You are lost if you do not believe that having money is a good thing. You need the self-confidence and focus to follow your dream and this will be fatally undercut if you have the wrong philosophy of life and money.

No amount of effort on your part will overcome a faulty philosophy. If, deep down, you believe that wealth is a sin or that money is dirty, or wicked then the first step is for you to correct this error or give up all hopes of wealth for you and your family. What is a 'wrong' philosophy with regard to making money? 

Anything which could be described as altruistic, socialist, collectivist, communist or any one of its thousand manifestations no matter what the label, no matter what the disguise, no matter what the smokescreen. 

Without exception, every self-made millionaire I have met was a rugged individualist. Most of them despised government, although many were clever enough not to say so in public. And believe me, there were approximately zero socialists amongst them.

A socialist, whatever he calls himself, is someone who believes that brute force should be used to loot from the productive, in order to provide handouts for the unproductive. No matter how you disguise it, or make it look fancy, that's the plain truth of the socialist doctrine. 

I believe that it is impossible for you to attempt to get rich if you have some nagging doubt that money is the root of all evil, that Capitalism is bad or that wealth should be divided up amongst the needy. You have surrendered the philosophical high ground if you sign up for any of these positions.

Let me apologise in advance if you find this a little heavy. It is my sincere wish that you read this article and stay with me. Later articles are far easier. The teachings I produce in order to help people have a better life aren't merely  plucked from the air, randomly. My views are based on a solid, 'from the ground up' philosophy of life - a thing which few people have in our compromise age of mixed economies.

It is a powerful thing to have a coherent philosophy of life. Without this, you react to life's events with a series of random, mood of the moment responses which are often contradictory and self-defeating. You pick emotions and opinions from an array of ill-considered viewpoints and hand-me-down beliefs.

In contrast, a coherent philosophy empowers you. The correct thing to do in all situations becomes obvious - it is merely a question of being strong enough to do it, which is not always so easy! No thief, no con-man no criminal will ever come close to stealing the amount of wealth taken from you by force due to bad philosophy. I am, of course, talking about state theft of your life efforts. If you do not believe such theft is wrong, your wealth-generating efforts are doomed.

LESSON 1 - DESIRE Riches

Riches are impatiently waiting for you to seize them. Your burning desire to achieve, mixed with powerful, consistent thoughts will translate into riches

Why RICHES?

With money many things are possible. Money is a tool to aid you in your pursuit of all that you want in life. Money can be your ticket to freedom. Freedom allows you to do what you want, when you want and with whomever you want.

I'm not talking about becoming wealthy and spending the rest of your days on your own island resort! Get your fair share of recreation and give back to yourself, your loved ones and society. Reach a goal and raise the bar for your next adventure. Continue to add value and contribute to ensure that you don’t become extinct!

THINK your way to the top!

It is a fact. Where you focus your thoughts and efforts; you ultimately get what you want. It is a universal law.

You may have seen someone that you admire, that person has control of their life, they have everything they want and they look incredibly content, so motivated, so focused. It is at this moment that you feel a pang of emotion, a longing to be in certain place, in a certain emotional state, not having concerns for survival but being free to take your life in a direction that you choose? It is possible for you to use those thoughts, those emotions to bring about a transformation!

“How becamest thou so wealthy?”
“You hadst nothing to start with?” asked the King
“Only a great desire for wealth. Besides this, nothing.” stated Arkad.
-- The Richest Man In Babylon, George S. Clason

The person that you admired started where you are right now. What is the difference between that person and yourself? The difference is the using the power of thought and the actions that naturally flow. If your desire to be like that person or to pursue any other worthy cause is powerful enough, that desire, mixed with your thoughts that constantly fill your mind, soon translate into riches. Thoughts are tangible, they eventually become physical actions. The speed of this transformation is entirely up to you. The speed is determined by the extent to which you allow your desire and emotions to affect the volume of thought directed toward finding ways to achieve your goal.

“It came little by little, beginning with a burning desire, translating desire into reality”.
-- Think And Grow Rich, Napoleon Hill

ACTIONS

There is an approach to seeking riches, a process that works. Here it is in summary.

1. Think of a $ figure that, for you, means total abundance.

2. Now dream in the present tense, as if you had already achieved your goal. Write it down. Use your five senses to describe how you feel, what you are doing for your self and the people around you, where you live, where you are traveling, how you are sharing your wealth and improving the lives of those that are less fortunate. Keep writing, don’t make it perfect, just get it done. The more real you picture it, the more belief you will build, and the sooner it will materialize. Get creative!

