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The Cycle Of
Wealth Building
Natalie Aranda
There are
foundational principles that rule the cycle of wealth building whether
you build your wealth on stock market, home loans, or any other type of
real estate investment. Many who are new to wealth building are often
not aware of, or not disciplined to follow the principles for building
wealth. The formula for building wealth is straight forward 1) make
more, 2) spend less, 3) start early and 4) manage the risks. The cycle
of wealth building consists of phases of goal setting, planning and
execution.
1) Define the goals of your wealth building both short term and long
term.
Goal setting begins with the questions of where do you want to be
financially 5 years from now, 20 years from now and by the time of your
retirement. For instance, you plan to own a half million dollar house in
5 years. You would like to accumulate net wealth of one million dollars
in 20 years. And you want secure two million dollars in your bank
account when you retire. The goal of wealth building should be
challenging enough yet realistic. If they are set too low, you won’t be
motivated to work harder. You’ll be totally frustrated if the goals are
unreachable. Studying books for personal financing and attending wealth
building seminars will help you to get it right at the beginning.
2) Develop a plan that help achieve the goals you’ve set
We won’t know exactly whether the goals of the wealth building are set
too low or too high unless they are justified by a plan. Many investors
may think one million dollar net wealth is unthinkable. In fact, if you
invest $500 a month and that invest generates 11% annual return, you’ll
be a millionaire in 30 years. 11% annual return is what S&P 500 index
has realized in past 30 years. To achieve your one million dollar goal,
you don’t even have to make the choice between “eating well” and
“sleeping well”.
3) Follow your plan and work hard
There are two common causes of failures in wealth building – 1) not
committed to the plan to work hard enough, and 2) not disciplined to
follow the plan and rules even they work extremely harder. Even
well-known investment gurus are often distracted to believe the
possibility of get-rich-quick when financial market experiences drastic
up-and-down swing.
Once you’ve completed the cycle of wealth building, the next cycle of
wealth building begins. Returns on investment contribute to building
your wealth but not if you forget about high interest rate on debts.
Taking a wealth building seminar you can discover how maintaining a
realistic and positive attitude is worth more than crying about a loss.
Wealth building can begin with a raise at work or your first income
after an investment.
Genuine wealth building is made up of learning which comes from a wealth
building seminar or personal experience, enhanced with the input and
feedback of those who are already building their own wealth. In this
cycle, cash is the king so get ready for developing enough liquid
resources and never invest if you are afraid to lose because you will be
propitiating your luck.
Article
Directory:
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Natalie Aranda
writes on finance. There are foundational principles that rule the cycle
of
wealth building whether you build your wealth on stock market, home
loans, or any other type of real estate investment. Studying books for
personal financing and attending
wealth building seminars will help you to get it right at the
beginning.
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