How Does One Create Wealth?
The strategies used for creating wealth seem so simple, yet many people have difficulty achieving wealth. Why is that? We will discuss some of the strategies wealthy people use to amass their enormous wealth and discuss ways in which we can do the same.
1. Controlling One’s Emotions
Emotions dictate and influence most of our decision-making when it comes to spending money. Many times we walk into a store to buy a particular item, but end up buying two or three more items that we would not have bought if we hadn’t gone into the store in the first place.
Our decision to buy those extra items just because we saw them in front of us explains the power of emotions in telling us to spend, spend, and spend again.
However, once we learn how to control these emotions, we will become wealthier. The more we spend the poorer we become, but the less we spend the wealthier we become. Sometimes we go even further and over spend by overloading our credit cards with unnecessary expenses. This leads us to our next topic: limit our borrowing.
2. Limit Borrowing
We must try our very best to limit the amount of money we borrow. The less we borrow the more money we will have to save. The person with the wealthy mindset will put some money aside for that sudden unforeseen emergency.
Many people would say one should have a credit card handy for emergencies, not a wise idea. Getting a credit card for emergencies set the stage for getting deeper into debt if and when that emergency strikes.
A much better approach would be to have some extra money set aside to use. So, when that sudden emergency comes, that money we had set aside will take care of unforeseen expenses incurred as a result of the emergency. This approach will not get us into debt, but using a credit card for emergencies most certainly will. This lead us to our next topic: educate oneself daily.
3. Educate Oneself Daily
How can one expects to achieve wealth without diligent study? Not educating oneself daily will definitely not help to create that illusive thing called wealth.
People who truly want to become wealthy should learn about finance, learn how things work on Wall Street, learn the different investments strategies, and most of all, learn how to be successful in the stock market. Should Mr. Genius invest in stocks and bonds or should he invest in gold? Why would people want to invest in gold in the first place?
Based on common knowledge, people invest in gold when they think that the U.S. economy will go into a recession. Therefore, these folks quickly remove their investments from stocks and bonds and thus invest in the precious gold metal instead.
History states that gold does not lose its value as fast as other investments do, but neither does it gain value quickly either. So, people invest in gold during large economic crisis like a stock market crash. Doing so prevents them from losing large sums of money in the form of investments.
4. Wasteful Spending
One must refrain from wasteful spending in order to become wealthy. One way of doing so is to stop using ATM cards at other banks other than our own. Most of us don’t know that when we use our ATM cards to withdraw money from other bank’s ATM machines we lose money. We lose money because other banks charge us for using their ATM machines and our own bank charge us for the transaction because we didn’t use its ATM machine.
5. Creating Wealth Quickly
Many of us do not want to wait 30 years in order to become wealthy. This strategy sole depends on investing in the stock market or saving until retirement. But, who wants to wait until retirement to become wealthy. A large majority of us wants to become wealthy now! But, how do we do that! Simple! Start buying and selling.
Buying and selling can catapult the ordinary person into instant wealth. Investing in the stock market and saving until retirement produces wealth. However, this wealth takes a very long time to manifest. Therefore, buying and selling provides the fastest way to becoming wealthy.
6. Income Level and Wealth-Building
People can become wealthy regardless of how much money they make. A person’s income level should not be the determining factor of whether or not that person becomes wealthy. It all depends on how people spend their money and the decisions they make in spending that money.
Good wealth-building decisions in regards to spending money will always lead to wealth. While bad wealth-building decisions, will often lead a person to financial ruin. People who make bad wealth-building decisions will find themselves in extreme debt, which often leads to bankruptcy.
7. Creating Wealth with Credit Cards
Financial experts will often warn against using credit cards, saying that credit cards will often toss people into debt and bankruptcy. Indeed, credit cards have the potential to lead those undisciplined, down the path of financial ruin. However, financially disciplined and wealth-conscious folks use credit cards to their advantage. They use credit cards to build wealth instead of using it to get into debt.
For example, Mr. Gee charged his credit card for the purpose of stocking up on cell phone accessories for his cell phone retail store, then pay off the debt at the end of the month after pocketing the markup on the sale of cell phone accessories. This scenario shows an outstanding approach for using a credit card to build wealth, instead of using one to get into debt.
So, as a student of creating wealth, what should a person do with the profits earned on an investment or on profits earned from sales? According to the world renown, richest man in the world, Warren Buffet, people should reinvest their profits. This means that investors or business owners should not spend profits earned; they should instead put this profit back into their investments or businesses.
