Wealth Building Strategy

How much do you know about building wealth? There are universal wealth principles that must be known and used to attract wealth.

Step #1: Educate Yourself

Read the Seven Secrets of Wealth Building.

The process of building true wealth begins in the mind. It begins with who you are and what you want, and what you believe you can achieve.

All achievement comes from belief. Unless you can believe that you can achieve your goal of financial independence you will NEVER achieve your goal. You will have to motivate yourself to achieve your objective. No one will ever want it as bad as you do. The chief component of motivation is belief. It is the only thing that will motivate you to do what is necessary to achieve true prosperity.

There is no set price for your life. *YOU* set the price, and You will negotiate with life for payment of this price. *YOU* put a value on *YOUR* time on earth. What is your life worth?

Do some quick calculations of economic value. Most people in the job market trade time for money. If you stay in the labor market for 40 years, and you average an annual income of $25,000 you could expect to gross $1,000,000.

Is $1,000,000 dollars a fair price for your life? Imagine that it's possible for you to earn 10 times your current annual wage.

Many people end up with much less. Why?

Step #2: Get your financial house in order

1.	Pay bills on time to avoid late fees.
2.	Pay more than the minimum on your credit cards.
3.	Read your bank statement regularly.
4.	Build an emergency fund of at least three months' living expenses.
5.	Prepare a will.
6.	Shop around for the best insurance rates and coverage.
7.	Look around for and switch to credit cards with lower rates.
8.	Follow a monthly budget, and get out of debt.
9.	Adjust your W-4 annually to make sure you are paying the correct amount.
10.	Check your credit report annually for accuracy.
11.	Contribute to a retirement account.
12.	Comparison shop for the best deal on your mortgage or refinancing.
13.	Establish a clear picture of where you are now.
14.	Chart and follow a plan to build net worth. Equity is your investment capital. Never, ever spend your equity. The objective is grow your equity. Think of your money as seed: some you will keep out for food, the rest you will return to the soil for another crop. Use this form to help calculate your net worth

Step #3: Decide How you will accumulate and store your wealth

What store of value will you use: real estate, bank accounts, IRA, precious metals, stocks and bonds, or collectables? You can use them alone or in combination. Work to open channels to receive wealth

Step #4: Decide what the ideal portfolio balance is

Diversify your equity holdings between cash and non-cash assets, or liquid and non-liquid assets.

Step #5: Pay off all non-equity-building loans.

The objective is to generate and accumulate equity. Avoid the Earn-to-Spend mentality. Change your thinking, and begin to view money as something to save and invest. You want your money to work for you; not you for the money. Consumer debt produces only poverty and slavery. *YOU* must possess the mental disciple (will-power) to say *NO* to the pick-pockets of this world.

Step #6: Determine the future value of your equity (net worth)

In order to accumulate wealth you must know and understand how rate of return works. You will have to invest your assets in such a way as to take full advantage of the power of compounding to achieve your wealth-building objective. Compounding is the SECRET to wealth building!

There are four important variables: present value (PV), future value (FV), time (T), and rate of return (RR).

In order to have a store of wealth (equity) that produces a passive annual income at market rates you would need a vehicle that would grow the present value of your equity to the needed future value. For example, to have an annual income (AI) of $40,000 from an 8 percent rate of return, you would need an equity of $500,000 (FV = AI /RR).

Step #7: Determine the best equity-building vehicle to achieve the necessary rate of return.

It must be able to protect our equity from taxes and inflation.
It must be able to produce the compounding velocity necessary to achieve the net worth goal.
It must have market liquidity
It must be leverage-able
It must be stable

Step #8: Guard your assets.

Making money is one set of skills. Keeping it is another. As you work toward your financial goals, you will need to learn how to preserve the wealth you are creating. The new millennium is an infinitely more dangerous environment for wealth creation that were the 60�s, 70�s, 80�s or 90�s. New kinds of street gangs roam the streets seeking prey.....hoards of attorneys looking for victims to represent. The worst mistake one can make today is leave large amounts of personal assets unprotected. You must learn how to get your homes, cars and business entities out of sight through corporations, trusts and family partnerships to build a financial fortress around your assets. This information, which used to be available only for the super-rich, must be put to use by everyone. Why? Because if you're practicing your money skills, sooner or later there is a 100% probability that you will be sued....and any smart attorney will be able to look in the public record to find out what assets you have in your name. Therefore, the secret to smart money is to learn to live like a millionaire but be a pauper on paper. You used to be able to brag about your money. Not any more. Today, you don�t want to be a millionaire.....just to live like one. You must protect yourself today against the catastrophes of tomorrow.

Here are the eleven basic commandments of financial protection.

1. Avoid lavish or wasteful spending

2. Avoid putting assets in your name.

3. Never co-sign a loan for anyone, ever.

4. Carry adequate liability insurance.

5. Do not serve on a board of directors.

6. Avoid all "recourse" debt.

7. Operate your business from a corporate entity.

8. Do not go into business without a detailed business plan.

9. Never enter a partnership without a simple, fool-proof plan for getting out.

10. Never put all of your eggs in one basket.

11. Expect the best, prepare for the worst.