Income vs. Wealth

I would encourage everyone to read The Millionaire Next Door. It has been out for awhile and the information it provides is invaluable for those who want to accumulate wealth. Most of us have the wrong profile of what it takes to be a millionaire. We even think some folks are wealthy when in fact they are NOT. Even more interesting, we think some folks are not wealthy when in fact they ARE. Having a great salary or income does not necessarily lead to wealth. It all depends upon your spending and saving habits.

So many more of us could accumulate the wealth we desire if we took note of our buying behavior and its impact upon our success in this area. For example, how much is the "pride" of having a current model car worth? If you could get the make and model of the car you want but not new, maybe 3 or 4 years old and the same car new for an additional, say $5,000, $10,000, $20,000, would you? Even if you could, why? This is one example of the many buying habits we could reevaluate on our way to being wealthy. The book has many more worth your perusal.

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Seven Principle of Wealth - Number Seven

SEVENTH, be specific in your intentions/goals and prepare yourself to accomplish your financial goals. I know that intentions have infinite organizing power. You know the saying be careful what you ask for. I say KNOW what you want.

RECOMMENDED ACTIONS. Let me share what I do. I have very specific annual financial goals that I track on a monthly and daily basis. Therefore, I know before the end of the year whether I am on track to meet my financial goals. If I need to change my fees or prepare myself to add another area of practice, then I will do that to make the goals. If you have a job and you are not meeting your financials then now is the time to ask for a raise, take on more responsibilities, take a course/class to increase your marketability.

Even if you do not have all the answers, as long as your intentions are clear and you are prepared, opportunity will come knocking....open the door. Share your comments here or contact us at http://www.ythlaw.com/

Seven Principle of Wealth - Number Six

Six, estate planning is very important when you think about generational wealth. Estate planning is not only about providing for your family when you die but it also includes retirement planning. You want to have assets/money available to you when you are no longer working. When you begin the estate planning process, you cover all of your financial arrangements for the present, future and beyond.

Actions Recommended: Again as mentioned in other principles, you want to begin saving at your job and taking full advantage of any matched savings program. Retirement assets should not be placed in risky ventures as you age and even when you are younger your risks should be well calculated.

Seven Principles of Wealth - Number Five

FIVE, you must own not rent. There are so many financial benefits to homeownership.

RECOMMENDED ACTION: Take advantage of any first time home ownership incentives and programs. You may consider lease to purchase options that might be available. Take advantage of non-traditional outlets for home ownership, ie. foreclosures, sheriff sales, sale by owner. Though you may have to have more money up front, the savings are tremendous.

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Seven Principles of Wealth - Number Four

FOURTH, you must protect your assets. Any investment made must be prudent and wise. You do not want to expose the principle (the amount you have been saving, ie. 10% of your income) to loss. It is the money that your savings makes that would have any exposure but even with that money be prudent and wise.

RECOMMENDED ACTION: Start saving 10% of your income each pay period and place that amount in a guaranteed investment, (money market, certificate of deposit, bonds, savings account). Once the interest starts to grow, look for an investment opportunity for that interest income. The investment should be prudent and wise but does not have to be guaranteed. This may be your business venture or the business venture of someone you know who is prudent and wise. Your initial investment in another person's venture should be small and have a pay back within a short measureable timeframe. As the business and the person continues to prove themselves, your investment can be larger and for a longer term. Remember, the money invested here is just the investment income off of your guaranteed savings.

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Seven Principles of Wealth - Number Three

Now that we are saving money, what do we do with the savings? THIRD, you must put your money to work for you. You want to have your money create income for you whether you are working or at leisure.

RECOMMENDED ACTIONS: What can you do to increase your savings without depleting it? This will require some research and thought on your part. You have to educate yourself on what might be a good "investment". You have to read, research, talk with professional advisors and just as important if not more so, Talk To "Financially" Successful People. If you do not know any (increase your circle of associates), then read about them. I suggest you read and maintain in your library Think and Grow Rich by Napoleon Hill. You want the revised and updated for the 21st century version. You will educate yourself on growing your money. Depending upon your interest here are some areas to research for your "investment" purposes: stocks, bonds, mutual funds, money markets, real estate, rental properties, start an on-line business, start lending, start writing, and start speaking. Put your money into a venture that you have researched, start small and let it grow.

Here is one that I will do and keep you informed of the progress. I will start an on-line subscription business. I will provide information, knowledge and expertise, including access to me, on (1) taking care of your aging parents, the step by step process and (2) creating your legacy, the step by step process. There will be a minimum subscription fee for on-going access and information including free books, webinars, interactive dialogue with others similarly situated. You heard it first here.

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Seven Principle of Wealth - Number Two

SECOND, you must establish a budget. This is your very own budget but a budget nonetheless. The budget will include the cost of your essential needs and then include those things you desire within your budget, ie. 90% of your income. Obviously, you will not be able to satisfy ALL of your desires. However, an important desire is being realized each day, the accumulation of wealth.

ACTION RECOMMENDED, start with a budget worksheet. I found a basic "free" one at http://www.financialplan.about.com/. Print out 2 copies and fill in one copy. Then, take the second copy and fill it out with just your necessary expenses and then add those other expenses one at a time until you are at 90% of your income. The remaining items (which are desires) did not make the budget and must be eliminated for now. Focus your desire on and obtain satisfaction from growing your wealth.

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Seven Principles of Wealth - Number One

Over the next seven days I thought I would share ways to increase one's wealth and thus provide a legacy for your heirs. All of the ideas can be implemented by anyone. However, most are rarely followed or followed inconsistently. But when implemented, wealth follows.

FIRST, for every dollar you make, keep ten cents for yourself. You have heard the saying pay yourself first. Take ten percent of your earnings and save it. If you are a business owner, also save 10% of your profits. This is money not to be squandered but as you will learn from the other principles, it is to be put to work for you.

ACTIONS RECOMMENDED, if your company has a savings plan, contribute at least 10% or the maximum you can. If your company matches your savings, you definitely want to contribute the maximum match amount. Simple, yes, but many are not taking advantage of this HUGE benefit.

For the next 6 months, live off of 90% of your earnings by making your own coffee; eating at home and taking your lunch to work; drive less by car pooling and combining trips; and, take a vacation at home, there is more to see than you know. If you can do it for 6 months, you can do it for 1 year and so on.

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Multiple Streams of Income Helps Create Wealth

When you think of estate planning, many are of the opinion that it is all about wealth. I remind people that it is all about your loved ones and you. However, if money is of interest to you then I thought I would share this video with you as you look to build your wealth for your loved ones. In today's economy and actually at all times multiple streams of income can serve as a safety net for you and your family. Enjoy the information.





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Money, Money, Money

As I was doing my bills the other day, my mind could not help but go to the current state of the economy. You have listened to the gloom and doom news comparing our current state of affairs with the Great Depression. Well, what did we, or our parents/grandparents, learn from that period. They learn to save prudently and cautiously. I can not tell you how many of my clients have benefitted from that saving mentality. Over the generations, the family members of my clients have passed on the wealth in hope of making my clients' life better and it worked! Now we have our greatest challenge. How will future generations benefit from our response to this economic crisis? What should we be doing, now? Among the many things we have to do is work together as a unified society. Individually, we have to take responsibility for ourselves and those dependent upon us. We have to plan for our future generation by taking such actions as making a will to pass on our assets and our legacy. We have to set up trusts to hold and distribute our assets, whatever they may be, in a responsible manner. We have to do these things even when we think we have nothing, especially if we think we have nothing. We never know exactly what the future may bring. However, we can and should plan for the future that we hope for, for ourselves and for our children.

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