Chapter 22: Financial Destiny – The Simple Way to Make Wealth
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Learn the basics of wealth creation.
Money! It is one of the most emotional issues in one’s life.
Many people are willing to give up much more valuable things to get more money.
They push themselves too hard,
take time away from family and friends,
or even sabotage their health.
Money is a powerful source of suffering
as well as pleasure in our society.
Sometimes money is used as a measure of the quality of human life,
widening the gap between those who have and those who do not.
Some people try to deal with money problems by making it unimportant,
but financial pressure is something that affects all of us on a daily basis.
Especially for the elderly,
a lack of money is often seen as a lack of vital key resources.
For some people,
money is something of a mystery.
For others, money is a source of lust,
jealousy and even contempt.
What is money really?
Is it the one who makes people’s dreams come true,
or is it the source of all evil?
Is it a tool or a weapon?
Is the source of freedom, power, security?
Or is it just a means to an end?
“Your future is created by what you do today, not tomorrow.”— Robert T. Kiyosaki
In theory, you and I both understand money as a medium of exchange.
It allows us to simplify the process of creating,
transforming and sharing value in society.
It is an amenity that we have created
together to give us the freedom
to specialize in our work without worrying about whether
or not others consider our work
to be of exchange value.
We are used to attaching the sufferings of our lives to the lack of money:
anxiety, frustration, fear, instability, anger, humiliation,
stress and many other kinds of suffering.
Can you think of any country,
or individual life without the stress of money?
Many people mistakenly believe that all difficulties in their life will disappear
if they have enough money.
Nothing is as wrong.
By itself, making a lot of money rarely makes people free.
But at the same time,
it is also silly to assume
that having a lot of money
and owning your own finances does not give you many opportunities to grow,
share and create value for yourself and for others.
So why are so many people not achieving financial well-being in today’s society?
In today’s world, there are people
who just had a tiny idea of the computer
they built in their garage
and made hundreds of millions of dollars!
There are also people with unbelievable abilities
who know how to create countless wealth and maintain it.
So what prevents us from creating wealth?
As I searched for the secrets to lasting wealth,
one thing became clear to me;
Making wealth is simple.
But many people never make a fortune
because they have holes in their financial foundations.
It is conflicts of values and beliefs,
as well as poor planning,
that almost always guarantee financial failure.
This chapter will not give you all
you need to know to take control of your entire financial life.
One chapter of the book cannot be finished!
But this chapter wants to give you a few basic elements
that you can use to immediately take control of this all-important area of your life.
We begin by remembering the power our beliefs must have to control our behavior.
“Don’t let the noise of others’ opinions drown out your own inner voice.”— Steve Jobs
The most common reason
why many people are not financially successful is
that they have mixed feelings about what it takes to have a lot of money
and what it means to have excess money,
meaning money beyond their daily living needs.
As you learned in chapter 5,
our mind only knows what to do
when it has a clear idea of what to avoid and where to go.
As for money, we have mixed results.
We tell ourselves that money will give us freedom,
the chance to give to the people we love,
the chance to do all the things we dream of,
the chance to have time to relax.
But at the same time we can believe that
in order to accumulate a lot of money,
we have to work much harder,
spend so much time that we may be too old to enjoy it.
Or we may believe that if we have an abundance of money,
we will not be virtuous, we will be blamed,
or we may be deceived by others.
So what’s the point of trying to make a lot of money?
These negative associations are not limited to us.
Some people feel envious of those
who are financially successful and often think
that if someone makes too much money,
they must have done something to compete with others.
So they are related
I think roughly, “Having too much money is a bad thing”.
This association may lead you
to conclude that getting rich makes you a bad person.
By being jealous of the wealth of others,
we easily provoke ourselves to distance ourselves
from the very sufficiency of the possessions we need and desire for life.
The second most common reason many people never master money is
because they think it’s too complicated.
They need an “expert” to help handle this problem for them.
While expert guidance in this matter is valuable,
we all must learn to understand the consequences of our financial decisions.
If you can only rely on someone else,
no matter how talented they are,
you will always blame them for anything that happens.
But if you take on the responsibility of knowing your own finances,
you can begin to take control of your destiny.
The third big reason many people fail financially is the concept of scarcity.
Many people believe that we live in a world where everything is limited;
“Life is like riding a bicycle.
To keep your balance,
you must keep moving.”— Albert Einstein
In fact, there is so much vacant land,
so much oil,
so many quality houses,
so many opportunities,
so much time.
With a scarcity mentality,
if you want to win,
someone else has to lose.
