This is the last in a series of articles on creating wealth, specifically aimed at helping those who have left their wealth building activities to later in life than they probably should have. It will help you understand what you need to do to turn your finances around.
The task of funding retirement is a huge one and the first thing to accept is that you will have to know what you are doing if you want to have a chance of succeeding. Just like in any other skilled area there are specialist knowledge and skills that need to be learned, practiced and applied in order to succeed.
The education that you will need to acquire can be broken down into four categories that should be acquired in the order that I will discuss them.
The First Category is Success Education
You can't expect to succeed financially until you have learned the principles and practices of general success. Financial success is simply a subset of these general principles and will easily follow on once you have mastered the three areas of success.
The first area of your success education is Success Thinking.
Every success starts with a thought and research has shown that people who are consistently successful have a different way of thinking about life than the people who aren't consistently successful. This being the case it makes sense to acquire the thinking habits that those successful people have.
The second part of success education is a knowledge and mastery of the Laws of Success.
Just like the physical universe functions under physical laws such as the law of gravity, the universe of human results functions under its own set of laws. If you learn what these laws are and how to apply them then you can work with the laws and success becomes an automatic result. However if you are ignorant of, or you ignore, these laws then you will never achieve lasting success.
The third part of success education is a knowledge and application of Success Habits.
Your habits are the means by which your subconscious mind keeps you on target for what it considers to be your normal start of existence. This so called normal state is not necessarily the state to which you aspire. In fact if you are not well on the way to being rich then you will need to change what your subconscious considers to be normal for you.
There are certain success habits that all successful people have and if you learn and practice these habits you can use them to reprogram your subconscious mind for success.
Wealth Creation Education
Once you have mastered the basics of success then you can turn your attention to the specifics of wealth education.
The first part of wealth education is to learn how money really works.
Once you know and understand how money really works then you will begin accumulating wealth. If you are not currently accumulating wealth then this is probably an indication that you, like most of the population, have considerable misunderstanding of how money works and how to harness its power for your own benefit.
The second part of wealth education is to learn how income works.
Once you understand how income really works then you will be able to leverage your own income so that you greatly increase the capital that you have to invest.
That brings us to the third phase of your wealth education; how investment works.
There are many different kinds of investment each with their strengths and weaknesses and each with their own degree of required involvement and required knowledge and skills.
As well as a huge range of investment vehicles there is also a huge range of investment strategies. The good news is that there is a vehicle and strategy that is most suited to taking you from where you are today to where you want to be. However in order to find it you need to gain some general education on how investments really work.
I have outlined for you the six different areas of education that you need to acquire and apply in order to become wealthy. It is not going to happens overnight and it will require some dedication on your part. But if you are willing to apply that dedication then you can achieve wealth, regardless of where you are starting from.
Wealth is not a matter of luck, it is the result of becoming the person your need to be, learning the knowledge and skills you need to have and then applying them with consistency and dedication.
It is now up to you to start the ball rolling. I firmly believe that the best place to start is by reading my book on success and diligently completing each of the exercises contained in that book. A link to the web site for this book is printed below this article.
By: James Delrojo
Friday, March 23, 2007
Tuesday, March 20, 2007
The True Determinants Of Building Wealth
Elite Formal Education is Overrated
There is a huge myth that going to a great school and getting a great job will help you build wealth. In reality, it’s more likely to bury you in so much debt that you’ll be close to retirement by the time you’re debt free. When I graduated from college (we won’t say exactly how long ago that was!), I had friends that had already accumulated about U.S. $80,000 in debt. And for some of those friends that went to med school or law school at my alma mater, they tacked on another $100,000 of debt, for a total burden of close to $200,000.
In today’s dollars, that debt would perhaps be more than $325,000. So in the first year after completing their formal education, some of my friends already had a minimum $2,000 to $5,000 monthly payment that came off the top of every paycheck. Anyway you slice it, this is an enormous abyss with which to start your journey of life.
