Welcome to the Jungle: Part One Money Series
MONEY, MONEY MONEY... few words have power to make heads turn and MONEY is one of them.
Try it at the next BBQ or in your work lunchroom. Mention the word MONEY and people want to know what secrets, tips or information you have that can give them their next big windfall. Yeah...I hear you say, not me!! Come on. I have been there and done that and even today I turn when I hear a conversation about money and creating wealth, but now I have a blueprint and can distinguish between what is noise and what is opportunity!
But what does money really mean?
For Tony Robbins, in his book MONEY Master the Game: 7 Simple Steps to Financial Freedom he says, for “some of us it is vital and crucial but not paramount. It’s simply a tool, a source of power used for a life well lived. Others are consumed with such a hunger for money that it destroys them and everyone around them. Some are even willing to give up things that are far more valuable to get it: their health, their time, their family, their self-worth and in some cases their integrity. At its core money is
In the end it isn’t the actual money that we are after...is it? What we’re really after are the feelings, the emotions we think money can create. That feeling of empowerment, of freedom, of security, of helping those we love and those in need, of having a choice and feeling alive!!
Money is certainly one of the way’s we can turn the dreams we have into the reality we live. But money and happiness have no correlation...freedom maybe, but not happiness. People think they need to make X amount of dollars to be happy or need to suffer a certain amount in order to achieve. This may have served them before or they have a blueprint that consists of them suffering and making money at the same time. This makes the pattern hard to change as it has served them in the past. Make sense yet? If not, it will!
Personally, I use to achieve to be happy. Now, I am happy achieving!! This was a game changer for me and when you get this you will be well on your way to mastering money.
The biggest thing I have learnt...you either use money or it uses you. You either master money or on some level it masters you. Robbins states, “Attaining possessions is not the goal. Money itself is not the goal. Our worth is not measured by the weight of our bank accounts but rather by the weight of our souls…The path to money, the places money can take us, the time and freedom and opportunity money can bring these are what were really after”.
So ask yourself these questions:
1. How do you view money? What does it mean for you?
2. What is the current state of your finances? You can’t manage your finances if you can’t measure where you are at. You can’t reach your financial dreams unless you know precisely how much it will take to get there and where you are today.
3. How much control do you have over your cash flow and income? Without this there is little opportunity for wealth creation.
4. Where do you go to create strategy? Where do you look for advice or guidance? Too often we go to the wrong person rather than someone who is successful in the very area we want to improve. Looking to someone who has not developed real wealth is a recipe for disaster.
5. And most importantly, what blueprint do you follow?
Millionaires become millionaires because they follow a blueprint…they reach great heights not because of luck, or hard or difficult work, or because the universe smiled on them in some unknown way. They are truly successful because they understood and followed defined and proven principles and a blueprint for creating wealth.
If your answers to some of these questions are vague or uncertain, understand you are not alone…the majority of investors do not have an investment blueprint! They do not follow ANY plan to build wealth. It’s not a subject taught in schools and sometimes one of the hardest conversations to have because people often have opinions and not a system. Remember the statistic from the beginning of this article: 95% of investors lose money from investing!
Most people’s blueprints are what they hear at the latest dinner party, what their friends are doing (after all proximity is power), what their financial planner told them to do, or recommendations from the latest property magazine. What wealth creation belief or story do you have and why? Is it a capital growth strategy or a cash flow strategy?
I have what I call the investment blueprint and I will share it with you today:
Rules for creating and preserving wealth:
1. Build a great business that creates sustainable income
2. Automate savings from the business to invest
3. Asset allocation
I then follow four core principles when investing:
- How do I not lose money
- Asymmetrical risk reward (least amount of risk for the highest amount of return: a 5-1 investment)
- Tax efficiency – pay the least amount of tax possible
- Diversification (asset classes, assets within classes, location within country and internal, currency)
Throughout the series I will go into detail on each of these rules and principles and help you create your own blueprint.
If you understand the key messages in Part 1 then the rest will be easy. You will be on your way to making real wealth and keeping it. Understanding the philosophy of money and your own beliefs around it is often more important than the strategy itself.
Think about the questions I have posed and stay tuned for Part 2…happy reading!