Note: samples taken from the tape series “Multiple Streams of Income” by Robert Allen
Seven Skills of Wealthy People:
Skill # 1– Value your money:
10 Categories for Receipts:
- 1. Tithe 10%
- 2. Self 10%
- 3. Taxes (0-30%)
- 4. Shelter (house or rent payments)
- 5. Household Expenses (food, clothing, TV, Utilities)
- 6. Automobile/Transportation
- 7. Fun and Entertainment (meals out, toys, movies)
- 8. Insurances of all kinds
- 9. Miscellaneous/Payments towards debt
- 10. Business expenditures
How many times/day do you spend money? Those few decisions per day make all the difference between poverty and wealth. Rich people spend approx. 1 min. more per money event than the poor person.
The money event: The wealthy person on the average takes an extra one minute for a money transaction because they do these steps:
- 1. Decide what you want- get only that- don’t succumb to impulse items. Plan your needs and PROCRASTINATE your wants.
- 2. Choose item- compare costs and pick the best value
- 3. Ask for and expect a discount if possible
- 4. Make a quick mental calculation of your savings which makes you feel good
- 5. Next take the item to the check out stand. Pay w/ cash/credit/check
- 6. The item is rung up. Collect your receipt. Check the receipt for accuracy.
- 7. Write the number of the category on top of the receipt (see above)
- 8. Record the event in your money journal. Balance your accounts (cash, check or credit card)
- 9. When you get home file the receipt in a well-organized manner for easy retrieval.
This will lower your monthly spending by 20% Helps you see where you are spending your money which gives you more control of your finances. The biggest advantage of this type of transaction action is for tax deductions. This adds up to an instant guaranteed 30% return on your money because you are spending pre-taxed dollars for business investments and keeping track of those transactions. This makes millionaires –FAST. Manage the leaks.
Skill #2– Save your money. Accumulate more assets than leak out. Turn on the faucets and plug the leaks. Repay and stay out of debt. Manage your assets.
- Save money- Buy wholesale wealthy people love to save money.
- If you quit smoking put that $100 away and invest it. Get the money out of your spending grasp.
- Cut living expenses by 30% in 10 minutes. Take one credit card that you want to save and put it somewhere that you can’t get at it. Now cut the other ones up. Your savings will go up 30% automatically within 12 months.
- If you have the money you will spend it. Don’t carry a lot of money. Put your money where you can’t access it easily. This eliminates instant gratification. We are bombarded with an average of 10.000 ads/day to purchase things.
Skill # 3– Invest your money.
Invest your savings at billionaire rates (10-20% interest) Use the 10% you use to pay yourself.
Emergency bucket– Accumulate 3 months worth of living expenses saved in an insured bank acct.
- Conservative- Mutual funds, bonds, CD’s
- Moderately risky
- Very risky investments
- The longer you invest the lower the risk. Don’t expect to move your money for many years. Don’t play the market. Invest every single month regardless of where the market is heading. Have the money automatically withdrawn from your bank account.
- By No Load funds (that mean no commissions paid)
- Read some great books on the stock market e.g. Beating the Market by Peter Lynch
Skill #5–Making Money:
- Everyone should create multiple streams of income. Everyone needs a home based business.
- Network marketing or real estate investing are two good choices
Skill #6 –Protect and Preserve you money:
Don’t leave personal assets unprotected. Build corporations, trusts, LLC’s to protect your money from lawsuits. Divert assets from your own personal name into protected areas so that you can live like a millionaire physically but look like a pauper on paper.
- Thou Shalt avoid conspicuous consumption
- Thou Shalt avoid putting assets in your own name
- Thou Shalt never co-sign a loan for anyone—ever.
- Thou Shalt carry adequate liability insurance
- Thou Shalt NOT serve on a board of directors
- Thou Shalt avoid all recourse debt (debt where you are personally liable)
- Thou Shalt operate thy business from a corporate entity
- Thou Shalt not go into business without a detailed business plan
- Thou Shalt never enter a partnership without a fool-proof simple plan for getting out.
- Thou Shalt never put all thy eggs in one basket
- Thou Shalt always assume the worst as you will probably be optimistic. (Plan for the worst but expect the best)
Skill #7–Share your money
- Giving is essential to your wealth. Money reproduces fastest when it is divided. It’s all God’s money anyway.
- Sharing primes the pump for the universe. Plant trees where others will get the fruits from.
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