How Do I Create Wealth?
You can achieve significant wealth by earning or purchasing stock ownership in one or more companies during the early stages of your life, then letting the stock or other ownership investments appreciate. In real estate, it’s common knowledge to consider home ownership more beneficial than renting. If you agree with this statement, then why do you think so many Americans “rent” their skills on a job to an employer who doesn’t provide stock options? A job, then, is really only renting, unless you build equity via stock options!
If you are working at a job (while building your dream on the side), make certain that you find an employer who allows you to earn stock options. With stock options, you now become a business owner. As a result, you will do a better job and ultimately earn more money in the long run.
Building an Income-Producing Asset
Four wealth creation principles I learned as a young man are as follows:
- Principle #1: Business Ownership – Ninety-seven percent of financially independent Americans own businesses, which gives them huge tax advantages.
- Principle #2: Leverage Assets – Multiply your income potential through other people’s efforts, time, talent, education and leadership through selective partnerships. This allows you to, in effect, earn 1% of the efforts of 100 people rather than only 100% of your efforts.
- Principle #3: Royalties and Residual Income – Expend effort once, and then receive residual income for years. A book or a software program is a good example: A best-selling book can sell for years and years, yet the author only wrote the book once.
- Principle #4: Take Advantage of Trends – Positioning yourself in the right situation at the right time can make the difference. How can you take advantage of up and coming trends?
Everything I have learned about wealth came directly from one of my mentor’s wealth-creation philosophy. Because of this knowledge over the years, my family and I will benefit for a long time.
I have also learned another principle over the years that I believe should be added to the above four:
- Principle #5: Know and Trust Your Business Partners – Many people are like sharks, only in an venture of their own personal gain. Be careful with whom you do business. Over the years, I have discovered one way that works more than any other to determine the people who you can trust – and the people you can’t trust. It is simply by how people look at you. If while engaged in conversation, people continually look away from you, they are either unsure of themselves or lying. Either way, you should avoid doing business with these types, unless you want to get burned down the road.
A special wealth building note:
Two of the biggest drains on your finances are taxes and interest. It’s mind-boggling to track how much these two financial enemies steal from your household budget. I challenge you to sit down some time and add up all the money you spend over the course of a year on taxes (a good CPA can help minimize your tax burden) and interest (from credit cards, student loans, your mortgage, car loans, etc). Once you have aded this up, I encourage you to do two things to help minimize these enemies:
- Start a home-based business, which will reduce your tax burden
- Borrow as little money as possible
This is an excerpt from my book Creating Your Own Destiny.
As an Opening or Motivational Keynote Speaker, I can speak on this subject or adapt my subject to your audience.