There are several wealth-creation laws that are exactly that: established laws. And if you follow their advice, you will be wealthy. However, keep in mind that wealth means something different people. When most people hear the word "wealth," they immediately think of Oprah Winfrey, Warren Buffett, or Bill Gates. True, these people are extremely wealthy, but that doesn't imply they're invincible.
I've met a lot of interesting people during my time in the finance world. And, just as each person is unique, so will his or her wealth-building technique. Not everyone aspires to be affluent or excessively affluent, but everyone desires to be financially free, happy, and secure.
The Five Laws of Wealth Creation are listed below.
1. Determine your objectives.
Setting goals is the first step in creating your own personal road map. Begin with the end goal in mind and move backwards. If you need assistance, consult a financial counselor for the answers to these questions, but recall that you are in charge. All decisions, in the end, are yours to make. What is my current financial situation? - Where do I want to be, and where do I also have to be? - What methods will I employ to get there?
2. Debt Reduction & Elimination
"Trying to develop wealth while holding debt is like walking without concrete slabs on your feet," a CFP and mate of mine once said. Debt is like stepping on cement blocks or carrying a 50-ton boulder on your back. Consider this scenario: you want to build wealth for yourself and the family, but you have a massive debt to pay off... have you really accomplished anything? If you actually want to build wealth, you must pay off all of your "bad" debt.
3. Pay Yourself First
'10 percent of everything I make is mine to retain,' according to an old Babylonian philosophy. George S. Clason wrote "The Richest Man in Babylon," which I think is a fantastic novel that you should read. This is the most well-known and well-proven wealth-creation rule. The majority of society has been trained to pay "others" first, such as the telecom company, gas and electric organization, or bank. I'm not saying you shouldn't be sensible and meet your duties; rather, I'm saying that as vital as these expenses are, you should prioritize your financial future. Recognize that this is a process that will take time to complete. What's important to remember is that it's not how much money you make that matters, but how much money you keep.
4. Purchase and hold. And may you prosper.
A percentage of your income should be invested in real estate, enterprises, precious metals, or equities, according to financial experts. I'm not a fan of any paper derivatives, therefore I'm not going to comment on the situation. In my opinion, the greatest way to secure your money and future purchasing power is to invest in solid, long-term assets. You may not be a sophisticated investor right now, which is ok since you must first establish the favorable habits that will place you in a situation of choice. Once you've internalized these regulations, you may analyze the many options accessible to you and start planning your long-term wealth preservation strategy.
5. Be Consistent in your efforts and commitment.
Circumstances, life events, and plain "stuff" will undoubtedly test you along the way. It can be tough to find a way out of your current predicament at times. But stick to your guns and stick to the method you've devised. It's acceptable if you have to make little modifications along the road; just continue pushing forward in the direction of the objectives you set out to attain.
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