3. Now that you have dreamed your dream, you can reset your $ target. If you have completed the above ‘dreaming’ exercise properly, that figure will be higher.

4. Now think and articulate what you are prepared to do to achieve your goal. Things you might give up that will allow you to be more productive, things you must change to fulfill your destiny. You will need to commit some time to yourself each day to focus your mind, actions and capture intelligence.

5. Set a specific date for attainment. You might set a number of targets – $x in 12 months, $y in 3 years and $z in 10 years. Hold yourself to these dates, this is a must!

6. Develop a plan, a detailed plan to achieve your goal. Small tasks and larger tasks. Do something immediately, whether you are ready or not.

7. Write a statement that describes your desired goal.

8. Read the above statement daily, carry it with you, paste copies around you. When you read the statement, refer to the dreaming exercise above, visualizing your dream as if it were achieved, feel it, live it within yourself, make it feel real.

9. Monitor your progress against your plan on a regular basis e.g. weekly. Celebrate your wins!

Last say

Just wishing does not bring riches. Desiring riches to the point that it almost becomes an obsession, then planning specific ways to attain riches, and backing those plans with diligent efforts, not recognizing failure, will bring riches.

LESSON 2 - LEARN from the Rich

Immerse yourself in the sea of wealth intelligence. It is a long, hard road to riches for the inhibited individual – network and magnify the power of your mind by extracting the learning of successful people

Speed your progress

You know the statistics. By the age of retirement, only 3% can live without government assistance and about 1% of people have really made it. We all want to be in the top 1% right?

Well, I wouldn’t be where I am today unless I sought the guidance of, and was blessed by the profound influence of entrepreneurial minds, wonderful selfless, successful people. My Multi-Millionaire mentors have been an awesome strength to me. They have been insightful about what to say or do, careful not to do too much for me. I have experienced constant growth while being stretched – happily uncomfortable!

All of my life I have felt within myself that I would experience total abundance. I have had this knowledge with me and when I focused my energies upon making it a reality, I have seen tangible progress. In hindsight, when I have been engaged with one of my many mentors, I have had much greater progress. The lesson is simple. You need the influence of a mentor(s) to expedite your progress, to magnify your power to achieve. 1 + 1 = 3

"No two minds ever come together without, thereby, creating a third, invisible, intangible force which may be likened to a third mind." -- Think And Grow Rich, Napoleon Hill

Go direct to the source

Would you ask a mechanic who drives a run down Ford pick-up to fix your Porsche Boxter? Would you ask a builder who lives in an RV to build your mansion? Would you ask your local doctor to cure you of lung cancer?

I think you can guess where I am going with this. Why would you ask your accountant who prepares tax returns for people who walk in off the street to advise you how to make a fortune?

If you want to know how to become wealthy, ask around, do some research, don’t waste your time, only develop relationships with those who have strived and won the right to abundance. Your mentor relationships may be one-on-one, group or virtual/distant figures.

“It biddeth us to learn more that we may prosper more.” -- The Richest Man In Babylon, George S. Clason

ACTIONS

1. Expand your mind about what’s possible.

2. Make the most of your time. Get productive, limit the unproductive times. For example, reduce the time you watch TV.

3. Find a mentor(s). Mix within their network of associates, study what they study, start thinking like them. Pick a few big names you would like to emulate. Research their public information. Get together often with like-minded people – see Mastermind.

4. Create a regular study program – morning and evening are the best times to fill you mind with the right thoughts. The subconscious mind takes in more than you think and can aid us greatly. Whether you are listening intently or not, keep feeding your subconscious mind using audio.

5. Listen to CDs and cassettes of your favorite people while you are in the car and doing routine chores.

6. Attend seminars regularly.

Last say

With a new understanding we shall find honorable ways to accomplish our desires.” “Let us go to Arkad [The Richest Man In Babylon] this very day.”   -- The Richest Man In Babylon, George S. Clason

LESSON 3 - Become DEBT-FREE

“debt is like a deep pit into which one may descend quickly and where one may struggle vainly for many days. It is a pit of sorrow and regrets where the brightness of the sun is overcast and night is made unhappy by restless sleeping.” -- The Richest Man In Babylon, George S. Clason

Bad debt

When I refer to becoming debt-free I mean totally eradicating bad debt. Bad debt is money owed for non-income producing expenses or depreciating assets. Accruing bad debts knowingly is one of the lowest forms of human behavior. Whether you are in ‘bad’ debt or not, you should possess a hatred for ‘bad debt’. Think of it as the closest thing to hell, an entanglement, something that will destroy your will to live as you deserve. Bad debt has the potential to dull your mind, degrade your health and cause havoc with important relationships.

