The fact that you are vetting this article may imply that you are searching for better wealth creation system in generating residual income. Like yourself before, many have asked why some people are wealthy and others are not. It is shocked to know that the belief or the subconscious mind can play an crucial role in crafting the future of a person. One simple example is that if you think that you will never get rich, it will turn out true that you will not be wealthy.
So, how can you adjust your mindset so as to work on your dreams and do the things that you like at anytime? Here are the most important time-tested wealth creation principles to show you to the path to achieve financial freedom.
1. To have a millionaire mindset, you need to first tune your mindset to act like a millionaire and remove any negative beliefs about money. With reference to Napoleon Hill, “Think and Grow Rich” to help you in thinking rich. It is whatever you think or believe, you bring about i.e. the Law of Attraction.
2. Prevent spending more than you can possibly earn. If you spend more than what you have earned, you will be in trouble. If this debt further increase with loan interests, it will become a bad debt. On the contrary, it is considered to be a good debt if it is meant to build assets. It is advisable to save at least 10% of your earnings for investment. To invest wisely, you need to only hear advice from someone whom you respect and already financially free.
3. Learn to love money and learn it carefully. To get wealthy, you must put it your top effort to learn it like studying a foreign language. There are many accounting terms for example, paid up capital, assets, liabilities, net worth, gearing, leverage and etc. To become a smart investor, you need to read these terms in your finger tips.
4. Always look out for undervalued assets to be acquired. In order to gain an increase in your net worth, you can either reduce your liabilities or increasing your assets. Assets can be in the form of paper assets like stocks or real estate properties or business. In any of the three cases, you will need to have adequate knowledge in order to invest them wisely and thus building wealth out of it.
5. Know the Magic of Compounding. The more you invest in each month, the faster you will see your wealth increase through compounding. If you invested just $5,000 per year at an average return of 7% from the age of 25, you will become a millionaire by the time you hit 65. It is important that you decide on an absolute dollar amount you will invest each and every month no matter what and stick to this to see your wealth grow through compounding.
6. Leverage On Other Peoples Money And Time. The best way of making money is to leverage on other people money and their time. Many will always bring up an excuse that they do not have enough money to invest. But this may be just an excuse for them to stay within their comfort zone. As long as you are within your comfort zone, things remain the same and so do your wealth level. By knowing the trick of leveraging other people and money, you can get closer to the step of achieving your financial freedom.