Wealth Creation

So, how wealthy are you?

Wikipedia defines Wealth as:

"An individual who is wealthy, affluent, or rich is someone who has accumulated substantial wealth relative to others in their society or reference group"

For my opinion, wealth is not about material possession, is about net worth. A person can appear wealthy but his/her debt is more than his/her assets.

In another words, wealth is the number of days a person able to maintain his/her lifestyle without having to work. If you able to build your passive/residue income to be more than your expenses, you are consider wealthy even though your net worth is low.

Creating wealth is more an art than a science, and there's no one way to achieve your goals. It takes creativity, hard work, a certain amount of luck and a commitment to your financial plan. The biggest mistake people make as they earn more money is to spend more, too - manage your money with savings and investments, and acquire annuities that will assure you have a comfortable life in your golden years.

SO WHAT ARE THE KEY AREAS FOR A LASTING WEALTH?

A commitment to building up your savings is the foundation of any financial plan. The conventional wisdom says to pay yourself first - even if it's just 5 percent of your income, take it off the top before you do anything else. There are always other things to use your money for, and if you don't make savings your top priority, you're unlikely to save at all. Make it a priority today...Read more!

This is the utmost important steps in order to build wealth surely and steadily over a period of time. How? Purely thru the power of compounding returns. That's how rich people get richer. They do not try to turn $1 into $10 dollar, which expose themselves into too much risk. What they do is to achieve 20%-30% annual growth every year. What will a 10,000 turn into in 5 years if monthly return is 3%? The point I want to bring across here is learn how to generate a 2%-3% ROI every month and once you able to do that you will be able to produce more capital for other investment opportunity such as real estate

The key to financial freedom is to achieve regular cash flow that exceeds your expenses, and that will also grow over time to continue doing so.

The best way that I know of to generate regular cash flow from a portfolio -- a way that can indeed be life-changing -- is to write (meaning sell) reasonable option contracts on good stocks, futures, ETF or index for cash, month after month. Writing an option for cash is basically selling another investor insurance on their stock/futures, and usually, done right, insurance policies expire to the writer's favor. "Usually" can mean 80% of the time or better, you will make and keep cash flow by selling options, month after month.

Cash flow is king
Regular cash flow for life can make every difference in the world to your investment success. Regular cash flow was a huge factor in Warren Buffett's success, and continues to be. He always has, and does, aim for cash flow from his assets.

Take Action
Do you want to start working toward greater financial freedom? It may be closer than you think. As Robert Kiyosaki said, financial education is utmost important in order to be successful in the investment world. Take action now. Attend seminars, read books, search online for info and once you get the hang of it, u got to put it to work. Planning without action equals to nothing. You do not need to start with real money, you can paper trade first and learn from your failures. Never give up. Belief in yourself. Dream big. Take small steps.

Putting some of your money into real estate will provide consistent cash flow, particularly if you own income property like an apartment building or rental homes. You don't have to make huge investments in property, just carefully chosen ones...Read more!

Whether it's your own business or someone else's, putting money into a business is good for the economy and good for your portfolio.

This is where a good accountant comes in - they can help you figure out ways to lower your tax burden by setting limited liability partnerships or helping you incorporate, private annuities, deferments and other strategies. The less you pay in taxes, the more you have to invest.

Some of this overlaps with tax minimization, with limited partnerships, insurance policies and other strategies helping you avoid paying too many taxes while keeping your money safe. As you acquire more and more money, you'll want good advice from an accountant or investment counselor - you may even want to invest in off-shore interests for the tax breaks.

Make sure that you're prepared for the future by having a solid strategy for your retirement funds. You can invest in a single fun and just let it grow for the next 30 years, or break your investments up into a collection of different funds. Either way, you may make the decisions about how to invest yourself or seek advice from a professional, who can help you choose stable funds for long-term growth.