Having wealth Is not enough neither sufficient for there still exist a possibility to wake up one morning and notice one has lost all his/her wealth, here comes the need for studying and understanding the principles and keys of maintaining wealth while making more wealth.
To make wealth is not enough for wealth has to be taken proper care of like a flower planted in the front of your door. Which has to be protected, watered and make sure it receives the necessary amount of sunlight for its photosynthetic processes without which your flower would dry up.
So is wealth which would also dry up if not properly watered, protected and taken care of, and this shall be our main focus, seeing on how to give the necessary protection to our wealth as required for its good maintenance.
So many people out of ignorance lose all what they have worked so hard for years to obtain through four ways which are to be studied and understood kindly for maintaining one’s wealth and also making wealth, so below are the four ways of losing wealth which are of primary importance in making wealth as well as accumulating wealth;
1) The leaky bucket:
Looking in a more detailed way each and every one will notice most of us spend so much money in cash and through credit cards than we think we are doing nor can we imagine we are.
So here is a simple challenge for anyone seeking to maintain and make wealth, one should just make the extra effort of tracing out his/her expenditures for one month through cash and credit cards, by keeping a notebook so as to trace every dollar he/she spends.
If one succeeds in this task, he/she shall be astonished and ashamed of how much money “disappears” every month, and will be even more highly surprised when he/she applies little mathematics to see on how much can disappear for one year.
If you often spend 5 dollars daily on lunch, that’s over 100 dollars per month. If you stop for ice cream or buy a couple cans of pop or might be often bring pizza home for dinner at least once a while home but not so often, you might be finding yourself spending over 500 dollars per month over daily purchases which might seem less costly when you are purchasing them separately all the time.
Even for a couple of inexpensive dinner out followed by a movie viewing and may be a drink by both you on the way home might sum up to 100 dollars, also taking out the kids for movies can shrink one’s wallet in a great hurry which one won’t even realise as the money is going but before he/she knows it is already too late.
None of these things are bad for each and everyone enjoys having dinner in a nice restaurant followed by a good movie and cold drink, but the truth is one should add up all these things and tell self the truth of how much they cost, thereby making decisions on how many of them one can afford without hurting his/her precious wealth thereby maintaining and making wealth.
Remember all these things are purchased with “after’-tax dollars” this implies that a pizza of 10 dollars actually costs you 18 dollars in time and effort, with 8 dollars to the government and 10 dollars for the pizza seller, so multiply that with the price of a luxury car and sees he/she is talking of real money.
Thomas Stanley made a very important statement in “The millionaire next door”where he said generally rich people do not own expensive and luxury cars, luxury watches together with fancy and expensive suits because these things are too expensive for them and so stand as a threat to their precious wealth costing him too much to afford for. Here are some simple suggestions that can maintain wealth and make more wealth, making hundreds of dollars every year;
a) Making sure one keeps a simple note book so as to record all his/her purchases, just keep it simple for tracking daily spending so as to be conscious of the situation and be triggered to spend less.
b) Look for ways of reducing daily spending levels in all ways possible like renting films to watch at home than moving to a cinema hall and making popcorn at home than buying already made, just few examples out of many.
c) Often healthy snacks and simple meals cost less.
d) Always shop from a list and never go to a glossary shop when hungry.
e) It is wiser to drive an older, cheaper and smaller car.
f) Make sure one greatly reduces credit card spending and remember paying one’s balance every month.
2) We pay too much on taxes:
This can be observed especially for most Americans working for a pay check, pay the heavy bulk of all taxes which might not be fair but that is the way the system is designed.
It’s very simple to be liberated from the task laws just become educated on the tax laws knowing and understanding them so as to use them for your own personal advantage.
So start by learning the difference between “tax avoidance” and “tax evasion”, tax evasion is illegal and stupid for you shall eventually be caught and audited thus given a world of headaches, for one was cheating, so don’t do it, whereas tax avoidance is not only legal but recognised by the court as a smart and ethical business, so to reduce one’s taxes we can consider the following steps;
a) Fund any tax-sheltered first and tax advantage accounts.
b) Look often for ways to reduce personal property tax.
c) Understand tax laws.
3) It’s of great and primary importance for any wealth man to contact and find out about guaranteeing his wealth in case he/she becomes injured or suffer from a lengthy illness, this is very essential so as to prevent the collapse of his/her wealth in a single day, so one should have appropriate insurance for;
a) Belongings and home.
c) Life and health.
d) Earning capability and income.
e) Business assets including intellectual capabilities.
4) Have a will and a living will:
A written will one leaves behind is of great importance as it shows he/she has spoken responsible on who is getting what from his/her wealth when one dies, after all each and every one has a written will by the government which might not be as one planed but shall be functional and applied if he/she dies without leaving his own will of wish behind so it’s advisable to have one while you are still alive stating clearly the partition of your wealth.
