How A Millionaire Manages One Dollar

If you don’t know how manage a million dollars, I guarantee that the money will quickly disappear if I wrote you a giant check right now. Precisely like 90% of lottery winners that go bust within five years, they didn’t have the basic discipline or the formula to handle the money that would have created a financial foundation that would last for generations. Learn how to manage a single dollar so that you can move up to the financial big-leagues on your own.

 

Give a millionaire a dollar and they will do something predictable: They will display the discipline not to spend it. That dollar will be deposited into a savings account where it earns interest income. A millionaire does not spend earned income! They only spend the income from their investments. A millionaire cycles money from a job, overtime pay, bonus, etc., into investment accounts. When you start out, you probably don’t have any investments so how are you going to pay your bills? Reject the saying: ‘Try to save some money after you pay the bills each month.’ This rarely happens and may be too little to add up to much. That saying is psychologically backwards. The new saying that I you want to begin with is: ‘Don’t invest all of your earned income each month, pay a few bills with it.’ Do you see the millionaire difference?

 

Let’s talk about financial building blocks. Give a millionaire a dollar and they will split it up into the distinct building blocks of a solid financial foundation. Ten-cents of that dollar will be allocated to a permanent investment account that is never spent. This account builds your wealth. As I have said before: ‘Wealth can only be created and maintained by the amount of money that you receive and do not spend.’ Well, this is that account, and you need to increase it by a piece of every dollar that you receive. Another ten-cents will be allocated to a savings account. This is a delayed-spending account for expensive purchases such as vacation, home repairs, or cars.

 

Millionaires save money to buy something before they purchase it, not afterward on credit where you have to pay interest. The next ten-cents is allocated to wealth education. The economy is always changing and you are ultimately responsible for directing all of your money. The only way to do this wisely is to add to your investment knowledge. Get investing ideas by paying for advisors, books, courses, newsletters, magazines, and newspapers. The three-dimes that were just allocated for different purposes is the wealth formula of millionaires; this is how wealth can be built to last for generations. It is only after these three buckets get their share of the dollar that part of it is allocated for taxes on that dollar. Notice that a millionaire pays the taxman after the important building blocks get their share.

 

There is no such thing as ‘income before taxes’. There is a tax liability on all income from whatever source. So a millionaire will have a tax strategy in place to receive that dollar before it is ever deposited at the bank. Millionaires don’t overpay their taxes, they manage tax liabilities because they are your single largest expense (Add up how much you paid for income tax to the IRS, state, city, and property taxes - it is probably a much bigger number than you expect). Some ways to minimize your taxes include setting up a part-time business to create legitimate deductions, buying investments that offer depreciation like real estate and oil, and finding the best CPA to give you advice.

 

The managing-a-dollar formula that the millionaires follow is: minimize the tax liabilities, allocate parts of it to build your financial foundation, decrease the percentage of earned-income that you spend until it is zero, and forge the discipline to consistently follow this routine. Now, at what age do you wish that you had learned this material? At what age do you think you should start exposing your children to these ideas? The correct answer is: as early as possible (and when they start getting an allowance at the very latest).

 

Eliminate The Personal Barriers To Wealth

Wealth is the condition of profuse abundance and affluence, having a bountiful supply of material goods, resources and money. It could also be defined as property of economic monetary value.

 

In Economics, wealth is defined as the stock of physical capital, human resources and net financial worth owned overseas by a country. Physical capital composes ownership of building structures, machines, railroads and other fixed tangible assets. Human capital on the other hand, is the quality work force with emphasis on educational attainment, which contributes to the country’s productivity. While net financial capital is off settled from the monetary value of assets acquired by foreigners in the local economy to the foreign acquisition of the country.

 

Oftentimes, wealth is associated with money such as savings, investments and other forms of financial capital.

 

But the word ‘wealth’ is taken from the Ancient English words ‘weal’ (well-being) and ‘th’ (condition), which when combined means ‘condition of well-being.’ ‘Economic,’ on the other hand, originates from the Greek word ‘oikonomia’ meaning ‘household management.’

 

In a different perspective, some individuals view wealth as a genuine disclosure of one’s true values, and accounts for what is held important to one’s life like a reflection of image and real self.

 

Today, society is posed with the challenge of sustaining quality life, which contributes to the equilibrium between economy and quality. Such perspective allows an individual to assess ones real assets - strength and opportunities to enhance ones real potential.

