|Wealth Building Information|
Building Wealth: Its An Inside Job ? Part 2
Let's quickly review the principles discussed in the first part of building wealth. We established that prosperity consciousness must first be developed mentally to acquire any real wealth. A person that constantly worries about money most likely is living in scarcity consciousness regardless of the size of his or her bank account. We talked about some methods and daily exercises that can be employed to start developing a stronger level of prosperity consciousness. The first exercise uses written affirmations, the second utilizes visualization, and finally we need to become more aware of how willing we are to give and receive prosperity on a daily basis. If we start using these methods, we'll begin to see gradual changes in our lives that will become larger over time.
As a follow-up to improving the way we think about wealth and prosperity, there are some effective money management techniques that will further support our prosperity consciousness. Certainly if we use the exercises discussed earlier in Part 1, we'll start to view money differently, but those principles should be fortified by our actions as well. What we want to accomplish with our money is to generate a steady cash flow into our lives that will elevate our feelings of prosperity over time. The first step toward achieving this end is to simply pay ourselves first. Every time we get paid, we should save a portion of what we've earned. It's recommended that at least 10% of our pay be set aside for savings.
So if you already have a savings account, the big question is what is the purpose of this account? Is it for emergencies or a major purchase? Do you have more than one savings account? If we want to establish a consistent flow of prosperity, we must gradually build prosperity in our bank accounts while at the same time protecting ourselves against life's financial emergencies and obligations. It's very demoralizing to save a significant amount of money only to have to spend it on a costly emergency ? the worst part is that often times, an event like this will knock us right off the prosperity track entirely. So we should strive to not only protect ourselves financially from these types of events, but more importantly, we must protect ourselves emotionally from these types of events.
The most effective way to handle our savings is to have more than one savings account with each having a different purpose. Although each of us will have different financial goals, it is recommended that everyone have a minimum of three different savings accounts with the following purposes:
1) Emergency Funds ? This fund is set aside for those incidents that pop-up unexpectedly. Managing these events is critical to building wealth because they throw us off our budgets and demoralize us mentally. Unfortunately, emergencies are when many of us resort to credit cards, which makes this account even more critical. We MUST manage this aspect of our financial lives, otherwise life's little emergencies will continue to rob our wealth if we let them.
2) Purchases ? This fund is used to save for major purchases such as a piece of furniture or a new car. In addition, we can also use these funds for buying Christmas or birthday gifts. These types of purchases are also occasions where many of us are inclined to use credit. It's not uncommon for Americans to be loaded with debt right after the Christmas holiday season. Just like the Emergency Fund account, the Purchases account is designed to keep us away from using credit.
3) Wealth Building ? This last account is probably the most important if we manage it properly. There is only one rule for this account ? the funds must never be spent. Never spent?!? Then what good is this account if it's never spent, you ask? Two reasons. The first reason is that we want this account to reach a level where we can eventually spend or even live off the interest it earns. Secondly, this account will be our biggest builder of prosperity consciousness. As this account grows in value, we'll become more and more comfortable with wealth coming into our lives. Have you ever noticed how money just seems to flow naturally to wealthy people? There's a reason for that ? it's not coincidental, it's their attitude that attracts the wealth. So as this account grows and grows, so does our comfort with money and our willingness to receive abundance.
These accounts need not be savings accounts with your bank. In fact, most of them shouldn't be savings accounts. Obviously we want our funds earning as much interest as possible and we all know that savings accounts have probably the poorest yields of all. One approach is to place our more liquid accounts such as Emergency Funds into savings accounts, perhaps keep our Purchases account in short term CD's since we can plan more easily for purchases, and then place our Wealth Building funds in a Mutual Fund. Again, the arrangement will be different for each of us ? the important thing is to start setting them up.
The accounts mentioned here should be in addition to those that may be offered by your employer. Employer sponsored plans such as 401K's are a great way to supplement wealth building, but we still need to manage our wealth on a daily basis to establish a prosperous mindset. Keep in mind that the accounts mentioned here are a minimum. There are countless ways to use this approach. For instance, we may choose to have a Purchases account and then another account for Gifts. Or we may want to add another account called Vacations. Many money management pundits advise setting back 3-6 months worth of living expenses in the event of emergency unemployment. Perhaps when our emergency account gets big enough, we can place these "Emergency Unemployment" funds into a separate interest bearing account. Again, there are countless variations to using this approach.
Finally, one last note about maintaining the accounts. We mentioned earlier that setting aside 10% of your pay is a good minimum and a great level on which to start. Some of us may be able to save more, others may have to save less ? the main thing is that we get started. In addition, a portion of any unexpected windfall should also go into savings. As far as how much of that savings should go into each account is up to each person. The simple approach is to split it equally among all the accounts, but as situations arise, it may be practical to feed one account more than the others at times. This is fine as long as the rules for each account are strictly followed.
Remember ? like it or not ? our current finances are simply a reflection of our current level of prosperity consciousness. So if more wealth is desired, we must alter the way we're presently thinking about prosperity. If these Wealth Building principles and techniques are followed and we're persistent to this cause, it's guaranteed that real wealth will find its way to our lives over time.
