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OTHER ITA SITES:
Accumulating Financial Wealth
This article deals with a topic that creates confusion for a great many people. Over the years, I have found myself amazed by how little most people know about becoming wealthy.
I mean no disrespect by this statement; it just seems unusual that so many people do not have the basic knowledge of how to build a substantial amount of financial wealth.
There seems to be a misunderstanding about the difference between making money and building wealth.
Making money is necessary for your survival. Simply put, making money is just like eating. If you donít eat, you wonít survive.
On the other hand, you can live fairly comfortable for many years without ever becoming wealthy. You can live a good life as long as you continue to go out and make enough money to eat and keep a roof over your head.
What if you decide that you donít want to go out to work one day, you will have to ask your self how do I plan to eat? What if you find your self in a situation where you are unable to go out and work to provide for the food you eat for a long period of time, you could end up dying or be forced to live on welfare.
In our world in order to live, you must have money. How you live is greatly decided by how much money you have.
Over the years, Iíve worked with many people who were able to earn large amounts of money. The problem is that they never take the time to think about what would happen if they were not able to work or how would they live? They never save any money. They just live day to day.
I have noticed that these people have found themselves in situations that caused them misery because they were unable to work and provide for themselves once the income stopped or even if their income dropped. These people had geared their standard of living to match their large income and then found themselves in a difficult situation when their income failed to keep up with their expenses.
In order to stop this from happening to you, you need to learn some basic financial concepts. The first of these concepts is that you have to pay your self first, pay your self a minimum of 10% of what you earn and then invest it into your FFA (Financial Freedom Account) then use this money to build your self some type of passive income stream. In order to become wealthy, you need to have several types of income producing assets working for you. The difference between people who are wealthy and people who are not is that the wealthy are able to stop working and still earn an income.
The first mistake that people make is they fail to set aside a portion of their money, most people spend every penny they make and then some.
You need to create wealth 24 hours a day if you want to become financially independent. When you are financially free you can provide for yourself if you discontinue working, either because you want to or if you are forced to.
At the very least, you must learn the habit of setting aside a portion of your income for an emergency fund. Then if an emergency situation arises you have the ability to pay for the necessary expenses over and above what your income usually provides for you.
I tell people to put their FFA plan on automatic. By automatic, I mean that you have your bank deduct money from your paycheck and split it up in to your FFA and emergency accounts before you ever get it. This way you will hardly even notice the money is not in your account.
If you do not have a plan for creating wealth, such as a retirement account or a FFA account, you need to set one up right away. Once you start doing this, you will be amazed at how fast your money will begin to grow. Even better, you have now started another source of income that can replace your income from working every day if you choose not to.
Remember, when it comes to creating wealth, itís not what you make, itís what you keep. Pay your self first. Regardless of your current income, you can create the wealth you need to provide for yourself and your family.
It is very important that you take the time to learn how to build your financial wealth. Using your FFA to build passive income is one of the building blocks in making this happen.
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