Is there even a secret to wealth?
The answer is BOTH yes and no.
YES, because there are a few simple fundamental wealth principles that will change your life and your financial well-being. But also NO, because the secret isn’t really a secret at all. It’s actually very simple and almost everyone has read about it or heard about it somewhere in their lives, but they just never implement it and that’s why wealth keeps eluding them.
The truth is there are a few simple, yet extremely powerful wealth rules that can rapidly accelerate your path to financial freedom once you start to implement them in your life.
These are not ever-changing strategies, but rather timeless principles that have stood the test of time and principles that will stay the same regardless of what strategies or industries you choose to use to get you to early retirement.
You can download the Wealth Rules Factsheet (containing these wealth principles) for FREE right HERE. I would recommend printing it out and looking at it every day and be reminded what wealth rules you need to adopt to live an inspiring and rich life.
The Wealth Rules are:
1. Do what you love, don’t work for money.
Money alone won’t make you happy. But on the contrary, lack of money can in fact make you unhappy in many areas of your life. You should do what you love and money should be used to get you closer to doing what you love each and every day.
2. Money is only a tool, but a tool that buys you time.
Don’t become attached to or fall in love with money. Money is only a tool which you can use to either make your life better or worse, depending on how you use it. Money is a tool with which you can buy time. Not only time, but also a better quality of life.
3. Earn more than you spend.
It’s not how much money you make, it’s how you use that money that will determine whether you will become rich or not. This is the most basic principle of money you’ll ever learn: Earn more than you spend. Or rather, spend less than you earn, and you will soon start to see the money piling up.
Then you should go invest that money to create passive income streams with it that will bring you closer to financial freedom.
4. Save at least 20% of your income.
The more money you save each month, the faster you can get to financial freedom. Most books say that you should save only 10% of your income, that way you won’t really notice that you have less money to spend each month. Personally, I’ve experienced that even when saving 20% of your income you still don’t really notice it. So rather save twice as much then you’ll get to financial freedom twice as fast.
5. Your money will work harder than you ever can. Invest it.
Few people realize just how great of a tool money really can be. Most people think money is only good for buying stuff and experiences, never realizing that money can be the hardest worker you own. Saving money is a very important step, but don’t stop there. Savings that just sit in your bank account doesn’t do anything to bring you closer to financial freedom, but by putting that money to work (by investing it in income-generating assets) will it bring you closer to financial freedom.
Investing in assets that will generate a passive income will literally make you rich in your sleep. And like Warren Buffett has said “If you don’t find a way to make money while you sleep, you will work until you die.”
6. Accumulate assets while selling liabilities.
Assets is what will make you rich. Accumulate more assets. Don’t only accumulate assets, but also work actively on getting rid of liabilities. The right assets will increase your income, while liabilities will increase your expenses. And as long as your expenses keep increasing, the longer it will take you to become financially free. Increase your income by buying assets and decrease your expenses by selling liabilities.
The same rule applies to your social circle. Get rid of the people who don’t support you and the people who are not contributing to your growth and happiness, while increasing the amount of friends who have a good influence on you and who makes you feel supported, loved and accepted.
7. Invest for monthly cashflow, not for capital gains.
Don’t only accumulate assets which will appreciate in value, but focus especially on accumulating income-producing assets. Passive income streams (not capital gains) is what’s going to make you financially free and then ultimately rich. When you invest for passive income, it then doesn’t matter much what the price of the asset does, as long as it keeps producing a steady and increasing passive income.
8. Keep increasing your financially literacy.
Only by constantly increasing your financial literacy in order to become financially smart will you be able to shorten the time span needed to become financially free and ultimately rich. The smarter you become financially, the better yields you’ll be able to generate on your investments. Not only better returns, but you’ll also learn how to use less and less of your own money to do it.
9. Solve problems and you’ll be richer than you can imagine.
If you look at the most successful people in the world (which includes the richest people in the world), they all work on solving problems for others. Money always follows value. If you provide value, you will make money. Provide massive value to millions or billions of people and you will become very rich.
10. Use leverage to create a greater impact.
Value is what separates the middle class from the poor, but Leverage is what separates the rich from the middle class.
In its purest form, Money = Value x Leverage.
Most people have never realized that value is the very first step towards making money. Without value, leverage means nothing. But without leverage, the amount of value you can offer others will always be limited. First make sure you always provide value to those around you, but secondly learn how to properly use leverage to bring that value to millions and billions of people around the world and you’ll be richer than you can ever imagine, by making use of OPM (Other People’s Money) and OPT (Other People’s Time).
11. Create your own snowball.
Passive income works the exact same way as making a snowball grow larger. If you buy income producing-assets and you keep working on adding a new income-producing asset every single month and you also keep re-investing the passive income from those assets into new income-producing assets, eventually you’ll create your own financial freedom snowball, which will keep increasing in size over time. The passive income it generates will get larger and larger, where each new asset’s income stream will automatically finance the next one. This is how real wealth gets built and this is why it’s important to focus on cashflow rather than on capital gains when investing. Cashflow will enable you to fully harness the snowball effect in your investment portfolio.
12. Don’t be the best in everything, hire the best in everything.
The most successful people in the world are not those who are the most talented in all areas of their lives, but rather those who have learned to focus only on their own strengths while harnessing the strengths in others by hiring them. As Robert T Kiyosaki has many times said “Business is a team sport.”
Successful entrepreneurs are not those who become the best jack-of-all-trades, but rather those who have become a specialist in a certain key area of business and then hired other specialists to be the experts in the other key areas of business. Too many people focus on their weaknesses and then say how difficult it is to become successful by doing everything themselves. But that’s the thing, you shouldn’t do everything yourself. Build a team. Focus only on your strengths and be the best in that particular field, but then also build a team of other experts who will be much better in all the other areas than you can never be yourself.
That way you will not only start to produce superior results, but you’ll also feel better about yourself and you’ll enjoy your work much more. Also, be an entrepreneur, not an employee. Focus on providing jobs, rather than looking for a job. Successful people create jobs, they don’t look for jobs.
13. Celebrate other people’s successes.
As long as you keep hating other people’s successes, you will never ever become successful yourself. Life is not a competition, but rather a journey where we get to build each other up and celebrate each other’s successes, as well as support each other during our failures. Be truly happy for others and celebrate their successes, and soon you’ll start to see success in your own life too.
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Disclaimer: The content of this website should not be construed as personal-, investment- or financial advice. The author’s is only sharing his own personal wealth philosophies as an investor.It is your own responsibility to make your own investment decisions and you understand and accept that the author cannot be held responsible for potential losses you might incur by following his personal investment philosophies. Whatever investments you choose to make is at your own discretion and you take full responsibility for your own investment decisions. Always remember that all investments carry risk, that investment returns can never be guaranteed and that you should only risk money you can afford to lose.