My reason for writing this is because I’m asked by lots of people all the time how can they make money like me. Compared to the rest of the world, if you live in the USA, have a place to live, more than a few changes of clothes, and fresh food every day you’re rich. However, that’s not what we’re talking about. We’re talking about being able to have the things that you want, take the vacations you desire, and live in the homes you dream of.
The first 3 steps to becoming wealthy are:
- ALWAYS spend less than you make.
- Understand the difference between where you are and where you want to be is EDUCATION.
- Put your goals into the Do x Be = Have context.
If you cannot do any one of these three things, then you will either never become wealthy or your only chance of acheiving great wealth is inheritance or the lottery. For the latter, you will most likely squander whatever you’re given anyway, since you don’t know how to spend less than you make no matter how much you make. 😉
1. Always spend less than you make. Time and time again you hear people, couples, children, etc. say if they only made another $5,000 per year or got that raise they needed everything would be fine. All the bills would be paid and they’d be out of debt in a jiffy. So what happens when they get the raise? They buy a new house, a new car, a new flat screen, etc. because they need those things and now they can afford it. Do NOT fall into that trap. If you cannot survive for the next 3-6 months with little or no income, then you have a problem. If your goal is to be wealthy, your FIRST step in that direction should be to have enough money in savings or other liquid assets to survive for 3-6 months with little or no income! If you cannot manage your own finances well, you will never be able to manage 2 or 3 or 100 times that much money for a business. Conversely, if you understand how to manage your own cashflow, translating that to business is a cinch.
Before buying my first business I had about 5 months where I only worked part time. At that time I owned 2 sports cars, a beautiful house with a 3-car garage, 1 motorcycle and the normal stuff you’d expect from a bachelor. 🙂 At the end of the 5 months I was down to 1 sports car (that I refinanced to lower my monthly payments), no motorcycle, and a whole lot fewer motorcycle and car parts then before. I needed to turn those possessions into liquid assets to pay my bills. The lawyer bills alone from the business purchase were more than I made on the sale of my car and motorcycle together! If an opportunity presented itself, would you be able to come up with the necessary cash to make the investment? Even if it’s as simple as buying and reselling a vehicle because it’s such a great deal.
2. Understand the difference between where you are and where you want to be is EDUCATION. Rich people know something that you don’t. What is it? Maybe it’s how to buy, build, and sell a business. Maybe it’s how to invest in real estate. Maybe it’s how to master the stock market. Maybe it’s negotiating skills, or public speaking talents, or simply how to find the best deals. The reason they have more money than you is because they know more than you about generating wealth. So how do you bridge that gap and learn what they know (and much more)??? Start with The Best 6 Books to Teach you how to Generate Wealth and then spend some time on my recommended reading selections. If you want the quickest (though still incomplete) lessons to get you up to speed, read my blogs. It will be worth the time and the price is right. 😉
3. Put your goals into the Do x Be = Have context. Obviously you need to read my blog on the topic to understand the full scope of this algorithm. However, a quick summary is simply this: know what you need to Do to become who you need to Be to get what you want to Have. In other words don’t just set goals, set the correct goals!
As a quick example of this, to purchase my business I needed 2 assets:
- The cash (including the vehicles to sell to generate the cash) to pay the lawyers and support myself.
- The knowledge to convince someone else to lend me the rest.
Moreover, I knew becoming a business owner was putting me on the right track to become who I needed to Be to obtain what I wanted to Have. Which is ultimately why I buy, build, and sell businesses.
To your success in generating wealth, Bryan