 

A person who attempts to align values and principles with the condition of well-being believes that he/she is seeking genuine wealth - all things that make life worth living (personal, professional, spiritual, environmental and financial well-being).

 

People mostly define authentic wealth in terms of harmonious relations with the members of the family, supervisors, co-workers, peers, neighbours and acquaintances. Some see it in the simplicity and complexity of natural creations. Or it could be measured in terms of joy, social cohesion and unquantifiable, abstract thoughts and ideas.

 

Another relevant word which can be related to wealth is value, which is derived from the Latin word ‘volorum,’ meaning ‘to be worthy’. Oftentimes, value connotes monetary expressions such as costs, prices and returns on investments. But true value (valorum) is found on the simple things that makes life worth living. It is the value of relationships, the value of what one possesses and not long for things which are not in their possession.

 

Do You Have Any Goals For Building Wealth

The money is out there. No matter how many people tell you that we are in the midst of a starvation economy, that the market is doing this or that, and that it's too risky to ‘play the game,’ so to speak, people are getting rich every day. That is the reality.

 

The trick, of course, is to become one of those people.

 

‘Yeah,’ you might say. ‘That guy was just lucky. What are the chances of that happening to me?’ Well, absolutely zero if you don't do anything about your dreams to build wealth. If you walk around thinking that you have only a snowball's chance of hitting ‘the big one’ in the financial game, then you are right. That's because you are depending on chance.

 

Becoming wealthy is not about chance. Oh the guy you just read about may indeed have been lucky - but he was not ‘just lucky.’ Because fortune favors the prepared mind, you have to lay the groundwork in order to take advantage of opportunity when it arises. You have to be able to not only recognize those opportunities, but to actually have the resources to take advantage of them.

 

Laying the groundwork involves having a plan for your financial future. What is your plan for building wealth?

 

If, like most Americans, you don't have one then, like most Americans, you will retain the status quo. But if you recognize that you, and only you, are in charge of your destiny, that is an entirely different matter.

 

According to Robert Kiyosaki, author of the Rich Dad series of books, you have to get a grip on your financial philosophy. You don't have a financial philosophy, you say? Sure you do, even if you don't realize it.

 

In his book ‘Cash Flow Quadrant,’ Kiyosaki outlines the four philosophies as they were outlined for him by the man he calls his ‘rich dad.’ You can recognize your own philosophy by noticing how you tend to make your money. On the left side of the quadrant, are the E's and the S's - the Employees and the Self-employed. The philosophy of the E is based around security while the philosophy of the S is based around doing his own thing. While there is nothing wrong about either philosophy, neither is likely to help you build much wealth.

 

On the right side of Kiyosaki's quadrant, are the B's and the I's - the Business owners and the Investors. The difference between a B and an S, Kiyosaki says, is that the B has built a system which he can rig to run itself, freeing him for other financial or personal pursuits. An S simply ‘owns a job,’ as Kiyosaki says, and is such an integral part of the operation that he is essentially a prisoner of it. The company he has created is his ‘baby.’ But we all know how demanding babies are, and if a business never matures into an adult that can survive without your mothering, it will eat most of your time.

 

The trick, then, is not to build a better product. It's to build a product better - more efficiently with regard to your own resources. Build a system, not a job. Then you will have the money that will take care of your personal needs and allow you to invest.

 

If you already have loads of money to work with, then you can go ahead and jump right to the I quadrant - after investing in your own education and learning how it works. Investing is risky if you jump in blind, but if you know what you're doing, it is a whole different matter.

 

So lay the foundation with education and then build your wealth as though you were constructing a structure. Don't skimp on materials, but instead do it methodically. Eventually you will find yourself staring at an impressive building that will help you weather any storm.

 

Common Wealth Building Myths

There are some common myths that hold work at home businesses and investors from achieving success. These myths can has a powerful psychological impact on small business owners, stopping them from building wealth, and preventing them from reaching their full potential.

 

Money Breeds Money

 

This may have been true pre discovery period, but it is not true in the Internet age. The myth that you need to be born into money, or attend an Ivy League school, or you’ll never know how to make real money is a difficult roadblock to overcome.

