Millionaires become millionaires because they follow a blueprint…they reach the heights they do because they have a targeted wealth creation strategy and they stick to it.
They follow seven principles for wealth creation. They are not complicated or difficult to master…all they require is an understanding and commitment to make them work.
Here are four to get you started on the path to financial freedom:
Principle #1: Pay Yourself First
Most people are brought up with the money belief of “study hard, get good grades and then get a job”. Deeply caught in the cycle of working for money; year after year simply matching expenses to income.
No one teaches us to pay ourselves first and how to accumulate assets.
Go and get a job, and the moment you have a dollar to put some of it to work immediately.
Principle #2: Who Is Looking After Your Pig?
As adults we give our kids piggy banks and say “Keep putting money in this until it’s full”.
Unfortunately, most adults forget to do the same thing.
We need to keep a track of our piggy bank and never be casual about it. Review your plan, always having a target because a deposit for an investment property will only happen once you decide it should happen!
Once your piggy bank is full, you can then use that money to build your investment portfolio.
So, are you looking after your pig? Know this: Millionaires do.
Principle #3: Your Money Must Work For You
We are often hypnotised to work for money, rather than having our money work for us.
The rich know you must also make your money work for you. The average person works hard to earn money, while the rich and financially literate understand to reach financial freedom…your money must be put to work for YOU!
It is a simple discipline (often hard to start) that pays big dividends when you start on the investing path.
Principle #4: Play The Game
Capitalism is the machine that drives our society. It drives growth and prices, and the wealthy understand this important fact and they use it. A house today for $500 000. What do you think it will be worth in 10 years? Let’s be conservative and say $800 000.
What if in the same time the debt against it was significantly reduced because the compounding impact of tax and debt minimisation strategies?
When you buy something today you are buying it at a discount in relation to its future value. This means if you buy sensible investments, they are going to increase in value, if you have strategy you will drive the debt down which means you are buying the investment at a discount price today and leveraging against it tomorrow to do it again.
These principles and more form part of a way to think about your financial situation. At Go Mortgage we think this way too and can help you build your portfolio over time and at the same time show you how to increase your safety, lower your tax payable and increase your wealth.