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How to Spend Money to Make MORE Money

Previous parts of this article: Part 1   

 

Bean Theory Examples

Example #1: You buy a $2500 stereo system with a credit card. The stereo system makes you no money and loses value over time. You pay $2000 in interest over five years before you pay off the credit card debt. For 4500 beans paid out, you get no beans back and have an asset worth 1200 beans or less. Bad spending.

Example #2: You buy a small old house. You pay $25,000 as a down payment and a home loan for $75,000. You invest $25,000 in upgrades and repairs. Over three years, you pay $13,000 in interest. You then sell the house for $160,000. For 25,000 beans for the down payment, 25,000 in repairs and 13,000 beans in loan interest, you get 22,000 beans after the loan is paid off. You also lived in the house for three years which saved you 12,000 beans in rent per year. Total profit of 58,000 beans. Good spending.

Example #3: You spend $500 to learn how to create websites. You enjoy the work and create some brilliant examples. Your friends ask you to help them and through word-of-mouth, you are soon earning an extra $2000 per month. Your 500 beans return thousands of beans back to you.

 

More Examples

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