The Steps to Building Wealth Are Constructed Upon These 10 Foundation Blocks – part two

Jan. 16, 2011 - PRLog -- … continued from part one.
Recap: The importance of managing your money and estate; the significance of controlling your credit, debt and taxes; the nature of insurance; understanding investments and how to predict economic changes; lastly real estate, retirement and your relationships.  Success or failure depends upon the actions taken to achieve mastery of each wealth characteristics so just not trying is only going to get nothing.  

5) Insurance – Everyone hates paying for something that seemingly gets no return and as much as today it not needed the protection for all of your assets ensures you can maintain wealth, always protect assets first or lose them.  The rich make sure they have complete coverage for life, medical, long-term care, disability and including family members.  All it takes is a single slip or fall and either you can be out or the asset taken away.  Act now before and not after it’s needed, don’t learn the lesson the hard way instead learn why it’s so great to already have insurance protection, accept it as part of paying yourself.  Bottom line “Just Do It”.

6) Understand to Predict the Economy – The wealthy know it is nearly impossible to predict the future, however, knowing what indicates changes to the basic economic state is not too difficult.  Start with knowing how the government influences the economy, the impact of the monetary system on investments, meaning when to be an investor (or change your investments) vs being the bank and lending.  Understand whose economy impacts your wealth building plan.  How does unemployment rates or retail sales changes in other developing nations related to the local economy. Just like reducing taxes (which is the government fiscal influence) one needs to avoid having money in markets that can cost you more, know which indicators to watch for that change investment growth or even which can spark new growth opportunities.  

7) Investments - Understand investing is such a large topic that one could be learning for a lifetime unless you take it one investment vehicle at a time.  Have you noticed that the rich all seem to have built wealth from knowing one investment type really well, mastering it before moving onto the next investment vehicle.  Don’t load up on different types of investments until you fully understand the first one.  Create a strategy for each type of investment (write it down) as this plan will keep you on track.  Create the investment strategy knowing when to move or change investments, have the escape plan in place so once you have hit the growth target you can combine it all into the next planned opportunity.  Set yourself some ground rules for each different investment vehicles as you learn or build upon your success.  

8) Real Estate - There has been wealth created through real estate and there is opportunity for much more, don’t under estimate the future value.  Learn what the wealthy have already figured out; know what type of real estate to be in (residential or commercial); the market location and; how each one can hurt you.  Wealth is still created in a down turn so long as there is positive cash flow from the real estate investments, because the investment pays for itself you can choose when to turn it into a capital gain.  Even better the wealthy know how to buy the investment at below market or wholesale price so the gain is real made when it’s bought not when it is sold later.  Real estate is always about the cash flow, the numbers each month must add up in your favor.  To create wealth, know what can change the cash flow, have protection against costs and how to increase the value tenants pay are key.  Real estate most of the time it is not glamorous or flashy but more like repetitive profit checks (that I can live with) when the research is done, due diligence and negotiating combine together.  

9) Plan for Retirement – Create a plan for the future, what to do in retirement is like making the list of your desires if you did not have to work anymore.  What would your lifestyle be?  What kind of spending habits or traveling would you do?  You’ve got to figure this out now, put a number to it to have a financial target.  Then take the actions to build and grow wealth to meet your retirement goals.  The rich have already set and met financial goals on their path to financial freedom.  Having the plan of how much is needed in the future to cover retirement monthly bills, how many years you plan to live a free lifestyle, not to mention any taxes and where future funds will come from are important things to know and to create goals for.  The wealthy are not expecting the government to flip the bill for their worldwide travel adventures.  Nor is the government going to provide you with a tropical island retreat when you retire either.  If anything the governments will claw back additional taxes, so plan to be self-sufficient with your own investments.  Learn about variable annuities these vehicles can continuously pay you in retirement.  Creating and mastering all of these wealth characteristics the number one question should be why, what’s in it for me.  Retirement is really for freedom and with all of these steps to building wealth in place you will be financially free to do what you always wanted to do.

10) Money and Relationships – The rich, your neighbors and maybe even your family have proven that money is the number one cause of most breakups.  So it is extremely important that everyone must be on the same page with respect money, cash flow and retirement planning together.  Or have in place terms that ensure protection for both parties involved.  But truly a commitment to each other includes the financial aspects for your future lives together and retirement freedom.  With both working together for the same goals and the money management combined with investments are keys to the relationship lasting beyond retirement.  Remember you and your significant other are in this together or not at all.


Build wealth by developing these solid wealth characteristics, master each one of the foundation blocks and interconnect then together so all your money grows.
Serious about learning more steps to building wealth or implementing your own financial foundation blocks, please start by visiting http://www.applyingwealtheducation.com/. Our goal is to share the knowledge for building wealth.

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About Applying Wealth Education: Our goal is to provide educational resources and techniques for creating wealth for true financial freedom. Increase your financial IQ, financial awareness and ultimately learn to build wealth by managing your money to grow. To learn more go to http://www.applyingwealtheducation.com/