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6 Golden rules of building wealth

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6 Golden rules of building wealth 1

6 Golden rules of building wealth 2

If wealth creation was so easy, why is it that people don’t retire comfortably? I believe the recipe for building true wealth rest on 6 golden rules, which I have outlined.

My wish for you is to apply the information to prosper.

Rule1. Use passive income to build time

There are plenty of ways to build wealth.

Which one are you relying on?

  • The stock market
  • A pension fund
  • Retirement annuities
  • A job
  • A new business
  • The lotto
  • Wealth is not about money, it is about time and realistically the only way to free up time is to increase your income and reduce the amount of hours you work.

    Would you rather work 8 to 10 hours for a boss each day or spend more time at home with your family? Drop your answer in the comment box.

    How about dedicating more time to your hobbies, travelling, or starting a business? Sounds great, but some of you may view this a wishful thinking considering that there are debts to pay and mouths to feed.

    Middle class individuals work 8 to 10 hours each day. They work for an income which functions on a no work no pay basis income is linear in nature- the more you work the more you get.

    Free time is limited and comes in the form of annual leave. Promotions mean more responsibility and more responsibility means higher stress levels. The bottom line is that middle class work harder for little reward.

    So why invest time and effort in a lifestyle that forces you to get out of bed every morning?

    Active Income: income earned when you work for yourself or somebody else when you stop working your income stops.

    Passive income: Income earned without actively working for it. Examples includes interest on your bank account, rental income, dividend’s, royalties and business income

    Robert kiyosaki, author of the New York Times International bestseller “Rich Dad Poor Dad”, offers the following definition of wealth.

      The number of days you can survive, without physically working (or anyone else in your household physically working) and still maintain your standard of living

    As the definition indicates, real wealth is measured in time, not currency. For example. If your monthly expenses are $10,000 and you have $40,000 in the bank your wealth is 4 months ($40,000 ÷ $10,000). In other words, you can use your savings to maintain your standard of living for four months without earning an active income.

    6 Golden rules of building wealth 3

    Rule2. Assets create wealth by generating passive income and time.

    The wealthier you are, the more passive income you have in relation to your expenses.

    That all good but how does one create passive income? The answer lies with assets. An asset is anything that puts money in your pockets. So it goes without saying that the more assets you own, the more passive income you could potentially earn.

    If you are tossing your hard earned cash at furniture, vehicles, clothes, holiday homes, credit card debt for examples, you are accumulating liabilities, not assets.

    Liabilities creates debt ( more specifically, bad debt) and more problem for you. What you should be investing with your income is generating assets, which may include cash investments, real estate, shares, royalties, franchises and businesses.

    6 Golden rules of building wealth 4

    Rule3. Focus

    So how exactly does one create and concentrated thoughts? It is very easy.

    Foucus on setting goals by simply asking, How will I accomplish that? Let sat that your objective is to be financially free in ten years.

    How will you accomplish that? Add a goal to answer this, for example. I want to earn $1 million passive income per annum after ten years in today’s time value of money. How will you accomplish that? Goal: invest in residential property and sell intellectual property online. How will you accomplish that?

    Step1. Get comfortable. Sit on a chair or lie down on your bed try and clear you mind.

    Step2. Start by taking a few deep breath. Breathe in slowly through your nose and exhale through your mouth. Hold the exhale for a few seconds.

    Step3. As you breathe, focus your mind on your heartbeat. Continue to focus for the next two minutes.

    Step4. Feel your heartbeat in your chest. Notice how your heart rate changes between inhalation and exhalation.

    Become more aware of your heartbeat which enabled you to feel beating sensations in various parts of your body. It can be said that the more your focus, the higher your awareness and the greater the results.

    Did you know that the human brain produces approximately 70,000 thoughts on an average day? That means we have a thought every 1.2 seconds.

