Building Wealth Strategies

**Young Spark** · 07-09-2007 03:05 AM

The most sought after topic is now in its own post. I mean seriously, we all want wealth, luxuries, the good life... but we all need guidance. If you have techniques or strategies to building wealth and success, share your strategy in here.

This could be a recommended book, building wealth advice, no matter what... just give your input/insight on building wealth.

**Diamondman** · 07-09-2007 04:01 AM

Spend less than you make.

**Finandom** · 07-09-2007 08:16 AM

My strategy would be:

1. Start a business to make money so it can cover my expenses and provide little modal to invest
2. Invest my money in stocks or Forex for capital gain
3. Invest in Real estate and other business for passive income
4. more to come......

Currently I'm at the first stage - make money from a business.

Good Luck!
Harrison

**Informurself** · 07-09-2007 10:17 AM

In order to create wealth one must follow a few steps
1. think wealthy reading "The Millionaire Next Door" will help changing your thinking on wealth

2. Do what you are passionate about and get paid for it

3. Smart investing . Do You know what porkbellies are? Exactly do not invest in something you know nothing about. Invest things you know about.

4. Put things on autopilot if you do this one wealth will find you

5. Understand wealth is more then money its health , family etc

**silenthcourtney** · 07-09-2007 11:09 AM

Understand the difference between wealth and money. Wealth is about sustainability. One of the best tools I've found that will help you really understand the difference between the two is the board game, Cashflow.

**Cognition** · 07-09-2007 12:09 PM

Get financially educated. It makes no sense for anyone to start a business or start investing before they actually know how money works. You'd be surprised at the number of people who really don't have a clue... Start understanding the difference between assets and liabilities, tax strategies that the rich take advantage of, the danger of possessing a "consumer mentality", and so on...

A good financial education would open your mind to the true way money works, and you'll begin to dismiss the "consumer" mentality of most folks (make money, spend money).

The good thing is getting financially educated doesn't require you to go back to school, and can be had very inexpensively. Start reading the works of authors like Robert Kiyosaki (Poor Dad, Rich Dad & The Cashflow Quadrant), and let that be a basis of how you want to establish wealth.

Financial education - I can't stress it enough!

**Aletheides** · 07-09-2007 08:37 PM

1. Dont trade your time for money.
2. Leverage the time of other people since time is worth more than money.
3. Develop profitable business systems (passive as possible) which can be used over and over again.

I will ponder this more and post later...

**fromantv** · 07-09-2007 09:55 PM

save as much as you can, invest it or put it in a savings acct at 5% and put money in it monthly...ive been doing it for a year and already am seeing a big difference....i calculated if i keep saving 800 a month for the next 40 years i will have like 3 million...and probably saved less than a million...if you wanna wait 40 years

**Young Spark** · 07-09-2007 10:27 PM

Originally Posted by silenthcourtney

Understand the difference between wealth and money. Wealth is about sustainability. One of the best tools I've found that will help you really understand the difference between the two is the board game, Cashflow.

I see somebody has read the "Rich Dad, Poor Dad" book too. I'll be honest, that damn book is hard to understand at the beginning, might not be to most but I had a lhard time catching the concept to the story.

On reply to CDAllenGroup: I agree, financial education is the first step but what exactly does one mean to "understand how money works?" That is not really explaining anything, more like a "liquidated category" if that makes sense. Surely one should understand assets and liabilities, but still, I can't really grasp the true meaning behind "understanding how money works."

One I haven't seen yet is investing your money and compounding it. An example I read on a website called "The Wealth Wizard" said a great example: if you you can turn .01 cent into a million dollars in 1 month. .01 * 2 = .02 * 2 = .04 * 2 = .08 ..... keep following the pattern and around the 20th day you'll see your making almost thousands of dollars. Surely there is no such thing, but it brings to mind the power of compounding.

Suppose you invest $10,000USD in a 6% APY account, that should yield you about $600 ... now do it a second year and you should yield $636... you can gain more then the previous year because your compounding. Might not sound like much, but every little penny counts... right?

**Paint and Air Sportz** · 07-09-2007 10:53 PM

Originally Posted by Young Spark

I see somebody has read the "Rich Dad, Poor Dad" book too. I'll be honest, that damn book is hard to understand at the beginning, might not be to most but I had a lhard time catching the concept to the story.

You should read it a couple times, it really is a great book iev read it 3-4 times to really understand all parts of it.

**Young Spark** · 07-09-2007 11:06 PM

^^ I plan to, but I got the book from the library... it started out great so I need to go out and purchase it or buy it off eBooks.com --- what can I expect to learn from it.

Also, as anyone read "Think and Grow Rich"? --- I have it as an eBook but I want to know what I can plan to learn.

**Cognition** · 07-10-2007 12:17 AM

Originally Posted by Young Spark

On reply to CDAllenGroup: I agree, financial education is the first step but what exactly does one mean to "understand how money works?" That is not really explaining anything, more like a "liquidated category" if that makes sense. Surely one should understand assets and liabilities, but still, I can't really grasp the true meaning behind "understanding how money works."

What I mean by "understand how money works" is simply knowing the different ways money can be made. For example, you have earned income, passive income, and then portfolio income. All three of these types of income of different and distinct. I for one, have decided to abandon the Industrial Age idea of earned income (that is going to a 9-5er) and trading time for money, and focus on creating residual or passive income. Therefore I have more time to invest in learning and researching other "deals" I can invest in.

Also, it's important to take advantage of tax loopholes of the rich, which are done primarily through the formation of corporations. Sheltering money/reducing tax liability is all part of becoming wealthy.

Secondly, knowing about what assets and liabilites are is very important. What's even more shocking are the myths, lies, and misconceptions people have about assets and liabilities. An asset is simply something that puts money in your pocket on a consistant basis, while a liability is something that takes money out of your pocket.

