Become A Multi-millionnaire The Simple Tested Way

Become A Multimillionaire The Simple, Tested Way

The Ground Rules For Steady Wealth Creation Page: 1 2

Create Income Generation Activity
The truth is that you cannot create wealth without generating income. So, if you expected a magic wand, it doesn't exist, but you can check with a magician. Note, however, that income generation does not necessarily build future wealth for you: many have seen a lot of earnings pass though their hands and ended up with an empty purse. Need examples? No, I know you know somebody who has earned or received a lot of money but ended up wretched or barely surviving. Earning income is only a major first step. Small income, managed with sterling wealth management skills will leave you better off than large income handled without financial wisdom. Various options exist for earning income: employment, consulting, contracts, franchise business, network marketing, home business, other small business, and many more. Choose what you are best suited for and work like a man on a mission. To achieve better results, seek to diversify your sources of income - aim for multiple streams of income. And to grow your earnings capacity, you must invest in acquisition of knowledge and expertise in your chosen field(s).

Deploy An Effective Funds Management System
To propel your financial progress, you need a personal 'system' for financial management. Simply put, you need some rules to guide your financial actions.

Design a Saving Strategy

Do not deceive yourself that it's easy to save. It's never easy and requires a lot of disciple and mental strength. So decide how far you can push yourself. If you don't have a deliberate attitude to this, who may find yourself wondering how your money disappears.

Set a regular savings commitment. It's been called 'paying yourself first' by financial advisers. What proportions of your income should you compulsorily save? The figure 10%, suggested in George S. Cason's The Richest Man In Babylon, has been bandied by many personal finance practitioners. It really depends on how early you are taking off and what your goals are. Whatever the case, aim for much more than 10% if you can 'squeeze' yourself that far and if you are really a bit ambitious. Accelerated savings will mean that you meet your goals more quickly and have an earlier chance of a happier, better lifestyle.

To achieve your savings target, you need a spending mind-set that aims to chop off as much spending as possible. Be prepared to take yourself to task over your spending. Can every expenditure pass your acid-test. Do you genuinely need the stuff? Can't it be deferred (and perhaps forgotten)? What is the expected consequence of not going ahead with this expenditure? Which is more important: the pleasure of the immediate expenditure or the wealth accretion it would bring if saved and invested? Can a different, cheaper version adequately serve the need? Yes, you must ask yourself some critical questions before you part with hard-earned money. And don't be bothered that somebody will label your a teacher!

Resolve to save windfalls and bonuses: profit-sharing, raffle winnings, year-end and other bonuses, up-front allowance payments, super-profit from a business venture, etc. Such bullet payments can substantially lift your wealth building effort. How can you overcome the strong spending urge that comes with such lump-sum inflows? Well, if you want to be a multimillionaire, you've got to think and act like one. Multimillionaires don't blow windfalls, they invest wisely.

Stretch yourself to avoid raising your spending when increased income inflow becomes available to you. This will mainly result from salary enhancements, a new better-paying job, a new business venture or some other breakthrough. The natural pull is to spend more when you earn more, but the multimillionaire mind-set is different. Such increases are largely creamed off to the savings box and invested, while maintaining spending at the previous level or as close as possible to it. That way, you accelerate your drive to financial freedom. Related to this is the income gap that results from completion of fixed installmental payments. When faced with fixed payments (example: loan repayments), you adjust your spending to accommodate the compulsory installmental payments. Once repayment is completed, be wise and sustain the discipline of your current expenditure profile and save the equivalent of the repayment you were making.

Generally inculcate an expenditure control habit: skip certain events that could cost you a sizeable sum without yielding discernable value; keep a safe distance from consumer credits and other facilities now freely offered by banks (the interest rates and charges will break your back), compare prices before you buy; avoid every kind of waste and continue to identify creative ways to cut expenditure.

Learn To Prepare And Operate A Budget

You may not be an accountant and may be unable to do a sophisticated budget. But you need to work out how to apply your expected earnings, over a month, quarter, year or other timeframe you choose to work with. Take some time to prepare a statement to guide your spending of your income, to determine, before hand, where you intend to plough in every kobo. If you don't, your income could go on 'first-come-first-served' basis, which may not serve your ultimate financial interests. So, take some trouble and work it out. Try to write it down, and more importantly, be courageous to stick to it. 100%? That may not be possible, but the higher your compliance rate, the nearer you will be inching to your multimillionaire status.

Try Documenting Your Expenditure

This may not be easy for you, but will help when you want to review your spending profile. If you use your cheque stub properly, it may capture a lot of the information you may need. It's always instructive to review expenditure you have incurred in the past to see if the size and allocations really still make sense, now that the emotions have gone. This may guide you in future decisions.

Develop Multiple Income Generation Platforms
Expanding you income generation capacity is a major factor in boosting your savings and investment potential. If you haven't heard of multiple streams of income, then know now that your wealth creation effort will benefit immensely if you develop multiple channels for generating income. How? Let's take a quick look. If you are in employment, haven't you heard of personal franchises (network marketing) which can easily fit into your employment and yet build for you, over time, a powerful fountain for passive income . What about investing a reasonable part of your earnings in stocks and other assets that could earn reasonable returns? Who said you cannot easily publish and market ebooks? Or set up a web site even if for only affiliate marketing business. Of course a host of other small business options can easily fit into your employment without any serious conflict of interest.

Build a Healthy Investment Portfolio
The money you strive to save must be wisely invested to optimise the benefit of that effort. Building a rock-solid investment portfolio is the dream of every investor, but perfection remains elusive. Since this is a fairly specialised field, you will benefit from the expertise of practitioners like stock brokers, property experts, financial advisers, personal finance experts, etc. Whether or not you use an expert, you still need some level of financial and investment education. So read, train or do whatever you can to get financially literate, if you have a vision to be a multimillionaire. Strive to achieve a reasonably diversified investment portfolio with asset allocation that meets your short- and long-term objectives.

You Need A Firewall
While striving to save, invest and accumulate wealth, the last thing you pray for is a catastrophic experience that wipes the result of your tedious struggles and leaves you flat on your belly. You need to protect yourself and the progress your achieve - kind of watching your back. Insurance policies feature highly as a viable tool. Which policies do you need? Here again, you may need experts, principally insurers and insurance brokers. You may need protection in various areas: life (your dependants are beneficiaries), health (self and family, as a major problem can erode all your savings), home, disability, liability, motor, etc.

Provide For The Family's Key Needs
Building your millions will not count for much if your family is not catered for. The key needs must be met. The whole idea is to achieve this by design and not by chance. So identify the things that matter to the family and proactively plan how to meet them. Do you need a target saving account for a particular family event that shouldn't be skipped? What about providing a fund for proper education of your children? That are many options to apply, depending on your needs. The key is to have a programme that carefully addresses these major needs and still allows you to build a financial fortress. Much of the resources to achieve this must be switched from frivolities and by blocking drain pipes.

There may be a lot more you can do to improve your fortune, but the steps outlined here, if well-implemented, will set you on your part to a stable financial future. Yes, to a multimillionaire status. Try them!

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