    How can you expect to accomplish big goals if your attention is spread across tens or hundreds of different thoughts each day? If you currently have a plate full of tasks to complete or goals to achieve, you may want to step back a bit to refine your focus in my opinion.

    You must have one challenging (yet realistic) goal that aligns with your purpose, and work towards that goal everyday.
    If your goal in life is to build wealth, you must focus on becoming financially free. To help you set your financial targets.

    6 Golden rules of building wealth 5

    Rule4. Leverage

    Leveraging means achieving more with less effort. It one of the most powerful tools that one can use to create success and wealth.

    There are two ways to build wealth using leverage:

    1. Use more forms of leverage: develop you network. Become financially literate. Use other people power develop courage to act on good ideas, learn from failures and use your spare time to invest in property or start a part time business.

    2. Use financial leverage: how long do you think it will take to save $1 million in a bank account that pays 10% interest per year? Let assume that you open your account with $1, 000 and contribute $500 each month without making withdrawals it will take you approximately 30 years!

    how long will it take you to borrow $1 million at 10% interest and invest it elsewhere to earn a return of 30%? Do you see what’s happening here? Average people try and use their own money to become wealthy, whereas rich people use other people money to build wealth.

    Financial leverage is about using debt to get ahead. Be careful with this one. When I say debt, I am referring to good debt not bad debt. Do you know what the difference is Bad debt costs you money whereas good debt makes you money.

    Debt taken on to pay debt is a loosing strategy.

    It eventually spirals out of control and may damage all hopes of you ever becoming rich. Not only that it is one of the primary stress related suicides and health problem bad debt is extremely expensive, so the best way to manage it is to avoid it.

    Types of bad debt include:

  • Credit card with outstanding balances
  • Personal loans for holiday, quad bikes or boats
  • Retail store cards with outstanding balances
  • Overdraft on your cheque account
  • Vehicle financing
  • Any credit used for financing lifestyle, clothes, food, gifts and others consumable

  • The following scenario highlight two bad debt situations.

    Scenario1. Suppose you purchased the car of your dream for $250,000. The bank grant you finance at 15% interest per annum over five years. Your monthly repayment is approximately $6,000.

    As soon as you drive the car off the dealersfloor, it loses about 20% in value. This is a bad debt situation as you need to cater for a depreciating asset that doesn’t generate any passive income.

    Scenario2. Suppose you paid for a $40,000 holiday using your credit card. The debt will be paid over a three year period at 20% interest.

    Your monthly repayment is almost $1,500. After spending two weeks in Canada you return home feeling refreshed.

    Good debts is money that is borrowed from other people or institutions to purchase income generating assets. It may be a loan to start a business or purchase property.

    The rich use good debt as a tool to generate enormous wealth. However, it is a double edge sword. It can bring you great returns or kill your cash flow if you are not careful.

    Here is why good debt is so powerful

    Suppose a property investor is interested in buying a flat for $100,000. He/she has the option of paying cash or borrowing money from the bank (i.e using leverage). Lets assume he purchased property with cash.

    What is his return after one year if he makes profit of $20,000. His return is 20% (20,000 ÷ 100,000). Suppose our investor pay a $10,000 deposit and is granted a $90,000 bond. What do you think his return is now?

    After one year his profit is $12,000 ($20,000 less bond costs). His return 120% (12,000 ÷ 10,000).

    Not bad considering that you are likely to get 13% from the stock market in the long term. Do you see how financial leverage boosts the return on your money? This is what you are after growth.

    The quickest and easiest way to become a millionaire is to generate passive income without using your own money and time.

    6 Golden rules of building wealth 6

    Rule5. Build a surplus

    People struggle financially because they don’t know how to work with money. The harsh reality is that money creates problems.

    For most people, the more money they have, the higher the debt and the poorer they become.

    If you were given $5 million today, what will you do with it? Mail your answers to Admin@mitrobe.com.

    Some of you may quit your job, pay off your bond and go on permanent vacation. Others may leave it in the bank and live off the interest.

