The financial information in this article is general only, I am not qualified to give financial advice, before making a financial decision you should seek the advice of a qualified professional.
Hey guys, today I’m going to explain how you can get anything for free!
Ok it’s a bit of a click bait title but hear me out ;P
We all want to get something for free don’t we? After all, we work hard for our money so getting stuff for free is a bonus!
Well now I’m going to explain how you can ANYTHING you want for free.
How is that possible? You ask.
BY USING THE POWER OF INVESTING.
What I am about to explain is how to offset anything you purchase by investing.
Ok so here is how this works.
So the stock market/property investments historically return around 8% per year which I believe is 3% inflation and then the 5% dividend or rental yield so there is your 8%.
What this means is if you invested $1000 into an index fund and after one year it went up by 8% (this is just for example in this article) well then you will be up $80 but you don’t count 3% because the cost of everything also went up 3% with inflation but you still made 5% (dividends that were reinvested) so you made $50 profit.
So what does this have to do with getting anything for free?
Well let’s say you invested that $1000 in the share fund and ignoring inflation you received the $50 profit every year. Then after 10 years you will have made $500 or a 50% return and after 20 years you would have made 100% and doubled your money!
So how this works is let’s say you saw a new pair of shoes you like and they were $200 and you felt guilty for buying them because you “lose your money”
What you could so is buy them and then invest another $200 into an investment like shares or property ($200 into paying a mortgage which charges you 5% is the same thing)
So all up you spend $400 but if you hold that investment for 20 years eventually it would have paid back what you spent on those pair of shoes! Pretty cool huh?
Whether you bought something for $100, $1000, $10,000 or $100,000 you could place that same amount (if you had that money that is) into investment and eventually pay back that purchase.
This works even better if you have high interest debt because that interest rate might be 10% or more that 20%! In that situation instead of investing it in shares or properties you might want to pay it into the high interest debt because paying off debt is investing in reverse and it’s a guaranteed return.
And you make that money back a lot sooner than the 20 years in the first example.
Hope you liked the info guys! Remember, just general/entertainment advice because we don’t know how investments will go in the future but it’s an idea. Good luck!