Wednesday, September 16, 2009

One millionaire’s advice on attaining wealth

These are quotes from an individual who did not make a lot of money, yet understood the basic principles of attaining wealth. Wealth is not accumulated by what you do, but it is accumulated by what you are. It is a state of mind where the natural consequence tends to be wealth as you define it. This is different for each individual, therefore I will not provide a static definition. Therefore, if you have goals to achieve a desired level of wealth, then the simple solution is to be that which you strive for. Once you become that, then you will ultimately bring all that you want into your life. Opportunities will begin to present themselves to you, you will come across financial information that are aligned to your goals, people will come into your life to help you…it is great how this works.

These are the quotes from one of our blogging relatives…FreeMoneyFinance

  • “The real secret is to spend less than you earn. I don’t care how much you earn, you spend less than you earn. Spend less than you earn. This is true whether you’re on welfare or a millionaire.”
    The idea here is presented by most personal finance professionals; a very simple and fundamental formula. The opposite to this leads to leverage. Avoid leverage at all costs.
  • “No smoking or alcohol consumption. This has nothing to do with morals and health – okay, maybe health – it’s all about the money.”
    This refers to expensive habits.
  • “No-load mutual funds are the only way to go. To give anybody 3-4% of your money off the top is insane.”
    No-load mutual funds are funds where you do not have to pay the managers commission up front when purchasing. I agree, this is the way to go. There are many no-load mutual funds that are also low cost (very low expense ratio). See Vanguard to begin with.
  • “Volunteer to help others.”
    Giving is always useful. I wrote an article a while ago on the benefits of charitable giving as it pertains to wealth. See Wealth and Charitable Giving.
  • “I can buy whatever I want. Not need, but want. I just don’t want very much.”
    When you don’t want very much, you do not have a desire for a lot of material possessions. This allows you to retain a lot of your wealth. This is a great mindset to develop. Focus on what you need, not want. When you do so, everything becomes available to you, because you desire nothing.
  • “Wealth is created by investing money, not by working longer and harder.”
    Invest now. There is no point to wait. Your money should be working for you; it should not only be the other way around. Each year you wait reduces the amount of money you can earn through the power of compounding over time.

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