Step 1 – Value it – You have to start here – placing a high value on your money. Values
are things that are important to you. If money is important to you, you
look after it and give it priority and quality attention. You can only make more money if you choose that financial freedom is important, or of high value to you. What if you don’t value money? Well, then return to step 0.
Step 2 – Earn it. You don’t run behind a money bus and simply catch the money as it falls of the bus. Find some wealthy people and ask them: “Was it easy to make so much money?” With the exception of a very few who inherited a large sum of money, the answer will be:
You don’t have to learn this lesson the hard way. Secret: If you want to save yourself a few years, read the article “Action Tips from Successful People.” If you have genuinely earned your money, continue to the next step…
Step 3 – Save it. Saving is the real first step to financial freedom. It takes discipline and it takes consistency. Save every month. E-v-e-r-y month!! In order to become wealthy, it makes sense that – in addition to paying for taxes and day to day living expenses like water, electricity, food, clothes and transport – you should keep some money for yourself – right? In the article “10 Reasons why you should pay yourself first, and how” we covered why and how you should save. But there are 4 additional specific reasons why you should save:
A. It teaches you control – When you control your money you are more aware of what comes in and what goes out, to whom, by when, and why. The more control you have over your money, the more you are able to save.
B. You save to give away – giving is part of becoming wealthy. Ideally, you will give away up to 10% of your monthly income. If you cannot give 10%, start with 1%, and increase this percentage as often as you can. Giving is not just very rewarding – it is essential. It is necessary because it helps you to let money flow through you, and not stop with/at you. (Money standing still – rots. Money that flows – grows, see step 5.)
C. You save to put away for emergency – Things happen. The last thing you want is to lose all your hard effort (from step 2) and return back to step 0. Ideally this emergency fund is up to 20% of your monthly income. Again, if you cannot start with 20%, start with 2%, and increase this percentage as often as you can. Use this fund as a “buffer” fund to loan against in case of extreme emergency. However, if you do loan against it, you have to pay yourself back, with interest as your own penalty.
D. You save to put away for investments – If you have given away (to others), and have put away (for your financial safety) then you can put additional money away for investments, which can go toward step 6. It is at this step 6 where the magic of making your money grow begins to get exciting! However, you cannot succeed at step 6 if you have not succeeded at step 3. If you have successfully completed step 3 – saving, then, and only then should you proceed to step 4.
Step 4 – Spend it. Do you see why most people remain poor? They start here – at step 4! Their money comes in and it goes out. They simply spend without giving it a thought.
When you spend money, one of four things can happen:
A. You can lose it – This is true for more than 80% of the population on earth. Money comes in and they spend it. Nice clothes, interesting food, a beautiful vehicle, an investment property… But because they did not start with step 1, they go back to step 0.
B. You can waste it – Buy stuff for people. Buy things you don’t need. Buy more than you actually require. Eat out at restaurants all the time… This is the formula for getting poorer. Unlearn this step, or go back to step 0.
C. You can gamble with it – The chances of winning the lottery is a lot smaller than succeeding with a business. The chances of winning substantial amounts at a casino are less than your chances to start a good business. Wealthy people gamble for fun, not for profit. (Secret: An investment should never be a “gamble,” it is a well prepared and executed transaction.) When you gamble, chances are you go back to step 0.
D. You can improve or benefit from it. This is where you want to go to proceed to the next step. Ask the question: Is what I am buying going to cost me money, or going to make me money? Living costs like rent, food and basic necessities are essential, and have to be paid. However, if you spend your money on things that improve you, like a good book, a course or a seminar, you are spending money to improve your value. When you increase your value, you become more valuable. This will bring more money your way. Continue to the next step…
Step 5 – Give it away. All wealthy people give money away. They give to church, to charity and to those that really need it, or, to those who can put it to good use. Giving is such a big part of receiving. I haven’t figured out why it works this way just yet – I just know that it does. I have tested it, and it works.
Give away of your time, give away of your skills, give away of your money, and watch how more comes your way. The best way I can explain it is to literally hold 2 watermelons. The rules are you cannot put any down:
When I give you a 3rd watermelon, you may be able to hold it. The 4th one may be very tough and you may just get it right to hold. But from the 5th watermelon, you cannot hold any more. You cannot get any more because you have all that you can hold. It is only once you start giving away (or putting down) the watermelons that you are able to receive (hold, or get) more.