Good debt

As you can guess, ‘good debt’ is amassed when you logically borrow to produce income or purchase appreciating assets. When you make a commitment using good debt, there is always a margin, a safety net so that if your income is not as planned or your assets do not appreciate, you can remove yourself from the situation without incurring ‘bad’ surplus debt. The safest way to play this is to have an exit strategy prior to making a commitment to good debt. You should develop a love for good debt and use the leverage it gives you to build your wealth. Good debt - bring it on!!

“He must pay his debts with all the promptness within his power, not purchasing that for which he is unable to pay. -- The Richest Man In Babylon, George S. Clason

DEBT-FREE ACTIONS

In summary…

1. Pay yourself first! Place some money, say 10% of your income away. This is to build up some savings but, most of all it helps you feel in control of your finances.

2. Be ruthless! Commit a portion of your income, say 20% to pay off your bad debt. If you are not in debt then combine the 10% and the 20% and save 30%.

3. Make a plan as to who, when and how much bad debt you will pay off and communicate with your creditors (people/companies you owe money) to set up a payment plan. In nearly all cases they will welcome you being so proactive. This also commits you to go through with your plan. There are companies that can help you here.

4. Before you go to your creditors, obtain a credit report so that you are aware of your standing as a consumer and since your credit report is the most important historical list of your financial past and present, it's a very good idea to check it from time to time. There are companies that can help you here. If there are any discrepancies, fix them to improve your credit rating. You may be unaware of unsettled accounts, or accounts that are still open/active when they should be closed. Pay close attention to this when inspecting your report.

5. Keep away from the shops – for obvious reasons. No more Focus on necessities.

6. Setup a budget and track your spending weekly – every single $$$ you spend. You would be surprised to know how many poor people do not budget their money and how many wealthy people do!

7. Use a debit card and toss your credit card out. A debit card takes funds out of your bank account immediately so that you know from each transaction where you stand. Don’t just throw your credit card in the bin – have a special ceremony – cut it up, burn it and read it it’s last rights!

8. Keep on top of your finances. Review you situation often, make enhancements and forge ahead. Give yourself a little treat as you achieve each milestone in your plan.

Last say

Remember 10/20/70 in that order!

1. Pay yourself first and save 10% of your income before anyone else gets their hands on it!

2. Pay 20% of your income to pay off your bad debt, and

3. Use the balance, 70% of your income, to live on.
Use this formula to free yourself forever from your filthy, evil, grotesque bad debt!

LESSON 4 - How to SAVE

“ There is more pleasure in running up such a surplus than there could be in spending it.” -- The Richest Man In Babylon, George S. Clason

Why save?

Embarking on a savings plan requires that you have some good reasons to put your hard-earned cash aside. When the going gets tough - as it will - you will have decided before hand how important your savings plan is to you. Remember, money is merely a tool to aid you in your pursuit of all that you want in life.

So don’t feel miserly about the disciplinary actions you will need to take to amass your savings. Your savings and what you will do with it, will allow you to do what you want, when you want and with whomever you want.

“Every gold piece you save is a slave to work for you. Every copper it earns is its child that also can earn for you. If you would become wealthy, then what you save must earn, and its children must earn, that all may help to give you the abundance you crave.”
-- The Richest Man In Babylon, George S. Clason

Step by step

It is common for people to walk around with an expectation that one day they will be wealthy and they will fall into big money. This is unrealistic and outright foolishness - just forget it! Every now and then a miracle does occur and through a relative or gambling, a big sum is awarded. Even then, the statistics show that 95%+ of these people have spent their money with two years. Easy come, easy go!

If you are serious about building wealth, gird your loins and be prepared to put in. You will need to sacrifice, set standards and be consistent and persistent. You will need to use energy and all of your intellect. Don’t get me wrong here, this is not all blood, guts and life threatening stuff. The most difficult period is getting started and working through some of the first major challenges which you will inevitably face you. The process becomes easier as you establish good habits and apply your learnings. As you raise the bar and reach the next plateau, there will always be challenges. Let me assure you, as you progress and win, all of your efforts will become very worthwhile!

