Can you convert your expense into your investment? If you can, it can be a goldmine for Financial Independence. Are you aware of the difference between expense and investment? Yes, of course! I believe most of the people are aware of the difference between expense and Investment. However, very few are aware of the process through which you can convert your expense into an investment. In this article, I am going to reveal a simple concept through which you can do it.
Expense VS Investment
You spend your money either as an investment or as an expense. Most of us do some kind of expense and some kind of investment.
You spend your money to meet your daily need of food, clothes, paying rents and bills, and buying some luxuries. These all are your expenses. Why? It is because it is not going to give you back any returns in the future.
You also spend your money in stocks, mutual funds, building your businesses, etc. These are your investment. Stocks, mutual funds, your business is going to give you some returns in the future. Thus, these all are your investment.
What are the products you use regularly which go as an expense?
So let’s survey your different parts of the house to find out the products you use regularly at your home.
In the kitchen you may find cookware, utensils, gas stoves, cereals, vegetables, food supplements, spices, cooking oil, etc.
Bathroom and laundry
Here you may find detergent, bathroom cleaner, soaps, shampoo, conditioner, face wash, body cleaners, shaving foam, toothpaste, tooth brush, etc.
Here you may find clothes, shoes, beauty creams, hair gel, moisturizers, lipsticks, talc, perfumes, spectacles, etc.
Here you may find beds, blankets, medicines (if you take any), television, mobile phone, power bank, etc.
There are hundreds of products you buy and use regularly. All these go into expenses. In order to know how you can convert these expenses into investment, we have to find out where do you buy these products.
Where do you go to buy your daily product?
You might be wondering what a childish question is this? Of course, retail shop or shopping market like Wal-Mart or some other mega mart or supermarket.
Do you ever imagine, by doing so, you are making an asset for others? Asset! Really! You might never have thought that way.
Yes, shop owner or Wal-Mart makes money from whatever you buy. Don’t you think their business is an asset? Of course, it is.
But important is not that you know while buying any product you helps someone else to build an asset. Important is, can you make an asset while buying your daily needs product? If you can, then you can convert your expense into an investment. Because investment always creates some assets which give you something back in returns.
Is it possible? And, the answer is, yes. Converting your expense into your investment is possible. Now, the real question is how can you do that?
How can you convert your daily expenses into investment?
To answer this question, you have to find out how these retail shops or supermarkets make money while selling the product. Generally, they use the following two methods-
- Retail profit- They buy the product at a discounted rate from producer and sell to consumer at a retail price.
- Incentives- Generally product manufacturing company share part of profit with their retails partner based on their gross volume of business.
Also, the company invests much on advertisement to sell their product. Now suppose you are interested in buying the product directly from producer. And in returns, company share a part of profit with you. Earlier it was sharing with a retail shop or supermarket owners.
In such a case, will you like to buy a product from the producer directly? Of course, you will. Also, will you like to tell people surrounding you about this opportunity? Of course, you will do, if you are a helping kind of person.
Normally also we talk to the people about the things you like. We always buy some product as per the reference to our friends and relative.
Now, suppose the company pays you if someone buys the product on your reference. Also, the company will pay you if someone buys the product as per reference of one whom you have referred. Suppose this procedure keep going till infinity to build a huge group. And each of them in group is paid, just for buying the product of their need. And, also partly for referring to their friend and relative, if they like the product.
Now everyone in the group will buy the product of their need and they will get some profit in returns. So can you now say that your daily expense is now your investment? Yes, you can. You are getting returns on the money you spent.
Since you are also getting profit when other people in your group buy the product of their need, this group can be a good source of passive income for you. Thus, this group can be treated as an asset.
This method of selling the product directly from producer to consumer is called Direct Selling Method. And the process of building a group and sharing the profit among members is called Network Marketing. The power which drives this methodology is called Power of Word of Mouth.
Now you might be wondering, this is a very old concept. Is there any potential in this idea in the modern situation?
Does this Idea have potential in the modern situation?
I believe this idea has tremendous potential. Also, its potential will keep growing with the advancement in technology. Why?
People are not going to stop using their daily product. Also, if you will find an opportunity to get some profit over it, who will deny? I guess most of the people will not deny.
Also, with the advancement in technology, can you ever imagine the number of people you can connect across the globe and make your group? Infinite! Larger the group higher will be income.
Actually, in this idea, you do not put effort alone to build your asset. Your group effort is also taken into your account in building your asset. Your group is leveraging your time to build your asset and making you wealthier. Earlier you were acting as a lever for retail shop or supermarket owner to build their asset.
Although this concept seems of low potential, it has such a great potential that it can lead you to Financial Independence.
Is it easy to do?
To be very honest, I believe this is not an easy task as it seems. Executing any idea which may lead you to Financial Independence is not an easy task.
If your goal is Financial Independence, you need to be consistent in your effort. Also, it requires a certain kind of mindset to achieve Financial Independence.
Also since early income is very low in this idea, so people lose patience in a very early stage. You need to have a lot of patience.
A journey to Financial Independence is not an easy task. But with proper mindsets, if you can convert your expense into investment, it can be a goldmine to achieve Financial Independence. Network marketing is the tool you can use for this. Also, it needs a lot of patience and consistent effort.