Somehow, money works this way too. In the financial formula of 10:20:70 (Another article in the making), the “10” is allocated to giving (away) to someone or another entity such a person, a group, a charity or a church. In short, if you don’t plan to give money away, there is an increased probability that you will unlikely have more money coming your way.
(See this great video on YouTube: Designing for Prosperity)
If you are able to give away regularly, you may proceed to the next step…
Step 6 – Invest it: This is where money starts to work for you. The simplest example is when you save money in an interest bearing account. The money earns interest in the bank, and you are “earning” money which is not as a result of your effort. (In essence, this is why step 3 is essential.)
Investing is a huge jump in skill because there are so many ways to invest:
Once you have invested in yourself you can start to play in the stock market, real estate, businesses or products and skills. You can spend a good 10 years here if you want. Take it slow, steady and thoroughly. Once you have made enough money, can repeat the process and have excess money, you can go to the next step:
Step 7 – Speculate with it: The final step is the most exciting. At this point in time you have mastered the required previous steps. You now have money. You now have stability. You now have safety. You now have knowledge and experience. (And it is several years from today)
Now you can play. A prescribed portion of your money can now be allocated to high risk investments or “deals”. But remember: Speculating is not gambling. Speculation is high risk transactions that have a high likelihood of giving high returns, or failing. People who succeed at speculating do a LOT of research before they throw money at it.
People who succeed at speculating have enough money that even if it was a “bad” deal – and they lost their money – they will still be financially more than okay. In other words, they seldom go back to step zero.
Conclusion:
Becoming wealthy is a step by step process. There are lots of things that can “happen” with your money, but you can make things happen by following these 7 steps, in order, from 1 to 7. Do not skip the steps. Take them 1 by 1. Become proficient at 1 before you go to 2. Invest in yourself!
The Secrets to Wealth is all about investing in yourself!
Step 2 – Earn it. You don’t run behind a money bus and simply catch the money as it falls of the bus. Find some wealthy people and ask them: “Was it easy to make so much money?” With the exception of a very few who inherited a large sum of money, the answer will be:
“Not easy at all – it took many years of hard work and multiple failures. I was living poor for a long time before I achieved what most people can only see now. Many think that I am ‘lucky’, but they somehow missed the 7-10 years of hard work I have put in to get where I am today.”Do you see? You earn money. It takes time. It takes effort. It takes dedication. (All good values) You make mistakes. You learn. It is a known fact that, because they skipped step 1 and 2, more than 80% of people who win millions of dollars are – within 4 years – back to step 0.
You don’t have to learn this lesson the hard way. Secret: If you want to save yourself a few years, read the article “Action Tips from Successful People.” If you have genuinely earned your money, continue to the next step…
Step 3 – Save it. Saving is the real first step to financial freedom. It takes discipline and it takes consistency. Save every month. E-v-e-r-y month!! In order to become wealthy, it makes sense that – in addition to paying for taxes and day to day living expenses like water, electricity, food, clothes and transport – you should keep some money for yourself – right? In the article “10 Reasons why you should pay yourself first, and how” we covered why and how you should save. But there are 4 additional specific reasons why you should save:
A. It teaches you control – When you control your money you are more aware of what comes in and what goes out, to whom, by when, and why. The more control you have over your money, the more you are able to save.
B. You save to give away – giving is part of becoming wealthy. Ideally, you will give away up to 10% of your monthly income. If you cannot give 10%, start with 1%, and increase this percentage as often as you can. Giving is not just very rewarding – it is essential. It is necessary because it helps you to let money flow through you, and not stop with/at you. (Money standing still – rots. Money that flows – grows, see step 5.)
C. You save to put away for emergency – Things happen. The last thing you want is to lose all your hard effort (from step 2) and return back to step 0. Ideally this emergency fund is up to 20% of your monthly income. Again, if you cannot start with 20%, start with 2%, and increase this percentage as often as you can. Use this fund as a “buffer” fund to loan against in case of extreme emergency. However, if you do loan against it, you have to pay yourself back, with interest as your own penalty.
D. You save to put away for investments – If you have given away (to others), and have put away (for your financial safety) then you can put additional money away for investments, which can go toward step 6. It is at this step 6 where the magic of making your money grow begins to get exciting! However, you cannot succeed at step 6 if you have not succeeded at step 3. If you have successfully completed step 3 – saving, then, and only then should you proceed to step 4.
