By David Batchelor
Today, because of the multitude of choices we all have, it is easy to get distracted from where we want to go in life. I would like to offer you a few suggestions on how to find your path and stay on your path to great wealth, if you should choose to do so.
Step One: Decide to Be Rich
“The only difference between the rich, poor and middle class, is the kind of lifestyle they want. You don’t have to be psychic to tell a person’s future. If you listen to the words a person uses, they will tell you their future.”
I believe that words are a person’s most important tool. We need to constantly remind ourselves to watch the words we speak, simply because the words we speak and the words we think ultimately become the world we live in. As quoted in the Old Testament: “And the word became flesh” and “life and death are
in the power of our tongue”.
If you listen to different people’s words you will notice that poor people often say:
“ I just want enough money to pay the rent.”
“ I need a few dollars to get to the next pay day.”
“ After I pay my bills, I don’t know how my family can afford to eat.”
People who use words such as these, often focus only on financial survival. People who think or speak words such as these are generally constantly fighting for financial survival, regardless of how much money they make.
The middle class use different words because they have different ideas about how to use their money:
“ Our home is our most important asset and our largest single investment.”
“ We’re setting a few dollars aside every month, so we can afford the down payment on our dream home.”
“ We’re saving money for our children’s college education and our retirement.”
You’ll notice that the middle class focus on comfort. That is why so many of them say, “I don’t want to be rich. I just want to be comfortable.”
“The rich are rich because they are not focused on day-to-day short-term survival, or the expense column as the poor are. Nor are the rich focused on comfort and the acquisition of liabilities using credit, as the middle class is. The rich are rich because they focus on the long-term acquisition of assets… assets such as stocks, bonds, businesses and income producing real estate. Many times the rich will forsake meals, a steady pay cheque, a vacation, or the comfort of a nice home to build or acquire real assets.”
So decide to be rich, even if you are broke and penniless today
Step Two: Write Your Plan and Follow It
After choosing between being rich, poor or middle class, it’s time to write your plan. If you have chosen to be rich, even though you are broke today, read on. If you do not plan to be rich or to have too much money, then you need not read any further.
Here are a few basic goals:
- Change the characteristic of your income. Start a part-time business.
- Change the characteristic of your expenses. Convert personal expenses into business expenses.
- Place your business inside a legal entity.
- Have your business buy your assets.
- Harness the power of reinvesting.
If you’re willing to be a little uncomfortable to become very rich and retire early, develop your plan — even though you may be broke, but not poor, today. And if you are already rich, this plan may help you become richer and happier…even beyond your wildest dreams.
Step Three: Give Yourself Time
It takes time to build a business as well as an investment portfolio. Building a business is not the same as getting a job. With a job, you expect to be paid soon after starting work With a business, you may not be paid for years, if you are paid at all. That is why I recommend keeping your daytime job and starting a part-time business.
It is said that 90% of all businesses fail in the first 5 years. In my opinion, there are two main reasons for this sad statistic. One reason is lack of education and experience. Business is not something you can learn in school. Business is a combination of formal education, experience and guts.
The second reason is lack of money. We have heard the old cliche “Killing the goose that lays the golden egg”. When starting a business, many people kill the baby-goose before it’s old enough to lay the golden egg. In other words, most small businesses are undercapitalised, which means the new business owner tries to support him or herself and often a family on a business that is not yet up and running. So the business is drained of cash when it needs it most to grow.
See Also:
- The Wealthy Buy Assets, the Poor Buy Liabilities, and the Middle Class Buy Liabilities Believing They Are Assets
- The Frugal Guide to Building Wealth
- Budgeting Your Family Finances
- Improve Your “Save-ability”
If this has been helpful or you would like to ask questions, then please drop me a line at david.batchelor@e3.co.nz © 2002