It’s a zero-sum game.
In fact, the concept of scarcity of wealth
is a concept that prevents wealth creation.
A close friend of mine,
the economist Paul Pilzer,
put forward a very famous economic theory called the alchemy theory.
Real wealth, he says,
comes from the ability to apply the theory of “economic chemistry,”
that is, the ability to take something of very little value
and transform it into something of much greater value.
“Even dust, if piled up,
will become a mountain.”— Japanese Proverb
In the Middle Ages,
alchemists tried to turn lead into gold.
But thanks to their efforts,
they laid the foundation for today’s chemistry.
Today’s rich people are actually modern alchemists.
They have learned to transform the mundane into the precious
and have reaped the economic rewards of this transformation.
All wealth begins with the mind!
Modern alchemy has been the source of economic success
for the richest people in the world today,
like Bill Gates, Ross Pero,
Sam Walton or Steven Jobs.
All of these people have sought
to take advantage of latent things of value ideas, information,
systems and organize them so that more people can use them.
And as they added this value,
they started building huge economic kingdoms.
We take a look at 5 basic lessons for building lasting wealth.
We will then act now to begin taking control of our financial destiny.
“Anyone who has never made a mistake has never tried anything new.”— Albert Einstein
1. The first key is one possibility of always winning income more than before,
The ability to create wealth.
Let me ask you a simple question.
Can you make twice as much as
you are making now in the same amount of time?
Can you earn triple? 10 fold?
one hundred times?
Definitely – if you know how to make yourself 100 times more valuable
to your company or to your loved ones.
The secret to wealth is to increase your worth.
If you have more talent,
the ability to do things that few people know how to do,
you can make more money than you think.
One of the most important and most effective ways
to increase your income is to find a way
to always add real value to people’s lives.
Why do the world’s most successful entrepreneurs achieve
so much wealth in our society?
It is because they add more value than most others around them.
There are two major benefits that these entrepreneurs create.
“Life is really simple,
but we insist on making it complicated.”— Confucius
First, they add value to their customers
by increasing the customer’s quality of life through the use of their products.
The real purpose of a company is not just to add profits,
but to create products
and services that enhance the quality of life of every customer it serves.
The second benefit that entrepreneurs bring is that,
while creating products, they create jobs.
Because of jobs, the children of workers can get a full education,
study further to become doctors, lawyers, professors, social activists
and add value to the whole society.
When Ross perot was asked about his secret to getting rich,
he said, “What I can do for this country is create jobs.
I’m pretty good at it and God knows we need them.”
The more valuable we contribute,
the more money we make if we focus on doing it.
The distribution wave of the future
One of the most powerful ways to add value in the ’90s onwards
is to understand that in today’s society,
wealth is created by distribution.
Products and services change all the time,
but those who know how to create great value and deliver
to large numbers of customers thrive.
“The key is not to prioritize what’s on your schedule,
but to schedule your priorities.”— Stephen R. Covey
Here already is the secret
to success of America’s richest man, Sam Walton.
He became rich by inventing a distribution system.
Ross Perot did the same thing with the information industry at EDS.
If you can think of a way
to take what’s already available of great value
and distribute it to the masses,
or distribute it at a low price,
you’ve found another way to add value.
Adding value isn’t just about creating products,
it’s about finding a way
to ensure people increase their quality of life.
Of course, on closer inspection,
you and I both understand why people don’t succeed financially.
The reason is that they have narrow beliefs.
But more importantly,
most people have an inherent belief in wanting
to receive without spending anything.
For example, many people want to increase their income more each year,
regardless of whether they increase their contribution to their company or not.
Increasing income must be associated with increasing value
and we can easily increase our value
if we study hard and increase our ability.
Same with companies.
Paul Pilzer said, labor is capital.
If a person has an annual income of $50,000
and can generate $500,000 in value,
why not take this person
and invest in increasing their talents, knowledge,
attitudes and qualifications,
Isn’t it a very valuable asset for them
to raise another 1 million dollars?
There is no better investment than the company’s investment in the training
and development of its own employees.
“Wealth is the product of human ability to think”- Any Rand
2. The Second Key Is Keep Your Wealth
After you have an effective strategy to accumulate money,
to earn a large amount of money,
how will you maintain it?
Contrary to popular belief,
you can’t help but maintain your wealth by just continuing to make money.
We have heard about famous people
who have accumulated a huge fortune
and then lost their hands in a short time,
for example, athletic stars through their talent have made a great fortune
but have made a fortune in a lifestyle that dissipates
that wealth as their income changes.