I know that many people will have a difficult time believing my next statement, but an examination of history will support my next assertion. The great expense tied to elite institutions serves two purposes. (1) To provide a network/structure by which the moneyed elites can retain power; and (2) To burden the non-wealthy with enormous debt. In the seminal book Education and the Rise of the Corporate State, Joel Spring wrote that “the development of a factory-like system in the nineteenth-century classroom was not accidental”. Russell Conwell, a member of the wealthy elite and founder of one of America’s oldest educational institutions, Temple University, voiced sentiments he believed should be integrated into education:
“The men who get rich may be the most honest men you find in the community…Ninety-eight out of one hundred of the rich men in America are honest. That is why they are rich. That is why they are trusted with our money…It is because they are honest men….the number of poor who are to be sympathized with is very small. To sympathize with a man whom God has punished for his sins….is to do wrong.”
Elite Jobs that Build Wealth are Rare
In essence, elite education builds a caste system financed by debt. There are two predominant scenarios which students of elite educations face upon graduation. There are those that emerge from these schools debt-free and really didn’t need the advantage of an elite education anyway, and those whom are burdened with debt and will become cogs in the machine for the interests of the debt-free. For those that believe that they can dig their way out of this huge mountain of debt by working their way up the corporate ladder in the land of opportunity, think again. In 1965, CEO’s in America earned about 24 times as much as their employees. In 2006, CEO’s in America earned 262 times as much as their employees (Source: BBC News, June 22, 2006).
Furthermore, in 2005 and 2006, CEO’s from the 11 largest U.S. firms collected U.S. $865,000,000 in salary at the same time their leadership caused shareholders to lose U.S. $64,000,000,000 in company stock. Whether or not their leadership destroyed billions of dollars of wealth in the stock market was irrelevant. They were still rewarded. Such is how the modern-day caste system works.
Unless you will be studying engineering, law, architecture, or medicine, most formal education is not only irrelevant to building wealth, but you are certain to build it much more quickly if you become an entrepreneur and/or learn to invest properly. My opinion on formal education will only change when the majority of schools begin teaching what is truly necessary to succeed financially later in life. And that includes classes on:
(1) Investing in stock and non-stock assets
(2) Leveraging money
(3) Leveraging time; and
(4) Building successful networks (it’s not what you know,
it’s who you know)
As it stands now, one can go to Harvard or Oxford, earn a doctorate, and still be ill- prepared to build wealth. Undoubtedly, the network that one builds at these types of institutions is exponentially more valuable than the education one receives.
Saving Money = Losing Money
Perhaps an even worse piece of advice is to save and put money away. Putting money away into a savings account and letting it sit there at the 1% or so interest rate that banks give these days just turns your money into dust. Consider that $1,000 in 1980 can only buy less than $500 worth of stuff in 2006 dollars, and it’s easy to see that “saving” your money only loses you money. There are almost always good risk-reward investment opportunities somewhere in the world, not just stock markets. If real estate opportunities in Korea are poor, then Argentina or Iceland may be booming. It’s just a matter of widening perspectives to find them. Having idle cash sitting around and not working for you is never a good strategy when one desires to build wealth.
Want to find the land of opportunity? Go look in a mirror and you will have found it.
By: J.S. Kim -
There is a huge myth that going to a great school and getting a great job will help you build wealth. In reality, it’s more likely to bury you in so much debt that you’ll be close to retirement by the time you’re debt free. When I graduated from college (we won’t say exactly how long ago that was!), I had friends that had already accumulated about U.S. $80,000 in debt. And for some of those friends that went to med school or law school at my alma mater, they tacked on another $100,000 of debt, for a total burden of close to $200,000.
In today’s dollars, that debt would perhaps be more than $325,000. So in the first year after completing their formal education, some of my friends already had a minimum $2,000 to $5,000 monthly payment that came off the top of every paycheck. Anyway you slice it, this is an enormous abyss with which to start your journey of life.