 

Millionaires are made every day. Most start with nothing, and use a program that failed for thousands of other business owners. Bill Gates, Ophra, and Martha Stewart all started from humble origins.

 

Money is Made on the Backs of the Poor

 

If you are afraid of going for the brass ring because you fear ruining someone else’s life, then relax. Your playbook can be moral, ethical, and built on old fashion values, and it will lead you to untold wealth. The easiest way to become rich is to create value in other people's lives.

 

This myth is high-grade, premium quality nonsense. There is enough money for everyone. Many ‘work at home’ programs prove this. The company may sell 10 000 programs. Just because only 100 people succeeded doesn’t mean that the program was a rip off. Those who do not succeed don't believe they can.

 

Remember that success starts in the mind. You need to believe that you can succeed before you will succeed.

 

You Must Sacrifice Family to Build Wealth

 

The baby boomers believed this and introduced one of the highest divorce rates in recorded history. However, their children have learned the value of balance, and the truth behind wealth. The rich and famous do not work as hard as the factory workers who run the companies that built their wealth.

 

This generation has coined a new phrase, ‘work hard, or work smart.’

 

There's a difference between working hard and working smart. Successful people learn to work smart. They learn emulate successful people and use them as models so they can avoid mistakes other people make.

 

You can save a lot of time, money, effort as well as some major headaches by finding a mentor, or hiring a life/success coach.

 

Getting your business started and running require work but you can chose to have a successful business and a family.

 

Rich People Cannot Live Normal Lives

 

Most of today’s millionaires live in suburban towns and lead normal lives. The dream of living the rich and famous life has lost its lustre. More people are learning that the fantasy of wealth was more attractive than the reality.

 

However, you can live the good life without giving up a normal life. There is no reason why you cannot take a vacation with your family at a local camp ground on the weekend, and then attend a conference in a $2 000 outfit and $800 shoes through the week.

 

Don’t let the fear of being rich stop you from reaching your dreams.

 

Life is sweet. It will be what you decide to make it as long as you remember that no one can define who you are - unless you give them the power to.

 

Building Wealth Through Joint Ventures

Almost every one of today’s billionaires built their empires on a joint venture of some sort. In the past, joint ventures were built on mergers, friendships, networks, and alliances. The internet has introduced join venture companies which work to join web publishers with products they can sell.

 

The fundamental principles behind joint ventures makes solid business sense. It is often cheaper to pay a content rich website a percentage of sales, or a fee for inbound traffic, in exchange for exposure.

 

Content rich websites are hard to manage, expensive to build, and are usually out of date within months. Adding content weekly can cost $8 - $15 an article. Managing a 1000 page content rich site, including newsletter, forum, blogs, and community can be downright debilitating.

 

That is why the web works to join content rich web sites with small businesses ventures. But, like everything, there is a right way to form a venture, and a wrong way.

 

Affiliate Programs

 

One of the most popular is the affiliate programs run through Commission Junction, Click Bank, and Amazon’s fulfilment program. These let the web publisher choose the products they want to promote. In return, the small business receives a ‘pre-selling’ tool, and increased traffic.

 

However, not all web publishers are equal. Many do not understand the finer points of pre-selling. They believe their only purpose is to create a ‘place holder’ on the web for the ad to appear on.

 

This makes it frustrating for the small business owner who pays for thousands of clicks but makes relatively few sales.

 

Most businesses throw up their hands after a few months and cry, ‘Is there something better?’

 

The answer is a simple - Yes.

 

Joint Ventures

 

There are thousands of joint venture opportunities out there. There are probably less than a dozen legitimate ones. Most of them, priced way beyond what a work at home professional can afford.

 

This forces work at home professionals to do things the ‘old fashion’ way. Take time to surf the web. If one or two websites offered a great ROI (Return On Investment) for your PPC (Pay Per Click) Campaign, then visit the website.

 

If the website includes a forum, blogs, new content, mailing lists, then the small business person found a gold mine. Contact the web publisher and ask them if they would be interested in a Joint Venture.

 

The odds are good that Google is not paying them something equivalent to what you are paying the PPC program. If Google is charging $.50 per click, and the monthly cost is $100.00 then offer the publisher $50 - $100.

 

In many cases, some of these publishers are happy to receive a guaranteed $20 a month.

 

Quality

 

Freedom to surf the website and look for the best content management sites can dramatically increase their ROI.

