What is the actual Wealth Accumulation process? I suggest it can be summed up in 7 steps.
I’ll do a page on each of these in detail but as an introduction, here are the broad strokes. As with most things, the first step is often the most difficult.
STEP 1 This is the most “Touchy Feelie” part of the system. This step is however the absolute key to success. It is at this point where we have to evaluate ourselves, and our personality. How badly do we really want to be Financially Independent? Do we REALLY want to be wealthy? What is the WHY, for wanting Financial Independence. Is the WHY big enough to help us through the tough times, will it keep us going? Do we have the patience to wait for Financial Independence?
Can you resist the overpowering influence of ADVERTISING? The constant pressure to SPEND MONEY even if you have no money to spend! You have in your subconscious deep beliefs about all of these. Those beliefs control your actions, no mater what your conscious mind thinks.
STEP 2 We have to really understand the language of money from a PERSONAL WEALTH ACCUMULATION point of view. We need to know the real meaning of the words, not just what the bank wants us to know. It is hard to learn or understand anything if you don’t know the language. For example: LOL BFFL OMG make no sense unless you know what they represent. Many of the words used in Finance have more than one interpretation. You need to know which interpretation will help YOU.
STEP 3 Is much easier. Tracking your spending. If you use a debit card and have online banking this is very easy. It is still easy, even if you don’t use technology, you just have to do a little more writing down. Tracking your spending will tell you what you are doing right now. Because most of us don’t really know where our money goes. You can’t plan a car trip if you don’t even know where you are right now. The same applies to Finance and Wealth Accumulation.
STEP 4 Once we know where our money actually goes, and exactly how much goes there, we can formulate a realistic plan to control our Finances. I don’t like the word “Budget”, so I use the term “Cash Flow”. Which is really what it is. We need to control where our Cash Flows.
STEP 5 Is to understand how money works, and how people and financial institutions use money. This step is also quite simple, but usually quite surprising. There are a lot of Social norms that force use into what we think is normal behaviour. Behaviour that makes the banks rich but maybe not us. There is a lot of fear used to keep us in line.
STEP 6 Once we understand the language, have a plan for our Cash Flow, and know how money works, it is time to make our money work for US. No matter how small the amount, our money needs to be working as hard as possible for us. It is here where we develop the habits that will generate ever increasing returns as our wealth grows. These same habits will allow us to manage our money successfully, when our problems go from “NOT ENOUGH MONEY” to” TOO MUCH MONEY”.
STEP 7 After some patience, time, and some extra effort we will be able to harvest the money our money generates for us. This money harvest will allow us to live the life we really want to live. It is at this step that the WHY is now fulfilled.
That’s the basic outline. Not all that hard right?? It is just simple stuff that most people don’t do. I will warn you right now. Following the Steps, WILL require you to make some lifestyle changes. Some of these changes can be major. We will look at each step, in detail, on separate pages.