There is no secret to building wealth, despite what the gurus say. If there were secrets, they were released in the major recession of the 1990s. However, there are a few basics.
The first, and most important basic, is that wealth is not measured in money. It is measured in assets – things you can hold that have a value. There are many people in the world who are wealthy but still have a hard time paying their bills.
Goal One: Set Goals
You need to understand what wealth is before you can create goals for yourself. To some wealth means power. Others believe wealth is found at the bottom of a balance sheet. Others think it means having extra money in your pocket to waste on indulgences. Some measure believe wealth is measured by the amount they will leave to their kids.
The important thing to remember is that wealth is something personal. Your goals should not be based on what someone else believes wealth is.
Goal Two: Pay Down Debts
The first step to building wealth is to pay down your debts. Most adults pay more than $5000USD a year in unnecessary interest. That is wealth. If you could pay down your debts and stay out of debt, then you would have an increase of $5000 a year in expendable income.
After you set your goals, you need to work on different methods of reducing your debt. Many people can do this just by altering their budget for one year. Others can save a few hundred dollars (to use paying down debt) by changing to a more affordable credit card.
Some people learn how to do this by planning a trip. They must pay down their debt, and save the money for the trip before they can go. By the time this is done, they have learned more responsible spending habits, and taught themselves the art of budgeting money.
Goal Three: Motivation
Desire creates ambition and ambition creates action. This action generates cash – sometimes. Most of the wealthy people do not spend 5 hours a day in front of the television, or out entertaining themselves.
People need to learn how to work smart, not hard. That means that they must learn how to determine which wealth generating strategy will work in your situation. The budget has already increased income. Look for other ways to generate a passive income. Just make sure it involves you.
I knew one person who wrote a list of all the things everyone else could do to fix their financial problems. Of course this didn’t work. You need to start with yourself and then draw everyone else in.
Goal Four: Learn to Generate Wealh
Passive income doesn’t mean that you are doing nothing. You need to spend time with your family or your spouse and children will disappear. You need to spend time at work or your boss will fire you. The same goes for passive income. The money is there, but you need to invest time and effort into making it come to you.
However, many ‘work at home’ professionals do everything but generate income. They spend all their time marketing, creating a network, building reports, learning, and never seem to get around to the task of making money.
The people who succeed follow a certain behavior pattern. Those who fail also follow a certain set of behavioral patterns. Those who build wealth do not have a ‘turn off’ switch. They see no difference between spending the weekend at a flea market earning money than spending it at the beach. Of course, they also go to the beach…after the market closes.
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