“But as Algamish had bid me, I again saved each tenth copper, for I now had formed the habit and it was no longer difficult.”
-- The Richest Man In Babylon, George S. Clason

How to Save ACTIONS

1. Analyze your expenses. You must find out how much you are spending in detail each month to set a realistic but stretching target for savings. Now I can’t tell you how much you should spend or how to live, it is your decision. You will need to understand what you are spending with your mortgage, any car payments, gas, food, clothing, telephone, cellular, cable, Internet, schooling, entertainment, animal and pets, water, gas, electricity, insurances and other.

2. Reduce expenses where your spending is excessive. Changing your spending habits can be difficult at first, depending on how long you have used inappropriate spending. A simple and very useful resource for spending/saving tips is here. You need to think carefully before selecting the expenses you are going to reduce and use in your budget. You need to consider cost/affordability versus any downside risks of changing versus the inherent benefit.

3. Set your savings target. Imprint the Richest Man’s 10/20/70 rule firmly in your mind! Pay yourself first and save 10% of your income. Pay 20% of your income to pay off any debts or save the extra 20% if you have no debt. Utilize 70% of your income, to live on.

4. Multiple streams of income. Well, you have done what you can realistically with your expenses. Now you can assess whether you can develop another form of income on top of your main career salary.

5. Never pay retail. Wealthy people love to save money buying wholesale. They never like to pay retail for anything. So get the best price, use ebay, auctions, buy second hand, whatever. Then save the money that you save!

6. Review your spending and savings plan on a weekly basis, making enhancements where necessary. Celebrate your wins.

“Wealth, like a tree, grows from a tiny seed. The fist copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed the sooner shall the tree grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner may you bask in contentment beneath its shade.”
-- The Richest Man In Babylon, George S. Clason

Last say

Move from a survival mentality to one of abundance. If you saved $5.55 per day every year of your life and invested it at 5% per year. You find yourself with a very handsome nest egg:

Note: : There is also an assumption of 25% tax paid annually. Tax payments can be reduced, refer here

Refer your tax professional regarding the impact of tax payable on the above extrapolations.
Interest is calculated monthly.

Refer also the scenarios in the ‘INVEST your Riches’ lesson.

LESSON 5 - INVEST & Multiply Riches

OK, by now you have the right mindset – you want to be and know how to be wealthy. You have your personal finances in order – a tight budget and a savings pool. You are ready to invest your savings to create massive riches.

Risk and reward

You must now learn how to invest your money at Millionaire rates. The challenge is to obtain growth at 10-20%. Anyone can invest at 3% with bank savings accounts and certificates of deposit. You can get a little more using government treasuries and bonds, even more with corporate bonds. You can achieve Millionaire rates in the stock market, some mutual funds and Real Estate. Using asset allocation, you should have money in all of these areas.

Asset allocation will determine more of your long term financial success than any individual decision. You need to spread your investments (assets) across a number of different categories of investments offering different risk, reward and market profiles. Having 10% of your overall investment portfolio in cash assets is imperative. Then, depending on your age, the balance should be spilt into two different categories ranging from high return/high risk to lower return/lower risk investments.

Power of Compounding

Compounding is the multiplying effect that is achieved when earning interest on your accumulated savings over and over. In my previous lesson you learnt that you can create a retirement nest egg of $600k by saving $5.55 per day and investing at 5%. This investment would be worth closer to $1M if you have a more effective structure and legally pay less tax. But why wait until retirement?

In the diagram below you can see the power of compounding at work. In both cases, the total contribution of $133,848 has been progressively invested over 65 years. The only difference between the two scenarios is the rate of return - 5% versus 15%. Increase your return (44 times in this case) and you can create massive wealth!

In this case, a lump sum of $100,000 was invested at year zero at 15%

Note: : There is also an assumption of 25% tax paid annually. Tax payments can be reduced, refer here

Refer your tax professional regarding the impact of tax payable on the above extrapolations.
Interest is calculated monthly.

“Thus in fifty years had the investment multiplied itself at rental almost seventeen times.
-- The Richest Man In Babylon, George S. Clason

Yeah right! So where do I get 15% or more on my investments?

Where to invest

You can invest in your own Business, or Real Estate, Stock Market and Funds.

