Earnings: Never Depend on Single income. Make Investments a second source. Most time people do not get rich, from just having one income source. Most wealthy people develop multiple income sources (They develop them one at a time), to maintain a secure level of cash flow. Losing your sole income source, can be detrimental to your quality of life. By seeking to make invest into assets that either appreciates in value or that generate income, you begin to create your on personal security blanket that you can leverage in times of good or bad. Spending: If you buy Things you do not need, soon you will have to sell things you need. This reminds me of the famous Fight Club quote – “We Buy Things we don’t need to , with money we don’t have, to impress people we don’t like.” This sounds similar to Buffet’s quote, maybe he moon lights as Tyler Durden on the Weekend. No matter if a Cult Classic icon or Real Life Investment Guru, says it, these statements hold true. Most things that we buy, we don’t need and don’t have any value. Jewelry, Sneakers, Pocketbooks and Clothes are American favorites. Sadly, once you walk out of the store, you can never get your full value back. During troubling times, nobody wants to buy these frivolous items, Outside of the bare necessities, like food, shelter and basic clothing, only things of productive use are attractive. Entrepreneurs are only looking for things that can create greater for them. In the long run, it is wise to mostly buy items that will produce value for you, instead of the items that are guaranteed to be worthless. Savings: “Do not save what is left after spending, but spend what is left after saving.” Savings are crucial. In the best seller book “The Richest Man in Babylon”, the author, states that you must save a tenth of all of your earnings first, before you pay any bills or purchase anything. The logic behind this, is to amass an nest egg and that you can then leverage to use for your investments in the future. Diversification Also, there are some many things looking to get wallet share, that if you don’t put yourself first you will be at the back of the line. This becomes a bit disheartening and is a huge reason why people become uninterested in their finances. Taking Risk: Never test the depth of the river with both feet. No one will become wealthy without taking risk, unless you inherited your wealth. However, you must take smart and calculated risk. If you jump from a plane without a parachute, what are the odds of landing successfully? None. If you jump from a plane with a parachute, your odds of successful landing are much higher. So you have to look for those smart risk. Investing: Do Not Put all eggs in one basket. The multiple baskets theory is very popular. Some call it diversification. If you have all of your eggs in one basket and that basket is destroyed, breakfast is ruined and it may take you a while to get more eggs. If your basket is destroyed and you have a few other baskets then you can get eggs for your breakfast from another basket. Expectations: Honesty is a very expensive gift. Don’t expect it from cheap people Buffet speaks of cheap people, because they rarely tell the true. If you plan on creating wealth for you, and your family it will take a bit of team work. Whether they are co-workers, advisors, colleagues or employees you need to be able to trust them. If these trusted people give you bad advise, it could be a set back of a life time. To avoid this you only want to deal with GREAT people. Easier said, then done, but it’s necessary for success and very doable.
Posted on: Sat, 19 Oct 2013 03:33:46 +0000
Trending Topics
Recently Viewed Topics
© 2015