How to Use Money to Make Money?

Using money to make money is a concept that makes you rich fast. Money is a very important thing in our life and accumulating this resource is very crucial for building wealth.

Your job or business may put money into your pocket but turning that money into generational wealth is a task only rich people understand.

The concept of using money to make money helps you build generational wealth and if you master this concept then building wealth will be very easy.

In this article, we will discuss how to use money to make money, the principle of thinking like a rich, wealth generation, and much more.

how to use money to make money

Principle of Thinking Like a Rich

To become rich, you’ll have to think like a rich and that can be done by adopting a few underlying principles that rich people use to their advantage.

The following are some of the principles which you’ll have to adapt to think like a rich which in turn will make you rich-

Debt is Good

In Today’s financial landscape where 98% of money is in the form of debt, you cannot grow without taking debt. But the problem is that people can’t get it right.

Debt is like a sword, if it is against you, it can kill and if you carry it well, it can protect you. Debt can be of two types- Good Debt and Bad Debt.

Your aim should be to get Good Debt and avoid bad debt. Good Debt is a debt which had a reasonable interest rate and is for asset purchase purposes.

Now, an Asset is something that puts money into your pocket like rental income, bonds, dividends from stock, etc.

If you take debt for purchasing these things then you can have a comfortable life and at the same time build massive wealth out of it.

Now, Bad Debt is something that takes money out of your pocket like a car loan, credit card shopping, etc.

Whenever you are taking debt make sure to plan the repayment so that you can manage cash flow as well. 90% of the good debt becomes bad debt when you experience lower cash flow with higher debt servicing.

You should allocate 30% of your income for debt servicing which will put you in a comfortable place of making other expenses and at the same time making sure you continue with your investment.  

Follow a Budget

Budget is something that will provide you with a template that you can fill in based on your needs and wants. Everyone should follow a customized budget that is designed for themselves and their financial goals.

Without a proper budget, you may end up making different financial mistakes and unplanned allocations which may hurt your cash flow.

Budget acts as a guiding principle that can provide you insights into where to allocate your money and for what.

Financial Planning

Financial planning involves planning your finances with a goal in mind. You must have a proper plan in place to ensure your current investments can live up to it.

Your goal can be to retire at 40 and travel the world or purchase a house on your 30th birthday, these long-term purchases require planning and execution for which financial planning is required.


Insurance is a safety net that empowers you in your time of need. Medical bills are on the rise and you may lose your fortune if you do not have an insurance policy.

There are two insurance policies that you must have, Health Insurance and Life Insurance. Both these insurance create a safety net around yourself which protects you in case of health problems or protects your family in case of your demise.

How to Use Money to Make Money?

Now that you have a basic understanding of the underlying principles of making money using your money, here are some of the things that you can use to make money using money-

Real Estate Investment

The Real Estate sector is one of the best sectors that can provide you with a longer-term investment opportunity and build a wealth of investment for yourself.

You can purchase and sell a property or can have rental income from the property, investing in the real estate market can provide you with amazing opportunities.

Here you’ll need a Home loan to finance your real estate purchases hence, taking debt to purchase a property is a good debt.

The property in the long term will be appreciated and if you are planning to earn rental income from this, then you can offset the rental income with the debt servicing virtually making the purchase almost free.

Earn Passive Income

Passive Income is an income that does not need your active participation for you to earn the income. This can be you selling an ebook or course or a YouTube channel, all these activities do not require your active participation but provide you value every time someone purchases it or watches it.

In today’s age, one source of income can be very limiting and would put your aspirations on backfoot, but with a passive income source, you can pave your pathway to financial freedom and a happy life.

Stock Market

Stock Market is another area where you can invest to earn money. The only catch is that you’ll have to focus on long-term investment instead of short-term intraday trading.

Equity stocks are the best types of stock that you can get and the returns that you can get are amazing. If you do not know anything about the stock market then you can choose a mutual fund for investment.

Mutual funds are professionally managed stocks with a collective investment. Mutual Fund companies hire a Financial Expert and then accumulate investments from various investors and then invest the accumulated amount into various stocks.

You can invest in a Mutual Fund with one one-time amount or an SIP which is a monthly payment into stocks.

Become Angle Investor

Angle Investors are those investors who invest in other people’s businesses and become equity holders of the company. The profit earned by the company gets shared among the owners including you.

The main aim of the Angle Investors is to participate in the profits of the company and increase the valuation. You can become an angel investor as well as it will help you in investing your money into a business that can generate profit for you without your active involvement.

Educate Yourself

Education should be the most important part of your life as it empowers you and builds value and potential for you to become wealthy.

Not all are born wealthy and wealthy people do not remain wealthy forever. But, with education, you can lift yourself from your current situation and rise. If you have one thing to invest in your life, it should be your education.


We all work for money so that we can do what we like and live however we like. Money empowers individuals with freedom and helps them to live a satisfactory life. The only problem with this is that to remain in this state, you need to work constantly.

This is where you can put your money to work for you which brings us to the question of how. The answer is simple- Investment.

Investing in things that build assets for you and reducing your liability is the key to making your life financially free and satisfactory.

The above-mentioned principles are the root concepts that one should use to look at their finances. It gives rich and financially independent spectacles to look through their financial choices ultimately helping you in building wealth and live a comfortable life.