    The chances are that in five or ten years the average person will be in the same financial position or worse off. If you quit your job and start spending, your money will soon run out.

    If you leave the $5 million in the bank the cost of living will catch up with you.

    There are many stories of people who inherited or won a large sum of money only to end up bankrupt on the streets. I like to think of it this way. It is impossible to be financially free without learning how to take control of your money.

    Creating wealth is not about how much you earn, it is about how much you manage your surplus income or extra cash. In order to get to where you want to go, you need to know where you are financially today.

    By analyzing your personal income statement and balance sheet, you will begin to understand the state of your financial affairs.

    An income statement show how you are performing financially by giving a breakdown of your income and expenses.

    It shows you your net cash flow which may either be a surplus or shortfall.

    A balance sheet reflects your financial position at a given point in time. It provides details of where money is invested (assets) and method used to acquire finances (liabilities).

    It indicates your net worth which is equal to total assets less total liabilities

    6 Golden rules of building wealth 7

    Rule6. Follow your life Purpose

    Have you ever wondered why some people are good at making money? Remember that odd-looking kid with serious halitosis in high school that seemed like he’d drop out at any stage?

    He received the D’s and you the straight A’s? in your mind you were destined to be great and that other kid, well, not so great.

    Yet ten years down the line he lands up being a multi millionaire.. where the hell did things go wrong?

    You are at the local Woolworths store, hoping to fill up a few gaps in your kitchen cupboard. Cash is tight and instead of your usual list of forty plus items, your wallet has restricted your shopping to a few essentials.

    At the check out line you run into an elegant looking woman. You recognized her as that weird kid at school who used to burn lunch money off you.

    It turns out that she is highly successful and there you are counting every cent while she is planning her next family trip to UK.

    Once again where the hell did things go wrong?

    While some people live glamorous lives, the rest work hard and struggle financially, for them , the rat race seems never ending.

    So what is life purpose? Ask yourself. What do I truly love to do? How could I use my talents to create something great or make a difference? Even better.

    How do I make money from what I love doing? These are tough questions, I know, but without a philosophy that reflects the way you want to live how will you ever be able to play your biggest game or make the right choice? It like planning your next vacation to somewhere.

    Unfortunately, too many of us get stuck worrying about transportation to the airport or which clothes to pack, rather than uncovering where that somewhere is.

    Most people go through life without understanding their purpose. It like trying to manage a project without knowing the ultimate end goal.

    As a result they start relying on others for support, follow their beliefs and eventually become part of the crowd.

    We do this because as human beings we seek comfort and security and besides, it is much easier to follow someone else recipe than build your own from scratch.

    Question for your mind

    • Why do you do what you currently do?
    • What get you up in the morning?
    • What is your passion?
    • What is your dream about?
    • What is important to you?
    • What things are you conscious about?
    • Do you believe in your dreams Why and Why not?

    GOOD READS

    BECOMING A MILLIONAIRE WHAT YOU MUST KNOW

    Education in Real Estate for Newbies

    HAVE ANY QUESTION AND SUGGESTION YOU WOULD LIKE TO MAKE OFFICIAL

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    3 Comments

    3 Comments

    1. Vox

      May 9, 2019 at 8:48 am

      These sound like good ways to set the framework for wealth. I am more vigilant about my finances than I was before, so I am happy to get a mindset boost. Thanks for sharing.

      • Mitrobe

        May 9, 2019 at 10:24 am

        you welcome Vox/. we are glad we are off importance

    2. oprolevorter

      May 16, 2019 at 1:38 pm

      Respect to op, some excellent information .

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    Becoming a Millionaire | A step by step guide

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    Becoming a Millionaire | A step by step guide 8
    Becoming a Millionaire | A step by step guide 9

    BECOMING A MILLIONAIRE

    Wait just give us 1 minutes to change your life, are you a business owner, or you take up a paid job. You can actually become a millionaire?