9. Excellent Credit
Most wealthy people possess excellent credit before they became wealthy. In fact, if they didn’t possess great credit, they probably wouldn’t have achieved wealth.
Many millionaires accumulate their wealth through real estate transactions. People don’t normally buy real estate with cash money, instead they take out mortgages, and getting approve for a mortgage requires great credit. Therefore, one can see here that excellent credit increases a person’s chance of acquiring wealth.
Getting approved for a credit card also requires outstanding credit. In our example above we saw how the proper use of credit cards can increase our personal wealth by allowing us to allocate finance into our businesses.
10. Fear of Failing
Use the fear of failing to achieve your success in creating wealth. Wealthy people use the fear of losing wealth to keep their wealth. They work extra hard on wealth-building strategies. For example, people with mortgages who have been through the rigors of renting, use the fear of going back under the claws of a landlord to make sure that they do whatever it takes to pay their mortgage on time, so they won’t lose their homes.
11. Work Lots of Overtime, Work a Second Job, or Work 7 Days a Week
A person who wants to create wealth must spend less and save more, bring in more money or add more funds to the budget. Working lots of overtime, holding a second job, or working seven days per week will make it possible to add more funds to the budget. This extra money can be used to pay off debt, save, and invest.
12. Do The Opposite
Do the opposite of what everyone else appears to be doing because most people do not have wealth. So, if a person does the things that everyone else doesn’t seem to be doing, then that person will become wealthy.
People must save 10% of what they make in order to become wealthy. Therefore, we must not spend all the money we make, regardless of how deep we are in debt.
14. Limit Spending
We must spend on the absolute necessities of life in order to become wealthy. Do not spend on things we don’t need. Once in a while rewarding oneself can be a good idea, but do so sparingly.
Do not spend in order to look rich instead spend in order to become rich.
15. Do the Things that Wealthy People Do
Wealthy people have paved the way for all who inspire to become wealthy; so why not emulate them! In other words, do what the wealthy do!
16. Change Yourself
Change yourself instead of trying to change others. We have ultimate power over ourselves not over other people. Many of us feel compelled to try and change other people, not a wise idea. When we change ourselves, we will have the power to influence change in other people, so they too can acquire wealth.
How to Get Rich Using Financial and Manpower Leveraging
We all want to become wealthy, but most of us don’t know how to start or what steps to take.Therefore, we will talk about the single most powerful method that most wealthy people use to become wealthy.
That very powerful method is called Leverage. Leverage is the difference between financial independence and working a 9to5 job well after retirement age.
Leverage is doing a lot more with less.
Horsepower leverage: The car that has a 2,000 horsepower engine is a prime example of this concept. The power of this car is equivalent to the power of 2,000 race horses. The car is doing more and it is only one entity that being the single engine (with less); it is producing the power of 2,000 horses, so I could just buy one motor car and save myself thousands of dollars from buying 2,000 galloping race horses and land to keep them.
Man Power Leverage: using manpower to accomplish tasks that one person cannot accomplish alone.
Man Power Leverage: Instead of working 80 hours a week 40 hours per normal working hours and 40 hours per week working a second job or working overtime, I would get myself a Mc Donald Franchise, employ a few employees and just show up to the office at 12pm to look over the books for 4 hours and then go home, while making thousands of dollars annually on salary that I decide to pay myself because it is my business. All revenue flows through the business owner first, so guess what he/she has the power to spend that money, either to pay employees or purchase new products and services for the business.
The man hours all the employees contribute to the business is way much more than what the owner of the business could ever contribute. Therefore, the business owner is using leverage to create wealth just like the owner of the motor car who uses his car to do the work of 2,000 race horses (driving back and forth from his day job).
Financial Leverage: using money you don’t own; in other words, using other people’s money.
A prime example of this method of becoming wealthy is applying for a $250,000 mortgage loan. The new home owner used the bank’s money to buy his home; he then has to pay the bank back at a rate of 5% interest over thirty years, but he doesn’t mind that because he is looking at the big picture. His home has equity of $750,000 because he got the home for $250, as a result of the real estate crisis.
Here, the home owner has used financial leverage to make himself $500,000 richer because a few years went by and he was able to sell his home for 750,000. Now, this home owner has made himself $500,000. He then decided to use this $500,000 to buy himself a Mc Donald Franchise paying down $250 and having the extra $250,000 as cash-on-hand for miscellaneous business expenses and emergencies.
4 Ways to Create Wealth
Join the Military
By joining the military, individuals can get qualified for the military’s guarantee home loan program with zero money down.
Invest in new proven private company that is about to become public.
