What Wealth Really Is And How You Can Create It
Well, it’s the 5th of July, one day after Independence Day. Yesterday, while celebrating the United State’s independence, I thought about how I can help you by explaining what it takes to achieve true financial independence.
So let’s start with a real-world and easy-to-understand definition of wealth. If you look in some financial literature, they give some somewhat complicated definitions of wealth. And many people think wealth is related to how much money someone makes, which is very shallow in my opinion.
The definition that makes the most sense and is the most realistic is inspired by Robert Kiyosaki’s book Rich Dad, Poor Dad, and here it is:
Wealth is how many days, months or years you can repeatedly pay off your monthly expenses without working a job.
For example, let’s say you require $2000 every month to pay off all of your expenses and have $6000 in your checking and savings accounts. You leave your job and you have no passive or residual income coming in. In this scenario, your wealth is 3 months.
Now let’s say you require $2000 every month but you have a passive income of $2000 every month. What is your wealth? In this scenario, your wealth is infinite.
Imagine that, being wealthy and only making $24k a year.
Your passive income income is covering all of your expenses EVERY month, so you don’t have to work a job unless you want to. When this happens, you get to leave the “rat race.” The “rat race” is simply depending on a job to cover our expenses and living pay check to pay check.
So wealth is simply how long you can repeatedly pay off your expenses without working a job.
Now how do you create wealth? Well, the formula is VERY simple, but it’s rarely taught, so most people don’t know it or ever encounter it, which is very sad. But since you’re here, I’m going to expose it to you.
But before I give it to you, let me give you some easy-to-follow definitions of assets and liabilities:
An asset is anything that creates money for you repeatedly.
A liability is anything that takes money away from you repeatedly.
In other words, your house is typically a liability to YOU (you repeatedly pay a mortgage every month) and an asset to your BANKER (you repeatedly pay your banker interest every month).
So, now let’s talk about how to create wealth so you can become financially independent one day. Here’s the formula the rich use:
Wealth Creation Formula = Buy Assets
That’s it? Yes! Keep it simple!
And if you are wondering, your Network and Internet Marketing businesses can be liabilities INITIALLY if they are not making you any money. However, I recommend you invest in yourself heavily and learn as much as you can about Network and Internet Marketing because over time, they can become your best asset.
If you ask me for a time frame, I recommend you give yourself at least 5 years to learn Network and Internet Marketing.
Wow, Forest, that’s a lot of time!
Is it really? Most people spend 4-5 years in college just to get a job and stay the “rat race” their entire lives. Why not work on your personal philosophy and give yourself and your businesses 4-5 years to create true wealth and achieve financial independence?
If you like the information provided in this blog and you want to learn more and improve your financial and business intelligence, do yourself a *HUGE* favor and head over to your local bookstore and pick up a copy of Robert Kiyosaki’s Rich Dad, Poor Dad or you can purchase it from Amazon below:
Additionally, I would strongly recommend you head over to Rich Dad’s Communities and see if you can find a Cash Flow 101 club in your local area.
Cash Flow 101 is a board game that teaches you how to get out of the rat race and improve your Financial IQ. To see a quick demo of the game, check out this link:
I host a Cash Flow Club myself and if you are in the Baton Rouge, LA area, contact me for the times and meeting location.
If you don’t see one in your area, be the leader, buy the game and start one. It’s one of the best mastermind activities you can do with your organization in your Network and Internet Marketing businesses and a great way to attract entrepreneurs or those wishing to become entrepreneurs.
Remember to buy assets so you can have unlimited wealth and become financially independent.
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