The ultimate goal of wealth building is financial freedom - when your passive income supports your lifestyle, and you work because you choose to, rather than because you have to. When you create your spending plan, it should reflect your personal priorities. Here's a scenario: People buying used cars come to your shop for inspection before they buy, and you realize that many of the things you check during your inspection, the consumer could easily check for themselves.
And, you'll want a financial advisor to help create your overall plan. In addition to expert advisors, hire bookkeepers, housekeepers, assistants, etc. Think of it more like a framework for financial decision-making that serves your long-term interests at the same time providing resources for you to enjoy the present. Sometimes, you want to leverage someone else's money.
Millionaires "hire" time. It doesn't need to be restrictive (like a budget). You'll need advisors to set up an incorporated business for your tax strategy as well as asset protection. Spending Planning* When the cash starts rolling in, a common mistake is to allow spending to keep pace with the increased income. Wealth building, for the most part, involves four financial aspects: Growing a gloves making machine cash machine Allocating assets Spending planning Managing/eliminating Debt Growing a Cash Machine* This is the most important aspect of the wealth building foursome. Buying income real estate is an example of such a time.
Allocating Assets* With the income from your cash machine, plus all your other assets, create a comprehensive plan for your assets to work for you. Those kinds of wealth are wonderful, definitely. You cash machine is an incorporated business, which is ideally based on leverage of your existing skill set. Invest in building yourself a team of experts and support personnel.First, a definition of wealth. One of your most important assets to allocate is time.
Use the wealth building foursome to lay the foundation of your financial freedom. You've heard the saying, "Stop working for money and get money working for you. How can you leverage your skills so that you have a business that makes money while you sleep? (The definition of a cash machine). That's a service. Make them into an ebook, hire a marketer, and voila' you have a cash machine. For example, say you are an automobile mechanic. You teach a class at the community college and you package the hand-outs you've created for the class. However, not all debt is bad.
If you haven't already put a team together to grow your cash machine, with asset allocation a team becomes critical. Exactly what "lots of money" means is subjective, but let's say that when your annual income becomes your monthly income, you're playing in the wealth ballgame. I'm not talking about a wealth of friends, or interests, or experiences. Wealth builders are generally entrepreneurs. But right now, I'm talking about money - lots of money. But for the most part, a focus on minimizing or eliminating debt is a sensible part of any wealth building plan. That's simplified, but you get the idea.