I know that many people will have a difficult time believing my next statement, but an examination of history will support my next assertion. The great expense tied to elite institutions serves two purposes. (1) To provide a network/structure by which the moneyed elites can retain power; and (2) To burden the non-wealthy with enormous debt. In the seminal book Education and the Rise of the Corporate State, Joel Spring wrote that “the development of a factory-like system in the nineteenth-century classroom was not accidental”. Russell Conwell, a member of the wealthy elite and founder of one of America’s oldest educational institutions, Temple University, voiced sentiments he believed should be integrated into education:
“The men who get rich may be the most honest men you find in the community…Ninety-eight out of one hundred of the rich men in America are honest. That is why they are rich. That is why they are trusted with our money…It is because they are honest men….the number of poor who are to be sympathized with is very small. To sympathize with a man whom God has punished for his sins….is to do wrong.”
Elite Jobs that Build Wealth are Rare
In essence, elite education builds a caste system financed by debt. There are two predominant scenarios which students of elite educations face upon graduation. There are those that emerge from these schools debt-free and really didn’t need the advantage of an elite education anyway, and those whom are burdened with debt and will become cogs in the machine for the interests of the debt-free. For those that believe that they can dig their way out of this huge mountain of debt by working their way up the corporate ladder in the land of opportunity, think again. In 1965, CEO’s in America earned about 24 times as much as their employees. In 2006, CEO’s in America earned 262 times as much as their employees (Source: BBC News, June 22, 2006).
Furthermore, in 2005 and 2006, CEO’s from the 11 largest U.S. firms collected U.S. $865,000,000 in salary at the same time their leadership caused shareholders to lose U.S. $64,000,000,000 in company stock. Whether or not their leadership destroyed billions of dollars of wealth in the stock market was irrelevant. They were still rewarded. Such is how the modern-day caste system works.
Unless you will be studying engineering, law, architecture, or medicine, most formal education is not only irrelevant to building wealth, but you are certain to build it much more quickly if you become an entrepreneur and/or learn to invest properly. My opinion on formal education will only change when the majority of schools begin teaching what is truly necessary to succeed financially later in life. And that includes classes on:
(1) Investing in stock and non-stock assets
(2) Leveraging money
(3) Leveraging time; and
(4) Building successful networks (it’s not what you know,
it’s who you know)
As it stands now, one can go to Harvard or Oxford, earn a doctorate, and still be ill- prepared to build wealth. Undoubtedly, the network that one builds at these types of institutions is exponentially more valuable than the education one receives.
Saving Money = Losing Money
Perhaps an even worse piece of advice is to save and put money away. Putting money away into a savings account and letting it sit there at the 1% or so interest rate that banks give these days just turns your money into dust. Consider that $1,000 in 1980 can only buy less than $500 worth of stuff in 2006 dollars, and it’s easy to see that “saving” your money only loses you money. There are almost always good risk-reward investment opportunities somewhere in the world, not just stock markets. If real estate opportunities in Korea are poor, then Argentina or Iceland may be booming. It’s just a matter of widening perspectives to find them. Having idle cash sitting around and not working for you is never a good strategy when one desires to build wealth.
Want to find the land of opportunity? Go look in a mirror and you will have found it.
By: J.S. Kim -
Sunday, March 18, 2007
Wealth Building At 55 Plus - Changing Your Time Priorities
One of the facts of life is that building wealth requires a daily allocation of your time. By this stage of life you probably have some well established time habits that will need reviewing in order to free up the time required to provide financially for the future.
It always amazes me that people are willing to allocate 40 hours each week to their job so that they can earn a basic survival income yet those same people will resist when you suggest that they allocate a couple of hours each day to getting rich and having a magnificent life.
Those people are stuck in the belief system that basic survival and mediocrity is all that they are ever going to get in life. If you want to break out of that rut you need to accept that it is going to take a couple of hours each and every day.
If you are somewhere around the 55 year mark then one of the realities of life is that you may be forced into retirement in around 10 years time whether you are financially ready for it or not. Your decision on how you spend your time over the next 10 years will determine whether you spend your retirement years in luxury, basic survival, or total poverty.
You need to find time to learn the skills of wealth creation. These skills start with retraining your style of thinking and believing and then go on to include specific skills of creating capital growth and passive income.
So where are you going to find two hours each day in your busy life? Let's look at some of the possibilities.