 

Some of the biggest content management sites have their own advertising fees. This can make life easier, but there are ways to offer publishers more value.

 

Add Value

 

One way to add value is to ask the publisher whether there is anything you can sell for them. Many web publishers can easily whip up a book. Adding it to your ‘package’ can improve their desire to help you sell, and give them more links.

 

Success

 

The success of a joint venture program is wrapped up in the contract. If the venture doesn’t require a legal contract, then contemplate using a service like www.adbrite.com where you can work together, using the Adbrite platform to keep track of data and help build wealth.

 

Building Financial Security Steps 4 to 6

Step 4: Learn to Set Goals

 

Most self-made, successful business people and investors have achieved their success by planning to do so.

 

They have set goals for themselves and achieved them. They invest time in reading and learning about wealth creation and are happy to learn from other people’s mistakes and experiences, as well as their own. They set goals, and realise that they will be far better able to achieve them if they familiarise themselves with the ways in which other people acted and the things that others have done to succeed. Wealthy people create wealth by carefully utilising the income that they have available to them to their best advantage. They know that working harder and longer hours is not the way to achieve financial freedom, instead they have to utilise what they have, and make it grow.

 

Having a goal enables you to focus your energies on devising ways to achieve it. When someone makes a decision and begins focusing on achieving a specific goal (and even better in a specific period of time), the powerful subconscious mind goes to work and begins playing with ideas and developing strategies of various ways to bring about the successful completion of the goal.

 

When you set yourself a goal both your conscious and subconscious start working on it and begin to develop an action plan. You will begin asking yourself questions about what needs to be done to enable you to reach your goal. Many find themselves coming up with amazing ideas and solutions to problems or obstacles that have been in the way of achieving their goal. The subconscious is an extremely powerful tool. The more often you remind yourself of your goal, the more your mind will work on ways for you to achieve it. Some people find answers come to them when they are asleep and dreaming.

 

Have you ever noticed that there is no correlation between being wealthy and having a high IQ or a university degree? If there were, every doctor and university graduate would be wealthy, and as statistics show, most of them end up in the same situation as 95% of the population.

 

Setting Goals helps you to focus your energy on developing workable strategies. Setting long term goals helps you look at the big picture. Once you can see the big picture, you can develop small sub goals. Sub goals are small simple goals that can be followed one step at a time. When you progressively achieve your sub goals, you will get closer and closer to your major goals. Goals are simply plans to succeed. It is said that if you ‘Fail to plan, then you plan to fail’. Goals help you keep motivated. Progressively achieving your goals can lead to a wonderful feeling of fulfilment.

 

Step 5: Learn how to Budget.

 

Budgeting does not have to be tedious. All you need to do is to work out:

What your incomings are. What your regular outgoings are and then make sure that all of your other expenditure is less than the amount remaining. This will allow you to start saving and investing. Budgeting puts you in control of your finances.

 

Step 6: Learn about investing - in particular about property investing.

 

Learn to research the property market, so that you will be able to purchase properties that will not only give a good rental yield, but they will also return the best capital growth possible. Read investment books. Read auto-biographies of successful people. Speak to people who have succeeded in doing what it is that you want to do. The more you learn, the easier it will be to recognise a good investment.

 

Find out about Negative, Neutral and Positive gearing - and why gearing is an invaluable tool, which will enable you to build up a wealth base in accelerated time, compared to if you only invested your own hard earned dollars.

 

Once you have educated yourself and understand why investing in property is such a powerful tool, you will be able to embark on the road to financial security.

 

In Australia, and many other countries less than 5% of the population reach retirement able to support themselves, without government or family assistance. If you want to be one of them, then now is the best time to start striving toward financial security.

Building Financial Security Steps 1 to 3

We would all like to think of ourselves enjoying the good things in life, not having to stress about finances, and not having to be concerned about growing old, poor.

 

But if we are currently living from pay cheque to pay cheque, never seeming to get ahead or having any savings, how do we change things? Where do we start in our quest for financial security?

 

The best thing we can do, is sit down, take a deep breath and contemplate the differences between the haves and the have nots, the achievers and the laymen. What is it that the successful and wealthy do, that is different to us? What are the principles that they utilise to create wealth?

 

Once we find out the principles that others who have created financial security have used, it seems that then the only step left would be for us to try and duplicate the process.

