Robert Kiyosaki of http://www.richdad.com fame said recently in a tweet that “if you are depending solely on earned income you are in seriously scary territory.” Or, something along those lines. The point is that one of the best ways to stay out of debt that is NEVER spoken about is to find ways to create additional revenue streams.
Sure a job is important. Having a good paying job is the foundation for living, saving, and staying above the poverty line; no doubt. However, creating multiple revenue streams from passive investments such as a brick and mortar business, an online business, investing, or real estate, can go a long way towards ensuring the debt you do have is extremely well managed.
Have you ever heard the phrase “don’t place all of your eggs into one basket?” Working tirelessly may bring in a paycheck but it may also reduce the chance for you to be creative, to pursue other money-making opportunities, or to even think of other ways to earn income.
The most precious commodity we all have is time. In today’s economic climate many jobs require 50-60 hour workweeks from their employees to be competitive. That’s certainly could be great for your paycheck but it can also be a drag on YOUR time. Losing time is an opportunity cost.
If you pally these principals to credit-card spending think of this – if you have a credit card with a $5,000 dollar limit and you only charge $500 dollars then you are managing your utilization ratio effectively. If you continuously rely on using that same credit card for every purchase and max the card out spending up to $4,900 then you have damaged any future credibility with that lender or most others.
Utilize your time and creativity the same way you would want to utilize your credit cards….with balance.