While being a responsible spender is a good thing, if you really want your wealth to grow then you are going to have to be more of an offense orientated spender. People who grow to become defensive with their money do not take the risks needed to make profitable investments, they try to hold onto their money for as long as possible and eventually end up with less money than they had before.
Think of it this way, even if you have the best defensive strategy in the world, you will not be able to gain any ground, you will be stuck on the same spot. You need to become financially aggressive in order to grow your wealth and get rich, spend your money on investments rather than keeping it in your bank account. Even the most basic investment will get you more money by the end of the year than what you could earn by keeping your money in the bank.
Making investments and getting offensive with your money is quite easy, all you need to do is keep these three steps in mind:
- Determine your target and set financial goals
- Identify potential investment opportunities
- Invest in what you believe will generate revenue for you
Becoming financially aggressive is not just about spending money, it is also about developing the right mind set, spend 95% of your energy on earning and looking for opportunities to exploit, and the remainder 5% can be left for expenses. Another important thing to remember is that never take a loan for anything other than making an investment, if you cannot directly earn from the amount that you loaned, then do not loan it. Debts that do not generate returns become ridiculously expensive down the road.
You should also keep in mind that being financially aggressive is not a one man show, especially if you have a family. You need to make sure that everyone knows about what you are doing and why you are doing it, many families have been destroyed because people kept each other in the dark about their investment spending. Your financially aggressive attitude should not become so out of control that you run out of money to manage your basic expenses.
Also, learn to focus on the finer things, create a budget for your expenses that you must follow with discipline, assess the cost to benefit ratio of every major expense before you carry it out, and set goals for yourself, goals that will give you a direction to work towards. These goals should be dynamic and updated frequently, otherwise they will not mean much.
Another crucial part of becoming financially aggressive is to surround yourself with likeminded people, not only will these people keep you motivated, they will also provide you with insight on the environment and make it easier for you to follow the money trail.
With the right strategy and mind set, offence becomes the best form of defence.