This article outlines the wealth building principles that can be used to create financial security.
You can start on the road to financial security by following a few basic principles.
These concepts have been utilised extensively by those who have already created enormous wealth.
Use the power of Compounding Interest/Growth.
· Compounding interest was described by John D. Rockerfeller as the “Eighth Wonder of the World”.
· It has the power to exponentially increase your investments.
· Compounding is also referred to as “Rate and Time” as the longer an investment is left to compound, and the higher the rate, to more effective it is.
Use the tried and true method of investing in residential real estate.
· Over 98% of the world’s millionaires have made their money through property.
· Everyone needs a place to live so it can never go out of fashion.
· As the population increases, so does the need for housing.
· Supply and demand therefore will ensure that prices keep rising.
· Banks consider property to be one of the most secure investments.
· Because they are secure, banks will loan you a high percentage of the value.
Using Other Peoples Money or Gearing is a tool used extensively by the wealthy.
· Gearing allows you to borrow a great percentage of the value of a property.
· Your own invested funds will allow you to control an investment of a much higher price.
· Controlling assets of a higher value, means that compounding growth has more to work on, and therefore your net worth will increase much quicker.
· Gearing allows you to build an investment portfolio more quickly than would otherwise be possible.
Other important traits that can be developed and are very useful:
Learn to Set Goals
· Setting Goals helps you to focus your energy on developing workable strategies.
· Setting long term goals helps you look at the big picture.
· Once you can see the big picture, you can develop small sub goals.
· Sub goals are small simple goals, that can be followed one step at a time.
· When you progressively achieve your sub goals, you will get closer and closer to your major goals.
· Goals are simply plans to succeed.
· It is said that if you “Fail to plan, then you plan to fail”.
· Many self made millionaires are extremely goal orientated.
· Goals help you keep motivated.
· Progressively achieving your goals can lead to a wonderful feeling of fulfilment.
Do your research so you can find out as much information about investing as you can.
· Read investment books.
· Read the auto biographies of successful people.
· Speak to people who have succeeded in doing what it is you want to do.
· The more you learn the easier it becomes to recognise a good investment.
Learn how to Budget.
· Budgeting does not have to be tedious.
· All you need to do is to work out:
o What your incomings are.
o What your regular outgoings are.
o Make sure that all of your other expenditure is less than the amount remaining. This will allow you to start saving and investing.
o Budgeting puts you in control of your finances.
Learn about investing – in particular about property investing, as that has provided almost 98% of the world’s millionaires with the basis for their fortunes.
Learn how compounding interest works, and why it is your best friend when it comes to creating wealth.
Learn to research the property market, so that you will be able to purchase properties that will not only give a good rental yield, but they will also return the best capital growth possible.
Find out about Negative, Neutral and Positive gearing – and why gearing is an invaluable tool, which will enable you to build up a wealth base in accelerated time, compared to if you only invested your own hard earned dollars.
Once you have educated yourself and understand why investing in property is such a powerful tool, you will be able to embark on the road to financial security.
In Australia, and many other countries less than 5% of the population reach retirement able to support themselves without government or family assistance. If you want to be one of them, then now is the best time to start striving toward financial security.
How to Research and Purchase Investment Properties.
Non-Books (short e-books) written by this author available at www.non-books.com
Non-Book – How to use Investment Property to Create Wealth for Retirement.
Non-Book – Collecting Houses for Retirement.
Non-Book – How to Successfully Set and Implement Goals.
Non-Book – How to Create and Implement a Workable Budget.
Non-Book – Understanding an Utilising the Power of Compounding Interest.
Other works by this author coming soon:
Book – How to Create the Foundation for Financial Security through Property Investment.