Technology Leveraging: Use technology such as the Internet to become wealthy.
Write an Ebook
Write an ebook and have people download it;upload quality videos to Youtube.
How Do Rich People Become Rich?
We are not talking about winning the lotto, inheriting wealth, rock-stardom, or becoming a pro-athlete, but instead we are talking about the people who earn their riches by working hard and following wealth-creating strategies; Warren Buffet, Donald Trump, Steve Jobs, and Bill Gates comes to mind.
We will go over 3 ways in which rich people become rich. It seems as if the rich always find a way to get richer, but the poor can do something about it by getting wiser and becoming rich also. By learning how the rich folk get rich and keep on getting richer, we can hopefully start our own journey of becoming rich also.
Investing in stocks and bonds
Warren Buffet invested in stocks in order to amass his incredible wealth, and you can too. In fact, it is much cheaper to invest today than in the 70s when he started investing.
Now-a-days it is very simple to invest in stocks. Long gone the days when investors had to employ licensed stock brokers to trade their stocks or bonds. Now, all investors have to do is familiarize themselves with a few stock trading terms and definitions, investopedia.com is such a place for the regular lay person to go and learn about words and phrases that are used in stock trading.
After learning investing terms and their definitions, investors can then sign up to one of the major online trading websites, such as TD Ameritrade and E-trade. TD Ameritrade charges $9.99 for each trade (For instance, if you buy a stock you would pay $9.99 and if you sell that stock, you would also pay $9.99). So, instead of paying hundreds of dollars to a particular stock broker (to do your stock trading for you), investors can instead save money by buying and selling their own stocks.
Owning their own businesses
Donald Trump used his business savvy in real estate to amass his enormous wealth, and you can too. Any time is always a good time to invest in real estate, when the market is down or when it is up. When the real estate market is down, homes prices are low and homes are cheap; pretty much anyone can own a home if that person has decent credit, during this time.
On the other hand, when the real estate market is up, home prices are high. This is usually the best time to sell real estate if you are planning on selling. Donald Trump understands this process very well and he capitalizes on it every chance he gets. He may not necessarily sell his properties after buying them at reduced prices, but he buys them and rent them out in the form of hotel rooms. This leads us to our next discussion of “Why rich people become rich by owning their own businesses.
The reason why rich people become rich by owning their own businesses is because they create their own successful business module or buy into an existing one, such as buying a franchise (7 Eleven, Mc Donald, Burger King, etc!); most of all though, they are passionate about the business modules they choose to create or buy into.
Common sense tells us that if a person is passionate about a particular activity such as owning a bakery distribution business or owning an internet business that person is going to become very good at this kind of business module because this person perceive this kind of activity as fun, similarly to how people treat their hobbies. Therefore, it is just like making money from your hobby. As the saying goes, “if you love what you do, you will never work a day in your life.”
Steve Jobs and Bill Gates used technology to amass their enormous wealth. How did they do it? They created technologies that changed the world. For example, Steve Jobs revolutionized cellular communication by coming up with the “Iphone, Ipod, and Ipad,” thus, single-handedly inventing pocket computing.
Bill Gates on the other hand used technology to become the richest man in the world; his invention was also legendary. If it wasn’t for Bill Gates’ invention of the Personal Computer or PC and Microsoft Windows, we possibly wouldn’t have the internet. We would still be stuck in the dark ages of using mainframe computers which takes-up an entire room and using DOS-operated software to do our business on the computer. We possibly wouldn’t even have the internet to upload videos to.
By learning how Steve Jobs and Bill Gates amass their enormous wealth with the help of technology, we too can utilize the power of technology to amass enormous wealth for ourselves and our families. We just have to solve a technological need. There are many such technological need, we just have to look in the right direction with the right mindset, and we will find them. This was exactly what Steve Jobs and Bill Gates did with their inventions. Google search is another technological concept that derived from the need to find things on the internet, Youtube another, with the need to display recorded video footage online; the list goes on and on.
So, when are you going to start looking around for the next technological need that needs solving?
If you would like to see the video of “how rich people become rich,” please visit it here at this link: http://www.youtube.com/watch?v=etTBs2Sw6Ag
How to Create Wealth Using Referrals?
Rich people make money on pretty much anything they can get their hands on and referral is another very simple and effortless way they make money. Referring potential customers to companies that you do business with can put a few hundred dollars in your pocket weekly or monthly.
Refer your friends and family to companies that you know and trust and to companies that have a referral program or affiliate program. For example, if you use a credit repair company to provide credit repair service for yourself, you can also make a few hundred dollars monthly by telling your friends and family about such company that helped you out so much, possibly helping you clean up your credit, so you can own a home. Your friends and family will believe you because they will know whether or not you have recently bought a home.