If you are launching your own business, limit the capital you commit to it. Many people have started businesses that become bottomless pits! To discuss the criterion for investing in a business would take sometime so I will just say – don’t loose your head!

You can purchase Real Estate for a long term investment. Start with positively geared residential dwellings and expand from there. You can buy Real Estate with none of your own money and start anytime from now!

You can create an income stream using flippers, foreclosures or tax lien certificates. A flipper usually involves buying a property and selling promptly before settlement. Foreclosures allow you to purchase properties well under market value so that the mortgage holder can get their money back quickly.

Tax lien certificates can be very lucrative and are available in most US states. You can buy a certificate from the state government and assume the property taxes of a property owner who is in arrears. You pay the taxes to the government on behalf of the property owner. The property owner is now in debt to you and must pay the arrears including interest. If the property owner defaults, you can claim ownership of their property.

You can invest directly in the stock market by buying individual company shares or index funds which are a collection of company shares managed by professionals investors. As an advanced investor you should consider trading stock options but only after gaining experience in trading stocks and detailed study.

Mutual funds are the easiest place for the average person to invest. A mutual fund offers a collection of individual stocks, currencies or futures. You give them a small amount of money regularly or lump sums. Some funds (not necessarily US-based) can achieve very high returns, you should check them out here.

You may not be able to invest in these lucrative funds depending on where you are domiciled. There is a low cost method to access these funds quite legally here.

ACTIONS

1. Research the resources in the ‘suggested reading’ links below.

2. Create an investment plan that includes amounts to invest, start dates, type of investment and an exit strategy.

3. Invest. Gain experience by investing small amounts in various areas. Just start somewhere.

4. Track your investments in one place. Use a spreadsheet (MSExcel) or personal finance software like MS Money or Quicken.

5. Setup a structure before you invest to protect your assets.

Last say

High returns are great but ensure you use asset allocation to guarantee the long term viability of your investment portfolio. Do your research and protect yourself.

LESSON 6 - PROTECT Your Riches

Slash your taxes and protect your assets - all 100% legally!

Give me a break!

Hands up those how love paying taxes? Yep, as I thought – no hands. Who in their right mind what not pursue legal tax minimization strategies? After all, you have worked incredibly hard to get to where you are and every dollar is valuable to you. There are techniques to saving large sums of taxes. The mega-wealthy can do it, why not you?

Capital structures can be put in place that will allow you to spend before you pay tax on legitimate expenses and maximize your tax deductions. Setup correctly, these structures will help you eliminate some taxes, postpone payments and distribute profits tax effectively.

“Consult with wise men. Secure the advice of those experienced in the profitable handling of gold.”
-- The Richest Man In Babylon, George S. Clason

Watch your back

After you have dealt with the taxman, you still have serious asset exposure if you have a business with customers and employees, you do any form of volunteer work, you serve as a company director or officer, you give advice, you have jointly owned assets, you are (or plan to be) divorced, you own Real Estate, etc..

Eliminate risk and create walls of protection around your assets that are impervious to potential litigants and save taxes at the same time. You are best to appear to own nothing and control everything! This is possible using a capital structure – proprietorships, partnerships, corporations, trusts, limited liability companies. These structures can be setup domestically or in a foreign country.

“Better by far to consult the wisdom of those experienced in handling money for profit. Such advice is freely given for the asking and may readily possess a value equal in gold to the sum thou considerest investing. In truth, such is its actual value if it save thee from loss.”
-- The Richest Man In Babylon, George S. Clason

ACTIONS

1. Get advice to establish your walls of protection which will also minimize your taxes. Consult your professional advisor – be careful, choose wisely! Very few professionals know this essential information. Best to study these resources first – reduce tax and protect your assets.

2. Setup your capital structure before investing.

3. Seek to know for yourself. Being wealthy requires intelligence – you must know this stuff. Don’t leave it to your advisor.

4. Conduct due diligence on any investment you make, do not rely on one or two sources. Minimize your risk and investigate yourself – read the prospectus, make some phone calls, ask around.

5. Maintenance procedures are needed to continually check that the structure you have put in place is defendable and works with the constant changes in tax and law.

Last say

Your wealth will be at the most a quarter of what’s possible at retirement if do not seek to structure yourself correctly. You have worked hard to create wealth, why not use some of the techniques Billionaires use to minimize tax and protect themselves.