. In order to find your niche, you will have to consider a couple of options, for example

What kind of education you have had?

What kind of knowledge and expertise do you have?

What kind of skills do you possess?

What you are very good at?

What are you passionate about?

If you can answer the aforementioned questions, you can easily find your niche. If you went to a design school, designing is possibly your niche, if you are good at programming, developing and designing websites/apps might be your niche.

While choosing your niche, you will also have to see if the answers to the aforementioned questions connect to each other or not. For example, you might have studied science but you might not be interested in any science-related work, therefore, apart from your education, you might also have to consider your interest.

Let’s say you have multiple skills and multiple interests. How do you choose your niche? Well, try to use everything you know and are good at and stay with the one where your success rate is high.

How to Ensure a Better Financial Future

Two years of the Covid pandemic and now the war, a global recession has begun. No matter where you live, by this time you might have already noticed that the value of your local currency had depreciated in comparison to the United States dollars. In a desperate hope to control the high inflation, the central bank in your country has increased the lending interest rates. When the banks increase the interest rate, this does not auger well for the economy because the stock market will go down whereas the price of commodities will increase.

In the last few months, you might have seen how the economic activities in your country are not very good. So, what should you do now in order to ensure a better financial future?

Do not save money in the banks: There is inflation, when there is inflation your money is losing value every single minute.

Start investing: The recession causes the price of stocks to fall. This is your time to invest. When you are investing, you are also taking control of your financial future.

Work more: A recession will cause you to lose your income stream or reduce your income, therefore, work more.

Spend less: A recession is a time to go into hibernation, therefore, spend less. Instead of spending money on useless things, start investing.

How to Build Your Net Worth Through Insurance

For a lot of people saving money is very difficult because their earned income is hardly enough to pay their bills. One piece of advice they get all the time is to cut their expenses. However, they can't do that because they are only spending on their necessities. If you find yourself in these shoes, my best advice is to buy a life insurance policy. By paying premiums regularly, apart from the coverage against loss and damages, you will also be able to build good savings at the end of the maturity period.

Three Ways to Generate Passive Income to Build Your Finances

Business: If you build a profitable business, you can easily build passive income. You will have to work hard to build a business, but once your business starts generating revenue, you don’t have to work every day.

Investment: Business requires a lot of hard work to become successful, however, a better option is an investment. You can invest in profitable businesses and companies through the stock market and earn passive income.

Product: If you can build a profitable product, you can earn passive income. JK Rowling became one of the richest people in the UK, thanks to her Harry Potter.