Whenever we read about building wealth or even attend a seminar for that purpose, we usually start by assessing our present financial status. When Building Wealth by Russ Whitney was first released in 1994, it was hailed as a cutting-edge, comprehensive book that offered a step-by-step plan to reach financial independence and build long-term wealth. With a successful wealth building strategy comes the understanding of what kinds of diversification offer you the protection you need from taking great losses in the short and long term. As far as courage goes when it comes to wealth building, many people tend to be like the cowardly lion from the Wizard of Oz.
There is a cult of self-sacrifice evident in our culture that warrants you to be extra busy, working super hard, and putting in crazy hours. When it comes to personal building wealth and attaining success, you're the golden goose. However, you can only push the golden goose so hard before he/she stops laying those golden eggs. Without exception every golden goose will eventually run out of energy, capacity or enthusiasm. Therefore, learning how to utilise Other Peoples Time, Money and Skills (i.e. leveraging) is a pre-requisite to becoming rich, building wealth and achieving success.
In general terms, getting access to Other People's Money (OPM) is a form of leverage that enables you to go beyond the limits of your own resources and instead apply resourcefulness to everything you do. In business terms, leverage is the key that differentiates self-employed person who owns a job from the business owner who own a business. In financial/investment terms it means getting access to cash that's not yours in order to buy assets that you control and that produce income.
The key ingredient that separates winners from losers is discipline and playing the odds at the right time, if you adopt the mindset to succeed, have confidence and are prepared to take calculated risks you can win in what is probably the most lucrative of all ways to build wealth fast. To build wealth you need to balance the risk reward and aim for the highest reward, with low downside risk.
Wealth building is a process, it starts with you. You can start on a shoe string or have enough financing to get a large leap into the business you have chosen. The other part of the wealth building process is the management of income that is earned by your efforts. This revenue should do 2 things, one is for paying your basic business expenses and the other is for building the wealth portion of your life. This is inclusive of obtaining income producing long term equity assets such as real estate, oil leases other business investments. There are two other considerations, your current lifestyle and the overall marketing and business strategies.
Most people's typical first experience of using Other People's Money is when they take on a mortgage to buy their home. Typically, their initial down-payment combined with their contract of employment that demonstrates their ability to produce future income is enough for them to secure a mortgage loan against home. Unfortunately your home is not an asset, well it is, but it's the bank's asset as they are making income from the loan advanced, not you. If you can get a bank to advance you a mortgage loan so as to purchase an investment rental property (an asset) whereby you get to retain what remains of the rental income after you pay the mortgage, then you have used Other People's Money to buy and asset to produce income. In order to secure this loan you need to demonstrate to the bank that you are a safe bet. They will typically want to see that you have at least 20% of the purchase price as a down-payment and sufficient net income being generated by this asset and other sources to ride out any changes in interest rates, rental void periods etc.
There is a cult of self-sacrifice evident in our culture that warrants you to be extra busy, working super hard, and putting in crazy hours. When it comes to personal building wealth and attaining success, you're the golden goose. However, you can only push the golden goose so hard before he/she stops laying those golden eggs. Without exception every golden goose will eventually run out of energy, capacity or enthusiasm. Therefore, learning how to utilise Other Peoples Time, Money and Skills (i.e. leveraging) is a pre-requisite to becoming rich, building wealth and achieving success.
In general terms, getting access to Other People's Money (OPM) is a form of leverage that enables you to go beyond the limits of your own resources and instead apply resourcefulness to everything you do. In business terms, leverage is the key that differentiates self-employed person who owns a job from the business owner who own a business. In financial/investment terms it means getting access to cash that's not yours in order to buy assets that you control and that produce income.
The key ingredient that separates winners from losers is discipline and playing the odds at the right time, if you adopt the mindset to succeed, have confidence and are prepared to take calculated risks you can win in what is probably the most lucrative of all ways to build wealth fast. To build wealth you need to balance the risk reward and aim for the highest reward, with low downside risk.
Wealth building is a process, it starts with you. You can start on a shoe string or have enough financing to get a large leap into the business you have chosen. The other part of the wealth building process is the management of income that is earned by your efforts. This revenue should do 2 things, one is for paying your basic business expenses and the other is for building the wealth portion of your life. This is inclusive of obtaining income producing long term equity assets such as real estate, oil leases other business investments. There are two other considerations, your current lifestyle and the overall marketing and business strategies.
Most people's typical first experience of using Other People's Money is when they take on a mortgage to buy their home. Typically, their initial down-payment combined with their contract of employment that demonstrates their ability to produce future income is enough for them to secure a mortgage loan against home. Unfortunately your home is not an asset, well it is, but it's the bank's asset as they are making income from the loan advanced, not you. If you can get a bank to advance you a mortgage loan so as to purchase an investment rental property (an asset) whereby you get to retain what remains of the rental income after you pay the mortgage, then you have used Other People's Money to buy and asset to produce income. In order to secure this loan you need to demonstrate to the bank that you are a safe bet. They will typically want to see that you have at least 20% of the purchase price as a down-payment and sufficient net income being generated by this asset and other sources to ride out any changes in interest rates, rental void periods etc.
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Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: Tips On Filing For Private Bankruptcy You have full permission to reprint this article provided this box is kept unchanged.
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