When their income drops,
they often have huge demands that they cannot meet,
so they lose their hands.
There is only one way to maintain your wealth,
one simple way:
spend less than you earn and invest the surplus.
Obviously this principle is not very attractive,
but it is the only way to ensure the long-term maintenance of your assets.
However, what always amazes us is that
no matter how much money people make,
they always seem to find a way to spend it.
Even the people who make the most money often fall into “bankruptcy”.
Why? Because they make all their economic decisions based on short-term criteria,
not long-term ones.
They do not have a clear spending plan,
much less an investment plan.
They went down a steep road.
The only way to build wealth is to take out a percentage of your income
and invest it in advance for each year.
Actually many people know this,
but few people apply it and so few people become rich.
The best way to protect yourself
and maintain your wealth is to set aside 10% of your earnings
to invest even before you receive it.
To maintain wealth,
you must control your spending.
But don’t develop a budget;
Develop a spending plan.
spend less than you earn and you’ll maintain your wealth.
“Inspiration is for amateurs.
The rest of us just show up and get to work.”— Chuck Close
3. The Third Key Is Increase More Wealth
How? Add one more simple
but effective element to the equation I just explained:
You have to spend less than you earn,
invest the surplus,
and reinvest the profits.
Many people hear about the progressive increase of interest,
but very few understand it.
Earnings help you use that money
to make your next profit on your behalf.
Financially successful people are the ones
who put a percentage of their money aside, invest it,
and keep reinvesting the profit
until it generates a sizable income stream
to provide the benefits needs that they do not redo.
But how to invest and in what?
There is no simple answer to this question.
You must first decide what your financial goals are.
What do you want to achieve and in what time?
What are the acceptable risks,
the ones that don’t cause you much trouble?
Without a clear understanding of what you want, need,
and your concerns about what might happen,
you won’t know what to invest in.
The most important thing in your financial life is deciding
to understand the different types of investments
and the possible risks
and returns of those investments.
Economic advisors will help you understand
the different types of investments
and their potential returns and risks.
You can also read books by expert authors on the subject.
But the important thing is that you understand
and decide to take responsibility for it about your own financial plans.
“Seven Steps to Success
1) Make a commitment to grow daily.
2) Value the process more than events.
3) Don’t wait for inspiration.
4) Be willing to sacrifice pleasure for opportunity.
5) Dream big.
6) Plan your priorities.
7) Give up to go up.”— John C. Maxwell
4. The Fourth Key Is Protect Your Wealth
Many people who have a lot of wealth still feel as unstable as
before and even more than before they had wealth.
People often feel less secure
when they think they will have more wealth to lose.
Why? Because they know that at any time,
someone can sue them for no reason
or without reason and as a result,
you will lose your property.
For example, one incident was reported by the Wall Street Journal.
A man driving while drunk,
grabbed a gun from the seat next to him and accidentally killed the gun.
His wife, instead of admitting her husband’s fault for being intoxicated,
sued the gun maker for not having a drunk safety part,
demanding $4 million in damages
and she won to sue!
A common misconception is that
in order to protect property,
one must be discreet and lie.
Actually being honest is still the best policy.
You don’t need to hide the property,
just protect it.
If you have not seen this much need today,
you will one day when you have accumulated much wealth.
“If you focus on success, you’ll have stress.
But if you pursue excellence,
success will be guaranteed.”— Deepak Chopra
5. Key Thursday Is Enjoy The Wealth Of My Work
Many people have a lot of wealth
but still do not feel happy;
they feel empty.
The reason is that they have not understood
that money is not an end but only a means.
You and I have to make sure we find a way
to share with others the benefits that money gives us,
or else it’s worth nothing.
When you discover how to give commensurate with your income,
you will experience the great joys of life.
Remember the power and value of giving.
I can tell you about the turning point in my financial outlook the day
I gave someone more than $20 when I really didn’t have $20 to give.
That day, I felt very comfortable and those feelings alone helped me
to work better and earn more money.
Many people will say,
“When I have money,
I will give alms”.
But think about it,
is it harder to give ten cents when you have 1 dollar,
or is it harder to give 100,000 dollars when you have 1 million?
The answer is obvious, isn’t it?
I don’t mean you have to give 10% to others,
but you need to have the determination
to always give a percentage of
what you earn and give away a portion of what you earn,
it will create for your mind.
Your idea is that you always have enough.
You will not feel needy and this way of believing will change your life.
I would like to close this chapter with a simple statement to you:
changing your beliefs and taking control
of your finances can be a satisfying experience in your personal growth.
Be determined to enter this path now.