In terms of using a business to do the referring, rich people use their businesses to forge affiliations or referral agreements with other businesses. Therefore, whenever rich people provide services to their customers through their business, they also make money when they refer their customers to another company or place of business. So, it seems that the rich is always getting richer, but you can too, if you follow the formula that the rich person uses to become wealthy.
Here is the link to this very informative referral video. You can even embed it to your website: http://www.youtube.com/watch?v=W1XYBrhCL4Y
Fastest Way to Get Rich
We had mentioned in our previous Wealth-Creation strategy that buying and selling will get us wealthy the fastest. But, how fast, very fast! What kind of buying and selling will get us rich the fastest?
We will go over two buying and selling approaches that will get us rich the fastest.
Franchising (Proven and Successful Business Module)
Buy a 7 Eleven Franchise. 7 Eleven is the cheapest upper echelon franchising company that the regular person can use to become wealthy.
It cost about $100,000 to $350,000 to open a new 7 Eleven store or to buy an existing one.
The company takes 50% of the profits; however, 7 Eleven pays all the bills for the franchisee except employee payroll. 7 Eleven would pay the lease, electricity, equipment etc. The company also supplies franchisee with food and grocery supplies.
Buy an Existing Gas Station/Convenience Store Business
Buying an existing gas station and convenient store business will provide the opportunity for an entrepreneur to tap into a proven cash flow source, as opposed to starting from scratch by opening up a new gas station and convenient store. So long as the gas station and convenient store is located in an area that brings in a lot of business.
Gas stations are essential to the day-to-day activities of daily living. People cannot drive to work on an empty gas tank. Gasoline is always needed for our cars and trucks. We cannot ride a bicycle on the Highway to go to work or to go to the supermarket to buy groceries. We need our cars or our SUVs. So, we cannot live in modern or developed societies without the use of gasoline in our vehicle. Therefore, the gas station business is a no-brainer.
The convenient store with the gas station is even better because when people drive up to the gas pump to pump gasoline in their vehicle, they usually run into the convenient store to grab a cup of coffee and a pastry. With this being said, a convenient store gets traffic as a result of a gas station being on the premises. This is the reason why a gas station with a convenience store is a quick way to become rich.
The cost for starting or buying a gas station/convenience store business could range from $250,000 to $750,000.
Before venturing out and buying your first gas station and convenience store, make sure you thoroughly do all the necessary research because starting any business without careful planning is doom to fail, even a business as promising as a gas station/convenience store.
The cash flow for a 7-Eleven and a gas station/convenience store business in a prime location can be any between $1 million and $5 million, depending on the location.
2 Things that Create Millionaires
The Mindset of a Millionaire
The millionaire’s mindset is different from people who aren’t millionaires. In fact, people who become millionaires acquired certain millionaire traits long before they become millionaires. They didn’t become millionaires and then develop these traits. This is the reason why many people who win the lotto end up broke after a few years of winning the lotto, while the millionaires who earn their millions through hard work, don’t usually lose their millions. If one has all the money in the world and he/she doesn’t know how to manage it, it will melt away like butter touching a hot frying pan.
People with the millionaire mentality or mindset think differently from the normal person who goes to work and work for a salary. The salaried worker’s main objective is padding the wallet by increasing salary. On the other hand, the person with the millionaire’s mindset main objective is getting rid of high interest loans and other loans for that matter. The outcome of this approach is an increased net worth, the millionaire’s goal. How can the millionaire-mindset individual increase his or her net worth? Here is how!
Multiple Streams of Income (The Millionaire’s Hobby)
People who become millionaires spend most of their time going over ideas in their minds about how to increase their net worth. Millionaires are the first people to know that a regular salary from a job cannot facilitate the road to millions, so they spend most of their time probing for opportunities that will give them a steady flow of passive income over time. Passive income is achieved from a few hours of hard work done once. These few hours of work turn the money-leaking faucet on for a lifetime and beyond. Work once and get paid for ever (the millionaire’s motto). An example of passive income is getting royalties from a published book.
Glenford Robinson is a Clinical Lab Scientist and Entrepreneur. If you would like to read more of his “Wealth Creation” articles, please visit https://www.mstardom.com
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To Be Continued…keep checking back for more “Creating Wealth” information. This blog is updated regularly.
I am a Clinical Lab Scientist, entrepreneur, investor and trader (stocks and Forex). I enjoy writing and publishing articles online.