1 Proven Strategy to Ensure You’ll Never Be Rich
August 13, 2008 – 3:23 pmOk, I’m taking a different approach here. The internet is full of articles (few of them worth the electronic ink) telling you 10 Surefire Ways to Get Rich or 5 Avenues to Unlimited Wealth. The truth of the matter is that even the valid ones which might provide you reasonable methods will often overlook one fundamental issue and that is that becoming wealthy is actually easier than staying wealthy.
The difference between you and a wealthy person isn’t strictly how much money you make or how many cars or villas you own. You could own 3 houses around the world and still be essentially cash poor. I don’t know about you, but when I think about being rich, I don’t think about the house I own. I think about the ability to go anywhere and buy just about anything when I want to without having to mortgage a piece of property. It’s about cash flow. It’s about having money handy. It’s about financial freedom and flexibility. The houses and cars are all just icing on the cake.
If you want to be self employed and get rich doing it, you need to consider more than just how you’ll make money. That means thinking about what can keep you from your goals. Here’s One Proven Strategy to Ensure You’ll Never Be Rich.
- Fail to manage your personal debt.
That’s it. It’s a short list so that leaves me room to elaborate.
If a room half full of poor people and half full of rich people were to swap financial positions, it would be just a matter of years before most of them were right back where they started. The poor would be cash-strapped again and the rich would be bathing in $20 bills after a rough day playing golf. Consistent financial independence is only partially about income. Far more important is outflow.
A million dollar a year income isn’t going to do you a bit of good if you’re also floating a million dollar a year debt. It’s why the VAST majority of Americans remain financially challenged despite landing one higher paying job after another. Their spending habits rise in lockstep with their earnings.
Is there ever a point where the income so far outstrips outflow that the balance shifts in favor of growth? Perhaps. But there are plenty formerly rich lottery winners out there who make my point for me. Despite tremendous financial windfalls which FAR outstripped their previous debt, many find themselves right back where they started in a sickeningly short time, struggling to find pennies to rub together.
Before you do anything at all to build wealth or start your own business it is absolutely fundamentally positively ESSENTIAL that you prove you can manage your personal finances first. Without the discipline to do that much you can practically guarantee your business or wealth building endeavors will fail. After all, if you can’t apply sound debt management principles to your personal life, how could you reasonably expect to do so in your business life?
Check back soon for something a little more concrete to help you avoid this one major hurdle and get you on track for a financially secure life that’s ripe for growth.
Stumble it!
4 Responses to “1 Proven Strategy to Ensure You’ll Never Be Rich”
They say, “It’s not how much you make, it’s how much you (manage to) save.”
You have hit the nail on its head with this one and I hope others will realize that early as it’s pretty inevitable in most cases.
Yan
By Blog for Beginners on Aug 15, 2008
Thanks, Yan. Though I’ve learnt this seemingly obvious lesson for myself (the hard way) it pains me to see so many good friends still struggle with it. They get a higher paying job, work hard, buy more useless toys, their debt catches up and pretty soon they find themselves right back where they were… cash poor and in need of yet another higher paying job.
By Dave on Aug 19, 2008