Browsing Tag

Wealth

General

What Would You Do For A Million Dollars?

If you are ever bored and looking for something to do, I find that Google searching a random topic can be quite entertaining. For instance, the other day I decided to search “weird facts about money” and I thought I would share some of my findings with you.

One article I came across quoted some very bizarre statistics about what people would be willing to do for ten million bucks. According to the article, most people would be willing to change their race or gender, as well as abandon their family and friends for anything from three million to ten million dollars, but they wouldn’t be willing to do so for a mere two million.

September 18, 2010

Book Reviews

Get Wired For Wealth – The Recession Proof Money Makeover

Wired For Wealth: Change the Money Mindsets That Keep You Trapped and Unleash Your Wealth Potential by Brad Klontz, PSY.D., Ted Klontz, PH.D., & Rick Kahler, CFP.

Wired for Wealth is a book that will make you think hard about your beliefs about money, and it will help you to confront any unhealthy beliefs that are detrimental to your financial goals. The main idea in the book is that we all have money scripts, whether we are aware of them or not, and many of them have been passed down to us from our families. If left unchecked, these money scripts can create problems and prevent us from reaching our potential.

In order for us to develop positive money scripts, we need to be honest with ourselves about what we really believe about money.

The book is full of real-life stories of people whose money scripts passed down from their families significantly impacted their own behaviors, and ultimately their entire life direction. The interesting thing is that most people are not even aware of their money scripts, but it’s essential to become aware of them in order to promote positive change.

February 13, 2010

Wealth

Ways To Increase Your Net Worth

What is your net worth?

To put it simply, if you were to sell everything you owned and pay off all your debts, the amount that you would be left with is your net worth. Purchasing assets and paying off debts are both ways you can increase your net worth.

Purchasing Assets

Not everything you purchase will help you build your net worth. For example, purchasing a new car doesn’t increase your net worth as it quickly depreciates in value. You may have paid $20,000 for it but within a year or two it could be worth four to five thousand dollars less.

If you want to build your net worth, you will need to purchase assets that will ultimately increase in value over time such as works of art, rare coins, handmade Persian rugs, etc. Investing in real estate is another way to build up your net worth, even if you do need to take on more debt in order to do so.

Paying Off Debts

Another way to build your net worth is to pay off your debts including car loans, student loans, credit cards, and your mortgage. It’s always best to pay off high interest debt first, as well as debt where the interest is not tax deductible.

February 1, 2010

Wealth

How To Measure Wealth?

“I will be rich if I strike the top prize in this week’s lottery!” That seems to be the most usual exclamation from fellow workers looking for a quick way to escape the rat race.

Thinking back, is wealth really measured by how much money you have in the bank?

A lot of us usually think that wealth is signified by the possession of a lot of money or owning a lot of luxurious items. We have often associated wealthy people with the luxurious house, big car, expensive jewelry they owned or the posh restaurant, which they dine in, etc.

For Robert Kiyosaki however, the concept of wealth is defined simply as “The number of days you can survive going forward if you stop working today”. It is not measured in dollars and cents, but by the number of days, which you do not have to work! It is not your conventional definition, which you might have expected but I must say that this is very logical and common sense!

Based on my understanding of Robert Kiyosaki’s definition of wealth and the concept of income and expenses, I see the amount of money one has, formed just part of the wealth equation. We also need to look at the other part of the equation, which is the outflow of money, i.e., expenses. The number of days we can survive if we don’t work is dependent on the amount of money we have and the amount we spend.

August 15, 2009

Wealth

How To Build Wealth

Building wealth has very little to do with how much you earn, and a whole lot to do with how you manage the money that you earn. People with six figure incomes can be living from paycheck to paycheck while people with modest incomes can be accumulating a great deal of wealth. Here are some behaviors that will help you to accumulate wealth:

1. Pay as little tax as possible by taking advantage of the tax breaks and tax rules.

2. If you have difficulty saving, think of creative ways to eliminate wasteful expenditures. The key is to always spend less than you earn.

3. If you get a raise, bonus, or a large tax refund, don’t spend it just because you have it. Instead, save it and invest it wisely. You don’t have to increase your expenditures just because you suddenly earn more money. Most millionaires live well below their means, driving older vehicles and living in modest homes.

4. Make contributions to tax deferred retirement plans so you can get some of your money back. Use that money to pay off a chunk of your mortgage or other debt.

5. Credit can either be used to set you back financially or it can be used to help you build wealth. Rather than racking up credit card debt to purchase consumer items (bad debt), use debt to finance an investment in real estate (good debt). It’s important to be mindful of the difference between good and bad debt. Good debt is debt used to purchase assets that can generate cash flow. Bad debt is used to purchase liabilities such as furniture that will depreciate in value.

April 22, 2009

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