    Despite the chance that you too will blow millions, the process for you or anyone to become a millionaire has been consistent over the years, nothing changed.

    You know your goal, you know your target but maybe it seems too far off in the distance, too improbable, too unattainable, for an average person like you to reach.

    You Save a lot, but responsibilities keeping snatching your hard earn money, uncertainty disrupting your budgets.

    You have seen the success stories on TV, but those people inherited their money, had high-paying jobs, or hit it big with the lottery. Maybe you find yourself thinking: If only I was that lucky.

    Well, Mitrobe (Becoming a Millionaire) has good news for you.

    You can become a millionaire—and it has nothing to do with your family’s money or your education or your present situation, your career, your budgets, your savings, your investment but it has everything to do with you.

    Yea you are the reason why you are not yet a millionaire.

    If you follow these six valuable pieces of advice, I can guarantee that eventually you will become a millionaire. Here is to making this happen this year!

    Before we go into the guides, care to pin this image, to your Pininterest Page thanks.

    Becoming a Millionaire | A step by step guide 10

    Becoming a Millionaire | A step by step guide

    Advice1. Steer Clear of Debt

    A lot of people may believe that becoming a millionaire, you have to owe a lot of people or firm, but obviously, for you to become a millionaire you got to stay debt free.

    From cars to clothes to houses to jewelry, you can get a loan for pretty much anything nowadays. There is this idea floating around our culture that you should get what you want when you want it.

    Get it now, pay for it later. And pay more later.

    Just like Chris Hogan of everyday millionaire quotes:

    Debt is quicksand to your financial dreams. Every time you buy something on credit, you are digging a deeper hole for yourself.

    That money you are sending to lenders is money you could be putting toward your future!


    Advice2. Increase Your Income to Reach Your Goal Faster

    Everybody knows how to be wealthy, it simple, increase your income and reduce your expenses People think before you can become a millionaire you need to be earning six figures, some think it through savings.

    Let’s get something straight here: Am not actually saying saving is a bad idea, but to become a millionaire you get to have money work for you.

    Let reason together here, when you save a $100 for as long as you want to save it, it still going to remain a $100.

    Am I right, but if you invest a $100 it could be a month, Year or any investment you sure of an increase.

    And for earnings, You don’t need a six-figure salary to become a millionaire. However, if you are crunching the numbers and realize you still can’t put away the recommended 15%, you do need to increase your income so you can invest.


    How do you do that?

    You can get a job that pays more. You can take on a second job temporarily.

    Alternatively, you can get training to increase your high-income skills, demand and earning potential.

    For example, let us look at the field of Banking. You can become Account Service Representative level of Education is just High School and your average salary is $35,925, Accountant (Bachelors) average income $53,434 each of these jobs requires a different level of training and testing, and their salaries all vary.

    Do you see where I am going with this? When you increase your skills and expertise, you can increase your salary.
    That may mean getting additional education, but the payoff is worth the effort. If you are worried about paying for it, apply for scholarships and grants.
    The money is out there. Just do not ever take out student loans!
    However, if you are an Entrepreneur, you’re not a salary earner, you can also increase your skills, high income skills preferably,

    For example, you are running a business center service, you can also include, trainings, seminars and other services and it will generate you more bucks.

    Read this | How I went debt free and increase my income base with my High income skills.

    Advice3. Build Something

    When you trade your time for money, your earning potential is limited by the number of hours in a day. That is why the most common path to becoming a millionaire status is starting a business.

    Here is a guide on how you can start a successful business online.

    47% of the world’s wealthiest people are entrepreneurs. As a business owner, you have the ability to hire employees and leverage their time to help you build your company and wealth.

    Being part of a new business venture can have similar rewards–even if you are not the founder. Early employees often earn equity packages to offset lower salaries or to give them some skin in the game.

    However, while building a company or a brand can be a lucrative career path, it is also a risky one.