 

Following is a list of some of the wealth building principles that I have discovered in my study of and conversations with successful people.

 

These concepts have been utilised extensively by those who have already created enormous wealth.

 

Step 1: Use the power of Compounding Interest/Growth.

 

John D. Rockerfeller once described compounding interest as the ‘Eighth Wonder of the World’.

 

Compounding is also referred to as Rate & Time because the longer the time, and the higher the growth rate, the greater the effects of compounding become.

 

Compounding works by letting any interest earned get added to the initial investment, and then the next lot of interest is calculated on the sum of the two, and so on. Interest is earned on interest. This gives the effect of exponentially increasing the value of an investment.

 

One of easiest ways to calculate how compounding interest works with different rates of return is to become familiar with the Rule of 72. This rule states that ‘The number of years that it will take for your money to double is 72 divided by the interest (growth) rate’.

 

Therefore if you have $1,000.00 invested at 10% interest, then the number of years that it will take for your money to double to $2000.00 is 7.2.

 

72 divided by 10 = 7.2

 

Step 2: Use the tried and true method of investing in residential real estate.

 

Statistics show that over 98% of the world’s millionaires have made their money through property.

 

It should really not come as a surprise, because everyone needs a place to live, and generally at least one third of the population are renting. Property is a necessity, so it can never go out of fashion.

 

As the population increases, so does the need for housing. The laws of supply and demand therefore will ensure that prices keep rising.

 

Banks consider property to be one of the most secure investments and because of this they will loan you a high percentage of the value. This leads to the next principle.

 

Step 3: Using Other People’s Money or Gearing is a tool used extensively by the wealthy.

 

Why is using Other People’s Money so important? The reason is that it is possible to use ‘leverage’, also known as ‘gearing’ to obtain a greater result, than you could have obtained using only your own contributions. The word leverage comes from ‘lever’. As you know a small amount of force applied on one end of a lever, can produce force far greater than what was initially exerted. A lever has the effect of multiplying the power exerted.

 

In the case of investing, it is referred to as leveraging when you use just a small portion of your own money, say 10% deposit on a $300,000.00 house, and borrow (leverage) the rest, in this case 90%. The capital growth that you benefit from is then calculated on the full $300,000.00, not just the $30,000.00 that you personally contributed, having the effect of multiplying your capital gain.

 

Gearing allows you to purchase a far more expensive property than you could if you were using only your own money. Controlling assets of a higher value means that compounding growth has more to work on, and therefore your net worth will increase much quicker. Gearing allows you to build an investment portfolio more quickly than would otherwise be possible.

Automatic Wealth - The Internet Makes It Possible

Attaining wealth and prosperity is a dream most everyone has, but few ever achieve it. Why? The average person is stuck in a rut with a job they dislike and overwhelming debt. This cycle is hard to break, but many people are breaking out and achieving their financial goals through the Internet. The Internet has made it possible for millions of people to create automatic wealth, and there's still room for you! Here's how you can discover your Internet wealth dreams.

 

Create Wealth, Not Just an Income

 

With the Internet, the opportunity is there for you to create automatic wealth, not merely an income. You can build one automatic business or several until they reach prosperity - right from your own home computer. The Internet creates the ultimate wealth package because it's so vast in the number of people that use it, but yet, so personal in that one little niche market can earn you a fortune.

 

You can choose from thousands of business ideas and pick one small market to target for your business. A small market online, however, can mean big dollars for you because it might contain thousands or millions of prospects around the world. The Internet connects you to the outside world and doesn't limit you to those who drive or walk past your local store location.

 

Automated Business

 

Another reason it's more feasible to achieve automatic wealth online is because you can have an automated business. Automated means it can run on auto-pilot once you design your website and set things in motion. You can receive automated payments through online forms. You can automate an e-zine (email newsletter) to your customers. You can automate electronic products by email such as e-books or training materials. There are a number of ways to create automated wealth with an Internet business.

 

No Longer Wait for Paychecks

 

Another advantage of an Internet business is you can receive daily payments through your website. Many online business owners accept credit cards or use a third party payment processor such as PayPal or StormPay to accept payments from their customers. Through these venues, money goes directly into your account. This gives you a steady cash flow for your business so you can have capital for your income, business promotion, and inventory.