Step 4 – Spend it. Do you see why most people remain poor? They start here – at step 4! Their money comes in and it goes out. They simply spend without giving it a thought.
When you spend money, one of four things can happen:
A. You can lose it – This is true for more than 80% of the population on earth. Money comes in and they spend it. Nice clothes, interesting food, a beautiful vehicle, an investment property… But because they did not start with step 1, they go back to step 0.
B. You can waste it – Buy stuff for people. Buy things you don’t need. Buy more than you actually require. Eat out at restaurants all the time… This is the formula for getting poorer. Unlearn this step, or go back to step 0.
C. You can gamble with it – The chances of winning the lottery is a lot smaller than succeeding with a business. The chances of winning substantial amounts at a casino are less than your chances to start a good business. Wealthy people gamble for fun, not for profit. (Secret: An investment should never be a “gamble,” it is a well prepared and executed transaction.) When you gamble, chances are you go back to step 0.
D. You can improve or benefit from it. This is where you want to go to proceed to the next step. Ask the question: Is what I am buying going to cost me money, or going to make me money? Living costs like rent, food and basic necessities are essential, and have to be paid. However, if you spend your money on things that improve you, like a good book, a course or a seminar, you are spending money to improve your value. When you increase your value, you become more valuable. This will bring more money your way. Continue to the next step…
Step 5 – Give it away. All wealthy people give money away. They give to church, to charity and to those that really need it, or, to those who can put it to good use. Giving is such a big part of receiving. I haven’t figured out why it works this way just yet – I just know that it does. I have tested it, and it works.
Give away of your time, give away of your skills, give away of your money, and watch how more comes your way. The best way I can explain it is to literally hold 2 watermelons. The rules are you cannot put any down:
When I give you a 3rd watermelon, you may be able to hold it. The 4th one may be very tough and you may just get it right to hold. But from the 5th watermelon, you cannot hold any more. You cannot get any more because you have all that you can hold. It is only once you start giving away (or putting down) the watermelons that you are able to receive (hold, or get) more.
Somehow, money works this way too. In the financial formula of 10:20:70 (Another article in the making), the “10” is allocated to giving (away) to someone or another entity such a person, a group, a charity or a church. In short, if you don’t plan to give money away, there is an increased probability that you will unlikely have more money coming your way.
(See this great video on YouTube: Designing for Prosperity)
If you are able to give away regularly, you may proceed to the next step…
Step 6 – Invest it: This is where money starts to work for you. The simplest example is when you save money in an interest bearing account. The money earns interest in the bank, and you are “earning” money which is not as a result of your effort. (In essence, this is why step 3 is essential.)
Investing is a huge jump in skill because there are so many ways to invest:
- a. Investing in yourself! (Education, reading, experts, listening to the right people)
- b. The stock market (Thousands of ways to make and lose money)
- c. Real estate (Countless ways to make and lose money)
- d. Buying or starting a business (Many ways to make and lose money)
- e. Paying for a specialised product/skill (Can make or cost you lots of money)
Once you have invested in yourself you can start to play in the stock market, real estate, businesses or products and skills. You can spend a good 10 years here if you want. Take it slow, steady and thoroughly. Once you have made enough money, can repeat the process and have excess money, you can go to the next step:
Step 7 – Speculate with it: The final step is the most exciting. At this point in time you have mastered the required previous steps. You now have money. You now have stability. You now have safety. You now have knowledge and experience. (And it is several years from today)
Now you can play. A prescribed portion of your money can now be allocated to high risk investments or “deals”. But remember: Speculating is not gambling. Speculation is high risk transactions that have a high likelihood of giving high returns, or failing. People who succeed at speculating do a LOT of research before they throw money at it.
People who succeed at speculating have enough money that even if it was a “bad” deal – and they lost their money – they will still be financially more than okay. In other words, they seldom go back to step zero.
Conclusion:
Becoming wealthy is a step by step process. There are lots of things that can “happen” with your money, but you can make things happen by following these 7 steps, in order, from 1 to 7. Do not skip the steps. Take them 1 by 1. Become proficient at 1 before you go to 2. Invest in yourself!
The Secrets to Wealth is all about investing in yourself!
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