Wealthy Building Secrets: Time, Energy & Money
Wealthy people allocate their time, money, and energy in more efficient ways than any other people and that’s why they are wealthy. If you want to become rich and wealthy then you have to allocate your time, money, and efforts in such a manner that it can create wealth for you.
Whenever I ask people – How much time they allocate on various wealth building activities such as retirement planning, budgeting, or investment planning. I receive the common reply of “I don’t need any wealth planning exercises because I already earn high income.”
Wealthy people allocate more than 4 times the time on planning their Investments than non-wealthy people. There is a direct correlation between the time you give behind financial planning and your actual wealth.
According to several studies, people who give more time on planning their wealth building end up with more wealth than those who spend less time or do not spend any time at all for planning their wealth.
Most people struggle financially because they never spend even an hour to plan their financial goals and investments. Now, what should you do if you want to become wealthy? Well, start from one hour a day. Every day, simply give yourself one hour to plan your Investments. Gradually increase these hours.
Financial planning doesn’t mean that you sit with a sheet of paper and pencil in front of your TV and later on blame that it did nothing to your wealth. You have to allocate time to read financial magazines, books, newspapers, books, blogs, videos and anything else that can increase your financial IQ over time.
Thus, use these 3 wealth building tools in your favor to become rich and financially free.
The Secret of Becoming Wealthy
Let’s start with an example of 78 year old lady, Mrs. Merry. Merry died just 1 year before leaving her wealth of $ 10 Million. She was living on her pension money. From the first earning years of her life, she started accumulating stocks in her portfolio and never sold a single stock after that.
Her wealth doubled in just last 5 years before she died. And even after her death, the federal government did not make any money on those taxes. Do you know why? Because she transferred her wealth to charitable organizations, colleges, and churches in the form of assets.
This means that a person who owns $ 10 Million of wealth, yet the government helplessly can’t collect a single dollar of tax from that person. Isn’t it amazing? That’s because the wealth of that lady was in the form of stocks and other assets and she never sold her assets. She just bought it and kept it for years.
While, what do most of the stock traders do? Well, they don’t hold any stock for even a year and that’s why every time they sell stock, they have to pay taxes on that transaction. And government makes money.
But the smart people are those that hold stocks for decades and probably for the rest of their lives once they invest. And thus, over the time these stocks appreciate significantly without paying any tax on their appreciation.
Warren Buffet also buys businesses (Stocks) to keep them. He bought stocks of Cocal-cola, Bank of America & Several other lucrative Businesses in the 80s and he still owns these stocks today.
Realized Income versus Wealth
What is the Difference between Realized Income and Wealth?
Most of the people struggle financially because they consider their realized (Taxable) income their wealth. And that’s why most of the people around this world focus mainly on growing their Income.
Wealth is something which you accumulate and not earn right away. In fact, wealth earns money for you even while you sleep. Accumulating Assets (Stocksm Bonds, Gold, Mutual Funds, Businesses … etc …) is wealth.
The problem with considering your income as your wealth is that you have to work hard your whole life to maintain the same level of lifestyle. While the advantage of accumulating wealth is that one day when your wealth grows in significant size, it will generate passive income for you … that way you don’t have to work hard at all.
Rich people focus on accumulating wealth while everyone else focuses on increasing their income and that’s why rich are financially free and rest struggle financially and live paycheck to paycheck.
Then why do most people around the world don’t know such a basic difference between income and wealth? Well, this is because our school system doesn’t teach us these things.
Our Education system is designed in such a manner that it will give you only Vocational & Professional Education, but it will never give you or motivate you to take on Financial Education.
And because of this lack of financial education, people struggle financially. If you want to be rich, then focus on accumulating wealth and not on increasing income.