Most people say their home is their greatest asset. WRONG! Most people's homes are their greatest liabilities! Unless you're using a piece of property for rental purposes, the mortgage, maintenance, and utilites that accompany a home purchase makes it a liability - money that is taken out of your pocket.

So, after spending the last year getting financially educated with self-help books, courses, and the like, I have made a total change in my mind about money. I'm not a financial genuis yet, but I will say I have come MILES in my thinking about money and have shifted my thinking on creating income producing assets. I now think, talk, and breathe about money - my language has changed. My mind has changed.

If you guys really want an introduction into financial literacy, why don't you download these podcasts from Robert Kiyosaki's website for yourself [they're FREE]:

http://cashflow.vo.llnwd.net/o16/pod...ing_richer.mp3
http://cashflow.vo.llnwd.net/o16/pod...h_bonus_p1.mp3
http://cashflow.vo.llnwd.net/o16/pod...h_bonus_p2.mp3

**Young Spark** · 07-10-2007 01:18 AM

^^ Great resourceful information there... thanks again for the insight and I applaude you on the information you've provided.

So now I understand Passive Income and Earned Income... but what exactly is the definition of "Portfolio Income?" I read it on Wikipedia but not information was given enough to support me in the understanding process.

Also, at the same time... what are some good methods of creating passive income. Passive income in my understanding is to create and generate money with little or no work at all... in today's economic society, it seems like passive income is quite impossible. How do you respond to this allegation that I'm in belief of?

One more thing... I wanted to respond to something you said:

Originally Posted by TheCDAllenGroup

Most people say their home is their greatest asset. WRONG! Most people's homes are their greatest liabilities! Unless you're using a piece of property for rental purposes, the mortgage, maintenance, and utilites that accompany a home purchase makes it a liability - money that is taken out of your pocket.

I agree with everything, but adding to the list is the fact that if its a rental property (assuming the collected rent is based on a owner-financed home sale) --- it can also still be a liability. If you owner-financed the home, your still facing a liability. How? Well, think of it like this, the homeowner occupying the home assumes all utilities, and any other money that needs to be put out on the home. This includes property taxes... what I've learned is that when it comes to property taxes, if a homeowner doesn't pay the property taxes, a tax lien will be created. Surely, you know the process of a third party paying the tax lien and that third party person gets their money back OR ELSE THEY OWN THE PROPERTY.

Point in short is this: If you are the seller of the owner-financed home, the buyer (or payor as we call it in the cash flow industry) doesn't pay the property taxes, a tax lien is put against the home unless you (the seller) pay the taxes... you can add this on to what the payor owes you... but if you don't pay it and the tax lien goes through all the way to the end of the reclaimation period set by the state for the third party (the person who paid the taxes) to collect their taxes... then they get the home and YOU the seller are out of owning the home, in this case, losing what is a so-called asset.

Sorry if I didn't make quite good sense... please tell me if I didn't.

**zoobie** · 07-10-2007 03:49 AM

Before thinking of the money I can make out of my business, I first consider on how customers will benefit from it. Will they be happy? Will they be proud to be part of it?

I do things because I just love doing them. And out of my passion in helping people improve their lives, this helped me become wealthy, too.

**Cognition** · 07-10-2007 05:49 AM

Originally Posted by Young Spark

^^ Great resourceful information there... thanks again for the insight and I applaude you on the information you've provided.

So now I understand Passive Income and Earned Income... but what exactly is the definition of "Portfolio Income?" I read it on Wikipedia but not information was given enough to support me in the understanding process.

Portfolio income (or known as paper assets) is income derived from stocks, bonds, mutual funds, etc.

I personally don't like the idea of investing in the stock market because I have no control of the business(es) that I invest in. Sort of like gambling...

Also, at the same time... what are some good methods of creating passive income. Passive income in my understanding is to create and generate money with little or no work at all... in today's economic society, it seems like passive income is quite impossible. How do you respond to this allegation that I'm in belief of?

Yeah, passive income is made from little to no continual effort, although your initial time invested can be substantial. For example, I am starting a blog - the initial time I invest into to it will be in the form of setting it up, applying to the ad networks, configuring the plug ins, and then creating my content. So when everything is ready, I just post the content daily (spending 20-30 minutes a day). The money I make is passive income (which are ads, derived from the traffic I receive).

Passive income can also come from real estate. For example, if you have a rental property that is generate positive cash flow from renters, then that is passive income. The house (that you are renting) has become an income producing asset.

So passive income is not necessarily hard to create, but a person must do their "homework" about whatever it is they are creating.

I agree with everything, but adding to the list is the fact that if its a rental property (assuming the collected rent is based on a owner-financed home sale) --- it can also still be a liability. If you owner-financed the home, your still facing a liability. How? Well, think of it like this, the homeowner occupying the home assumes all utilities, and any other money that needs to be put out on the home. This includes property taxes... what I've learned is that when it comes to property taxes, if a homeowner doesn't pay the property taxes, a tax lien will be created. Surely, you know the process of a third party paying the tax lien and that third party person gets their money back OR ELSE THEY OWN THE PROPERTY.

Point in short is this: If you are the seller of the owner-financed home, the buyer (or payor as we call it in the cash flow industry) doesn't pay the property taxes, a tax lien is put against the home unless you (the seller) pay the taxes... you can add this on to what the payor owes you... but if you don't pay it and the tax lien goes through all the way to the end of the reclaimation period set by the state for the third party (the person who paid the taxes) to collect their taxes... then they get the home and YOU the seller are out of owning the home, in this case, losing what is a so-called asset.

Thanks for the tip. I'm really a novice when it comes to real estate, so I appreciate that.

This is a fun thread - I'm really enjoying it.