 

Tips to Build Automatic Wealth

 

• Use your free time at home to surf the Internet and find business opportunities that interest you.

• Join with one or a few others who are already successful so you can learn the basics of online business. Even if you need to make a small investment, it could be well worth the training you'll receive.

• Decide on a business that's right for you and schedule daily times to work on your business - promoting, analyzing, and building.

• Keep building until you've acquired enough automatic wealth to quit your day job!

 

Whatever Internet business you choose, remember that it takes patience and consistency to build an online business, just as it would any other type of business. The main differences are that you can work from your home as you're building the business, you can set your own work schedule, and you can earn a lot just by reaching a small niche market for almost any popular product. Start today with your new online business, and you too can soon realize your dreams!

Attract The Wealth You Deserve

Is it good when you have huge deposits in the bank, plenty of valuable possessions, abundance of anything of value? Nearly all, measured wealth is in monetary factors. We say that people are wealthy when we see their grand mansions, different cars, lots of jewellery, or expensive clothes.

 

We assess wealth by material possessions. Wealth can be inherited or created. Only few are born wealthy, most need to work hard and sacrifice a lot of things in order live like a prince. Wealth begets wealth if you know how to manage it.

 

So the more money you have the more you will become wealthy. Richness offers a lot of opportunities and opens closed doors. It elevates your social standing and gives you power. Ordinarily, it gives superficial happiness. Possessing lots of money is heaven here on earth. You can buy anything you desire, go anywhere you want and own anything your heart desires.

 

But too much wealth has also its disadvantages. You can read in the papers, wealthy people committing suicide; children of affluent families involved in drug addiction, or people committing murder because of money. Most of these people become distrustful of others and abusive of their fellowmen. Perhaps the saying that money is the root of all evil is true.

 

Problems with wealth are common that it afflicts people everyday. It affects our everyday relationships, strain on our family lives and even destroys friendships. Wealth problems are mental afflictions that still have to be dealt and overcome; otherwise, it will ruin your life.

 

Hypnotherapy is one way of dealing with problems related to wealth. Hypnosis has been proven to be effective for similar problems. It is a solution to real life physical, emotional and even financial crisis. Focus on going over that mental block concerning your wealth problem. Have a mindset of ruining the dilemma you have and just believe you can actually do it. Once you get over it, it will let you sleep better and eventually improve your life.

 

What does wealth mean to you? Wealth is not just about the amount of money we have, rather, it is more of a state of mind. It may be funny how people spend their lifetime to have abundant wealth and yet so little time enjoying it. Wealth may also be classified in other forms, like having abundant love from family or friends supplemented with good relationships.

 

A Couple of Steps To Help You Be Rich

Your advanced wealth planning strategies should not consist of you going it alone. The key to advancing your wealth is building a quality team of advisor's. Your advisor's will make you or break you. Advancing your wealth cannot and should not be done by yourself. Many people make the mistake of doing everything themselves. Doing everything yourself is fine but if you want to increase your wealth you will need advisor's. Money is an emotional subject for many people. Everyone goes through money problems (even the very wealthy), how you and your team handle your money problems is what counts.

 

First you should hire a bookkeeper. In order to increase your wealth you must know what direction your money is flowing. Is your spending helping or hurting you? Yes there are many people who balance their own check books but you need an outside opinion. The amount of money you are making is irrelevant when it comes to hiring a bookkeeper. Whether you are making 250,000 dollars a year or 25,000 dollars a year you should still have your own bookkeeper. Once you have your bookkeeper you can now go over your monthly financials. You will see what good and bad spending habits you have. Then you can work to out the bad spending habits and increase the good spending habits.

 

The next adviser you should have is your financial adviser. Hiring a good financial adviser is one of the best moves you can make. He can help you plan for retirement and other things. Having a 401 K with your company is not enough, be sure to get a financial adviser.

 

Getting a tax strategist should be your next step. It really does not matter if you are self-employed, own your own business, or have a 9-5 job. Getting a tax strategist is essential because your eyes will be opened when you see the way money is taxed for different people. You will also see how people are penalized with heavier taxes by bringing in a certain type of income.

 

When choosing your advisor's choose carefully. Do not just hire an adviser who makes money off of commissions. You want an adviser who practices what they preach and is successful at it. Your advisor's will be able to help you setup many advanced wealth planning strategies.