Chuck Cox is a Technical Writer and Industrial Scientist by professional with a background in statistics. He has used mathematical and statistical methods to invest and trade in the stock, futures, and options markets. Chuck has owned various businesses and presently operates several websites. To investigate a new business idea, visit his website, http://www.earncashathometoday.com/
The PDQ? Factor
It's the beginning of a brand new year: a time to set goals, make plans, and start afresh; a time to dream of making more money, having a more beautiful body, and experiencing more love. I can't help you with your body or your love life but I can show you some tools for making more money this year.
Business After The Iraqi War
The rewarding of high compensation packages to top executives who turned over weak quarterly earnings, or who were involved in corporate scandals, adversely affected short-term investing, and collectively contributed to the downturn of the global economy over the last couple of years. Even the help and expertise of Federal Reserve Chairman Alan Greenspan and several notable Nobel Prize winning economists in the President's Council of Economic Advisers, wasn't enough to revive the economy. September 11 then turned our attention towards terrorist threats against the markets.
How To Grow Your Mental Power and Let Your Brain Make You Rich
No one has complete control over their thoughts. But with practice, with deliberate attention, far more control can be achieved. Here are five rules that show you how.
Do You Want To Save Money Easily?
Living on credit is fashionable. Indulging oneself is fashionable. Saving money isn't.
WARNING: The Biggest Lie About Social Security
Like I said, If you are poor and on social security do not, and I repeat do not read this article.
Investors - What Separates the Good Traders from the Bad Traders?
There are many forms of investing online. While I can give you a list that is a mile long, these are the most common forms of successful investments. Some of the following know how to invest terms are:
Why You Need To Buy and Sell Gold Coins (Part 4)
Top Investment Performance
Trustees: Who Can You Trust?
Early in my legal career I represented two young women in their early 20s.
Is Accumulating a $1,000,000 Net Worth Easy? Yes and NO
Is accumulating wealth as easy as following a 3-step plan? Yes it is and no it isn't. As with many things in life, accomplishing a goal such as accumulating one million dollars (or even $100,000) depends on your desire, your personal choices and your daily actions.
How to Make More Money
When I was a student in London, I had a part-time job working in a new-age bookshop near Camden Town. One day, Robert Plant, the lead singer for Led Zeppelin, came into the shop and walked up to the owner.
What is Your Creative Retirement Plan?
The idle are a peculiar kind of dead that cannot be buried." Oriental proverb
Create Tax Savings And Transfer Wealth To Your Child With A Roth IRA
Parents must give serious thought to protecting their family through estate tax planning. While life insurance and trusts should be a part of every plan, Roth IRAs can be a simple tool for passing money to your child on a tax-free basis.
Rich or Poor - Get the Knowledge
Most people work hard all their lives only to "retire" poor then try to live off meagre savings or a small (rapidly disappearing) Government pension. They are forced to live out their twilight years struggling with constant money problems. Many of them have to buy only the cheapest food and are unable to enjoy the little pleasures of life like going to an occasional movie, eating out or taking short trips. They have to watch every cent they spend.
The Secret Barrier To Wealth - Underearning
Is the ghost of "Money Past" haunting you? Do you feel like no matter what you do to "get ahead" it never works? The problem may not be what you are doing, it may be what you are thinking. Many of us have deep spiritual and psychological patterns around money that can block our efforts at managing our money better and creating prosperity.
The Underlying Belief System
Many of us do not consider the underlying belief system about money to be of any importance. You think it does not matter, because what matters is what you do now. Right, at one level, but not complete. All ideas that we have learned about money in the past are colouring our actions today.
How to Have MORE Fun With YOUR Tax Refund in 2005
I counsel a LOT of people about money. I see the same mistakes being made over and over again.
The Difference Between Wants & Needs
So you want to become wealthy? While there is no single road to getting there, it's a sure bet that one principle is in place for those who keep their wealth over a lifetime. Live beneath your means. Spend less than you make. Don't spend more than you can afford. It doesn't come any simpler than this. If you want to create wealth, you have to learn to do this. It doesn't matter if you make $10,000 a year or $1 million, if you don't learn how to master the step of spending less than you earn, you'll never create lasting wealth.
Who Else Wants To Know Oprahs Secrets To Wealth & Success?
Before I had a lot of money, I was really quite happy," said Oprah Winfrey. "And I will tell you this--you may not believe it--I never would have gotten the money if I wasn't happy to begin with. I never would have gotten it."
The Predicament of the Newly Rich
They are the object of thinly disguised envy. They are the raw materials of vulgar jokes and the targets of popular aggression. They are the Newly Rich. Perhaps they should be dealt with more appropriately within the academic discipline of psychology, but then economics in a branch of psychology. To many, they represent a psychopathology or a sociopathology.
Starting With Smaller Goals First And Work Your Way Up Until You Achieve Financial Freedom
While you need to have a lot of positive-thought and confidence in order to be self-motivated, there are a few things that you can do which will help you to achieve all three things. These steps are generally pretty easy to do - and since they're simple steps, they may seem a little less daunting at first than having to figure out how to be positive-thinking and confident right out of the blue.
|home | site map|