Firstly you can find the times where you can get a two for one use. For example when you are traveling to work you could also be using that time to listen to educational audios or, if you are not the driver, reading educational material or writing your goals, strategies and action plans.
Secondly you can reallocate some of the time you are wasting now. Do you watch television? I firmly believe that television if the great poverty maker of the modern era. It is not what you are watching that is the problem; it is the fact that you are spending time in front of the television set that you could be spending on far more rewarding and interesting activities.
Groucho Marx once said that television was a great tool for education for him because every time someone turned it on he went into another room and read a book. If you take a leaf out of Groucho's book and reassign you television time to wealth creation activities you will find life far more rewarding.
If you are serious about getting rich, and at your stage in life you should be very serious about it, then you will make a list of how you are using your time now and decide how you can reallocate two hours each and every day to building a wealth portfolio that will provide you with a passive income in your retirement years.
Two hours each day for 10 years is about what it should take. The 10 years are going to going to pass anyway whether you are ready for them or not. It's your choice to make sure that you are ready financially when retirement comes.
By: James Delrojo
It always amazes me that people are willing to allocate 40 hours each week to their job so that they can earn a basic survival income yet those same people will resist when you suggest that they allocate a couple of hours each day to getting rich and having a magnificent life.
Those people are stuck in the belief system that basic survival and mediocrity is all that they are ever going to get in life. If you want to break out of that rut you need to accept that it is going to take a couple of hours each and every day.
If you are somewhere around the 55 year mark then one of the realities of life is that you may be forced into retirement in around 10 years time whether you are financially ready for it or not. Your decision on how you spend your time over the next 10 years will determine whether you spend your retirement years in luxury, basic survival, or total poverty.
You need to find time to learn the skills of wealth creation. These skills start with retraining your style of thinking and believing and then go on to include specific skills of creating capital growth and passive income.
So where are you going to find two hours each day in your busy life? Let's look at some of the possibilities.
Firstly you can find the times where you can get a two for one use. For example when you are traveling to work you could also be using that time to listen to educational audios or, if you are not the driver, reading educational material or writing your goals, strategies and action plans.
Secondly you can reallocate some of the time you are wasting now. Do you watch television? I firmly believe that television if the great poverty maker of the modern era. It is not what you are watching that is the problem; it is the fact that you are spending time in front of the television set that you could be spending on far more rewarding and interesting activities.
Groucho Marx once said that television was a great tool for education for him because every time someone turned it on he went into another room and read a book. If you take a leaf out of Groucho's book and reassign you television time to wealth creation activities you will find life far more rewarding.
If you are serious about getting rich, and at your stage in life you should be very serious about it, then you will make a list of how you are using your time now and decide how you can reallocate two hours each and every day to building a wealth portfolio that will provide you with a passive income in your retirement years.
Two hours each day for 10 years is about what it should take. The 10 years are going to going to pass anyway whether you are ready for them or not. It's your choice to make sure that you are ready financially when retirement comes.
By: James Delrojo
Five Things To Consider If You Want To Become Rich
The world we live in is full of information, opportunity, distractions, opinions, news, and rumors. Part of becoming successful is knowing what to focus on and what to ignore. Here are five things that are definitely worth focusing on if you want to become rich.
#1: What are your strengths and weaknesses?
Everyone has strengths and weaknesses. What is a strength in one endeavor could but a weakness in another endeavor and visa versa. What determines whether a characteristic is a strength or a weakness is whether it makes it easier or harder for you to achieve your specific goal.
Think about your personality characteristics and your habits and then ask yourself which of these would make it easier for you to become wealthy and which would make it harder. Once you have identified which fall into the categories of wealth building strengths and which are wealth building weaknesses then your task is to find ways to capitalize on those strengths and to risk manage those weaknesses.
#2: How much self discipline do you have?
Without self discipline success will never be any more than a theory. Everybody is busy. Everybody has distractions. Everybody has problems and restrictions. But the people who become successful despite all this are the people who have developed self discipline.
