PART III
DEVELOPING YOUR WEALTH BUILDING STRATEGY!
Part III is about understanding the distinctions which cause some people to become wealthy while others remain poor. Wealth Building is a methodology. If you follow the methodology, you will become wealthy. It’s that simple.
“In life, it's not how much money you make that determines how wealthy you become. What’s more important is how much of what you make you save for the future.”
LARRY BALLARD
THE POOR ARE POOR BECAUSE: They are hooked on Madison Avenue Consumerism, demand immediate gratification and spend their money on non-income producing consumer goods which are liabilities that drain their cash and reduce their net worth. In effect, their materialism causes them to “lose control of their finances.” This, in turn, puts them in debt and turns them into stressed out, unhappy, indentured servants. Additionally, they by and large derive their income from a single source (their salary), so regardless of how much they make they are dependent on their companies for their financial security because if the company they work for gets in trouble, as many have, they likewise get in trouble. Also, they live off the money from their paychecks, which are immediately taxed, vs. earnings from Capital Gains & profits from real estate which are tax deferred (more on this later). Lastly, they live to the full extent of their means so if adversity hits they have inadequate reserves to fall back on.
THE RICH ARE RICH BECAUSE: They either pay cash for consumer purchases or they don’t make them, consistently spend less than they make and save the difference, have multiple sources of income, and maximize their tax benefits so they, not the government, get their hard earned money. In essence, they have a plan and work it. They 1) Set aside a predetermined percentage of their income which they religiously save. 2) Have a predetermined plan for how to ALLOCATE their investments in order to provide optimal growth and security. 3) Determine the specific investments they intend to make and then automate the process so they always “Pay Themselves First.”
It’s so simple, yet so few people get it. If you spend everything you make you will be poor! If you put money away for the future, when the future gets here you will be prepared!