    Because it requires you giving up everything to make it happen, Quick analysis 8 out of 10 entrepreneurs who start businesses fail within the first 18 months. Many of these founders put a significant portion of their savings into the venture.

    Moreover, early employees often find that their equity is worthless.

    Advice4 Master Your Craft

    They is a popular quote that says a “Master of all is a Master of none”. When you are the best at something, you can command a hefty premium.

    So while you are still trading time for money, those earnings are large enough that they can make you a become a millionaire pretty quickly.

    CEOs of large companies make $15.6 million per year on average. That is 271 times the pay of the average American worker at nearly $58,000.

    While entrepreneurship is binary — either the company is successful and you make money or it shuts down and you lose money, mastering your craft tends to pay you along the way.

    For example, professionals who want to become a CEO often earn a MBA. MBA graduates typically more than double their salaries within 3 years of graduating with the current average salary at $142,000.
    Whether or not they become CEO, they are still growing their earnings at a much faster rate than most.

    If you like, what you do and are willing to dedicate time and money to mastering your skills, these efforts can pay off in the end.


    Advice5 Invest

    This is the area where you get money to work for you. It is by far the most accessible path to becoming a millionaire.

    No risky startup company. No working insanely hard to be in the top 1% of a field. This is all about making the money you already earn work for you. And the best part is that anyone can do it no matter your status.

    If you went to college, then you spent nearly two decades in school so that you could get a job and make money, but how much time have you spent learning what to do with the money you make?

    How much you earn is important, but how much of those earnings you keep and how hard your savings works for you is even more important. Here is a guide on how you can save money even on a low income

    Taking the time to develop a savings strategy and learn about investing are key steps in growing your wealth–and the earlier you start the better. Saving just $2 per day at age, 20 can get you to millionaire status by the time you retire if you invest well.

    Anyone can become wealthy by spending less than they make, saving diligently, and investing appropriately. How much you need to save depends on how much time you have and the rate of return you will earn.

    The biggest mistake people make that keeps them from reaching millionaire status is they up-size their lifestyle when their income rises. When your income goes up, the first thing you should increase is the amount you contribute to savings and investing and not the time you increase your standard of living.

    A lot of people were asking me Mitrobe how do I invest? Where will invest my money?
    Now this is it, before investing your money there are 2 fundamental things you have to look to before pushing forward to invest. They are

    1. Must be Risk Low
    2. Must be Long term

    However, you should have an emergency fund available so that you do not have to dip into saving what’s more, have a focused plan for how much you will save every paycheck.

    If you can put those savings in an account you never touch, you will be well on your way to building that nest egg.

    However, the income is quite low, the risk also is quite low and it a long term contract. That what every true Entrepreneur and investors will consider before investing.

    Advice6 Develop a written financial plan.

    This happens to be one of the main reasons why someone can never become a millionaire is that they have not written a financial plan.

    Developing a financial plan forces you to take action, instead of just talk. It also guides you in making the right decisions in order to achieve all of your dreams and goals.

    Financial planner Scott D. Hedgcock said that,

    “When planning for a more secure future there are two inputs that are indispensable: how much money you have and how much money you spend.

    “The basic point I want to stress about these two inputs is that they are absolutely fundamental to all financial planning regardless of how large either of them is,” Hedgcock said.

    “In my experience, the biggest difference between those on the right path vs. those on the wrong path was the amount of time and effort they put into devising a plan for their finances.”

    But taking the time to create a plan and see it through “is the one thing all financially successful people have in common.”

    Hedgcock added that,

    “The success experienced by those who do this occurs regardless of their relative wealth. Likewise, the failure of those who do not follow a plan is unrelated to their wealth.”

    With gratitude and assurance we I know you will Act Now to way of becoming a millionaire.

    You can join our Facebook family group BECOMING A MILLIONAIRE, a place you come to meet businesspersons, investors and Entrepreneur’s around the Global world, to share a common interests of living a financial free life.

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