When John Powell, a former world record holder for the discus throw, retired from track and field an interviewer asked him what had made him such a great athlete. He replied that no matter what was going on in his life he always did his training and while he was training he always focused 100% on the job at hand.
#3: How much do you know and understand about economic cycles?
There is a saying amongst the self-made rich that economic cycles take from the ill aware and give to the well aware. If you are serious about becoming rich then it would be wise to become one of the well aware.
#4: How can you build a strong base of resources?
Resources are anything that you can draw on to help you achieve your goal. When it comes to wealth building there are at least four classes of resources that you need to build up.
The first resource class is your own psychology and knowledge base.
The second resource class is your team. These may include people who work for you, mentors who will help teach you, contacts who will lead you to opportunities, professionals who will do your books, write your contracts, and so on.
The third class of resources are physical resources. This could include working capital, computers or any other physical asset that could help you succeed.
The fourth class of resource is information. The self made rich always learn where they need to go to get information that will help them succeed. This could be information in regards to a specific project, or a field of endeavor or information about specific people or specific opportunities and so on.
#5: What is your skill as a leader and communicator?
Good communication skills open the door to opportunity and good leadership skills inspires people to help you achieve your goals.
Both communication and leadership are art forms that can be learned and with practice can be perfected. You can appoint a manager but leadership must be earned by applying leadership skills.. The better your communication skills and the better your leadership skills the easier it will be to become wealthy.
Conclusion
Mastering the above five areas will greatly enhance your ability to acquire wealth. It would be a good strategy to take stock of where you stand now in regard to each of the areas and then to put an action plan in place to help you strengthen yourself in each of these five disciplines.
By: James Delrojo
#1: What are your strengths and weaknesses?
Everyone has strengths and weaknesses. What is a strength in one endeavor could but a weakness in another endeavor and visa versa. What determines whether a characteristic is a strength or a weakness is whether it makes it easier or harder for you to achieve your specific goal.
Think about your personality characteristics and your habits and then ask yourself which of these would make it easier for you to become wealthy and which would make it harder. Once you have identified which fall into the categories of wealth building strengths and which are wealth building weaknesses then your task is to find ways to capitalize on those strengths and to risk manage those weaknesses.
#2: How much self discipline do you have?
Without self discipline success will never be any more than a theory. Everybody is busy. Everybody has distractions. Everybody has problems and restrictions. But the people who become successful despite all this are the people who have developed self discipline.
When John Powell, a former world record holder for the discus throw, retired from track and field an interviewer asked him what had made him such a great athlete. He replied that no matter what was going on in his life he always did his training and while he was training he always focused 100% on the job at hand.
#3: How much do you know and understand about economic cycles?
There is a saying amongst the self-made rich that economic cycles take from the ill aware and give to the well aware. If you are serious about becoming rich then it would be wise to become one of the well aware.
#4: How can you build a strong base of resources?
Resources are anything that you can draw on to help you achieve your goal. When it comes to wealth building there are at least four classes of resources that you need to build up.
The first resource class is your own psychology and knowledge base.
The second resource class is your team. These may include people who work for you, mentors who will help teach you, contacts who will lead you to opportunities, professionals who will do your books, write your contracts, and so on.
The third class of resources are physical resources. This could include working capital, computers or any other physical asset that could help you succeed.
The fourth class of resource is information. The self made rich always learn where they need to go to get information that will help them succeed. This could be information in regards to a specific project, or a field of endeavor or information about specific people or specific opportunities and so on.
#5: What is your skill as a leader and communicator?
Good communication skills open the door to opportunity and good leadership skills inspires people to help you achieve your goals.
Both communication and leadership are art forms that can be learned and with practice can be perfected. You can appoint a manager but leadership must be earned by applying leadership skills.. The better your communication skills and the better your leadership skills the easier it will be to become wealthy.
Conclusion
Mastering the above five areas will greatly enhance your ability to acquire wealth. It would be a good strategy to take stock of where you stand now in regard to each of the areas and then to put an action plan in place to help you strengthen yourself in each of these five disciplines.
By: James Delrojo
Subscribe to:
Posts (Atom)