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| The Steps to Building Wealth Are Constructed Upon These 10 Foundation Blocks – part oneWhat are the ten most common characteristics between the wealthy? Would you like to know what secure actions they take or what holds their fortunes together? Building wealth will require you to have mastered these same 10 major foundation blocks.
By: Drew Applying Wealth Education Recently Mr. Money (Mark Rothstein) shared with me the necessary foundation blocks to build great wealth, for maintaining wealth and ultimately creating financial freedom. These wealth foundations or characteristics steps to building wealth must all be implemented, mastered and maintained because each block holds a key to your financial freedom. 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. Your success or failure depends upon the actions you take to achieve mastery of each wealth characteristics. When one of the best money managers in the business elaborates on the details of the committed actions of his successful multi-millionaire clients, you must take notice that these are action you should also be doing in order to achieve great wealth. The knowledge gained by the explanation of these critical wealth foundation blocks is priceless so long as you are committed to completing each step to financial freedom. These are the 10 foundation steps to building great wealth that you need to know; 1) Money Management – AKA your monthly cash flow or budget, except the wealthy have mastered how to always have massive positive cash flow. If you don’t know how much money is coming in, where it needs to go or even what the plans are for this cash then is it going to end up in the right place. A great money management system develops the habit of dividing income into pre-determined different categories. Each category with its own investing, saving and spending rules. This allows you to establish rules, set goals and plan big. The smartest thing rich people do is to get financially educated on how to manage money or make investments grow. So go out and ask as many financial advisors as you can to find out what’s right for you to retire or become financial free. Remember this is your money and therefore yours to control, protect and grow for the future. 2) Do Estate Planning – The rich do this early on to know that those important to them are taken care of, far too many people leave this until it is too late. Did you know that your assets and the decision of where/who controls them could end up in the hands of the government if you’ve not defined them. The right thing to do is declare how, who and what assets go to the important people or foundations in your life in the event of your death. That way you know all your efforts are helping the people who matter the most to you. Consider that there are tax laws out there that will potentially tax the beneficiary and the estate prior to the funds being transferred or even generate back taxes. Enduring power of attorney, in the event you become incapacitated you’ll want to have the right responsible person with your pre-define decisions to act on your behalf so you and your wealth will live on as desired. The decisions of health care in the event you are unable or how the bills get paid, long-term disability or even long-term care. Of course the wealthy have already created a statement of desires to clearly identify how they want to be remembered and the legacy honored. 3) Credit and Debt Management – This is simple for the rich, either they have a plan in place to pay off debt or only buy what they can pay for. The rest of us do not have a plan to get out of debt and how to stay out of debt problems, in stead most people buy-now, hold off on payments only to find themselves far behind. Building wealth and collecting assets is not about over extending leverage to a point where all the payments take away the value of the assets. As mentioned before, managing your money is very important but having a plan of how to get out of owing for things and sticking to that plan is a characteristic all be itself. Remember you want to become the banker not the debtor in life. Pay down or pay off credit cards, theses are known as revolving debt, once the balance is at zero get a confirmation statement and keep them at zero. Some people suggest freezing the card in water to prevent you from emotionally using it but cancelling a card might be bad for your credit score. Also one can take advantage of utilization rating by increasing the credit limit such that the amount owing is less than 30% of the maximum limit; just make you look like a better money manager. But be warned of the temptations to spend and use that extra credit. This method is for those who have control over themselves. 4) Income Taxes – The rich and wealthy do pay taxes. In comparison to most they pay only what is needed where as everyone else seems to pay extra because we really don’t know that we don’t have to pay it all. One of the easiest ways to not have wealth is buying over paying taxes, meaning paying more than your far share. Is it the government’s job to return your extra taxes or are they just going to spend it? To get the most benefit, that is to not pay more tax than you need to, work with a great tax accountant someone who has demonstrated success with rich people. The first thing to learn is what's safe to deduct, how to avoid being audited and the type of legal entity you or your business should become for the best tax protection. Basically always ask “why am I paying this tax” and can it be reduced or eliminated, a tax specialist will make sure you benefit and so you keep more of your money. I’m not saying cheat the system, I am saying make it easier for the government to count your tax contribution by giving them the minimal, don’t make them count extra. To get the rest of these foundation blocks for the steps to building wealth continue reading at http://www.prlog.org/ # # # 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/ End
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