There exist so many different steps on how to accumulate wealth, most of which we shall be discussing below in a brief and clear manner;
One of the ways of accumulating wealth is saving first and spending later, for saving is easier if one commits self to often keep money aside after his/her pay period as he/she spends what is left, instead of limiting one’s spending as he/she saves the amount left.
So many people are used to spending their money instead of having it saved, a simple saving plan can just include a bank saving account, or could be as well one of the many investment options available like managed funds.
Another way of accumulating wealth is ensuring enough risk in a portfolio for just little investment risk can just be as unsafe as too much investment risks.
Another way of accumulating wealth is setting goals, for if one doesn’t set for self-personal financial goals then it is not possible for him/her to know what they are trying to achieve financially.
Another way of accumulating wealth is budgeting, for it is an essential instrument to help one manage his/her personal finance and most importantly is one’s cash flow.
Budgeting requires one to list all his/her sources of income and all sources of outgoing expenses, one can finally identifier if he/she is spending more than they earn or if there exist a surplus of funds.
Another way of accumulating wealth is by saving part of pay increases and one-off payments, the next time it happens you receive a pay increase or a one-off payment see on saving half of it, because one hasn’t had this money to meet expenses in the past, so hopefully one won’t miss it again.
Another way of accumulating wealth is by consolidating accounts as this can reduce fees and charges one incurs and assisting one to reach his/her goals sooner.
Another way of accumulating wealth is by teaching children to save by setting examples for them now and they will all reap the benefits in future.
There exist different wealth building strategies for those who build net fortunes of a million dollars or even more, there has never been more personal wealth in America than there is today; yet so many Americans are not wealthy due to ignorance of wealth building strategies which we shall be discussing below.
The famous pattern of wealth building strategies which the wealthy follow was found which showed more to be the result of planning, hard work, perseverance, and self-discipline which are at the head of determining who becomes wealthy.
One of the wealth building strategies is actually ‘’living well below one’s means’’, for let no one be fooled as an average millionaire doesn’t look like a millionaire, for millionaires do sacrifice high consumption today for financial freedom tomorrow.
Most folks work hard, make money and finally spend it, while the millionaire plays a great defence as he/she instead of spending is instead interested in saving and investing to get more, which is the attitude of any one trying to build wealth they must live well beyond their means.
Another wealth building strategy is ‘’spending one’s time, energy and money in ways that eventually build wealth’’ thereby sacrificing present high consumption so as to obtain future financial freedom.
Do a lot of investment planning, go to and attain seminars, do hire good attorneys together with tax accountants, coaches and mentors, as one learns to invest in assets that produce more income.
The wealthy men and women spend money only when the investment would not only protect but also grow their assets, millionaires also know the details of any of their spending; money spend monthly on food, clothing and also shelter.
Another wealth building strategy is ‘’choosing financial independence over displaying high social status’’ as the wealthy do run highly efficient operations both at home and in business, with most living in average neighbourhoods and do drive average cars.
Another wealth building strategy is ‘’refusing to accept economic support from one’s parents once out of home’’, although it sounds painful it is an important fact that has taught all the wealthy how to earn, maintain and invest money.
Parents of all the wealthy just cannot provide economic outpatient care as the results have often been observed that more dollars the adult child is been given, the lesser they accumulate.
The truth is that those who are given just little are been self-motivated to accumulate even more on their own merits, whereas is the contrary with those who receive greater.
Another wealth building strategy is ‘’teaching one’s children to be economically self-sufficient to raise a wealth mind set’’. It is said provide your children with fish and they would eat for a day, teach them to fish and they would eat for a life time.
Another wealth building strategy is ‘’becoming proficient in targeting market opportunities’’ as the wealthy would do by finding their niche, following where the money flows and looking for well specialized opportunities.
Another wealth building strategy is ‘’choosing the right occupation’’ which one is willing and finds joy doing it, which has a good income following the job.
There exist so many ways to accumulate wealth some of which we shall briefly discuss below;
One of the ways to accumulate wealth is by believe in one’s self, for if one doesn’t believe in self then it is a battle lost in advanced.
Another way of accumulating wealth is understanding and providing the necessary value to the customers and not only trying to make much profit, for money follows value.
Another way of accumulating wealth is opening up one’s own business, which shall serve as a source of wealth moving in to one’s life.
Another step of accumulating wealth is being generous to all, for when one gives out without any expectations in return then he/she will be paid back his/her good actions by the natural force which is being stimulated to bounce back in double what one has offered for free.
After going through in a detailed manner though the above steps you can be master of your wealth preservation and maintenance so as to evade from unwanted misfortunes coming from left and right to take away from you your precious wealth.