Why do some people attract wealth like a magnet, while others, despite what they would do, are doomed to medium income or have to live from paycheck to paycheck? The observations of the richest people in the world have been that financial success is affected as much as 80% by human beliefs and attitudes, while only 20% by the knowledge and skills about ways to earn money.
In this case, it would be a fallacy to believe that knowledge does not help any, but people do not just make money based solely on what they know.
Destructive beliefs, with respect to money, such as "no money wins" or "honest means did not earn the money", are hiding in our subconscious and prevent us from having the best chance of getting more money.
Though we often don't suspect it, we actually follow those beliefs and get the results of course, because our beliefs influence our behavior directly.
So what makes you rich? Thomas J.
Stanley has conducted a survey and interviewed 733 multimillionaires.
The survey asked respondents to list 30 factors which, in their opinion, have had the greatest impact on their achievement.
Summarizing the data, the first top five of the most important factors were as follows (in the brackets is shown the percentage of respondents who named this factor): 1.
Fair treatment of others (57%) 2.
Self-discipline (57%) 3.
Being able to make an agreement with others (56%) 4.
A spouse that understands and supports you (49%) 5.
Ability to work with more dedication than other people (47%) Some people may wonder now: "Nonsense - success depends on many different things.
You must have initial capital, rich relatives, acquaintances and it is even useful to be able to climb over other people".
If you think so,I have bad news for you! You fall into that group of people who believe that the formula for success is "To Have...
To Make...
To Be".
You may think to yourself, "If I had initial capital, influential friends, good ideas, etc.
, then I would start a business, invest, produce or patent something, etc.
and then I'd be happy (rich, successful, loved, etc.
).
But I do not have all of that, so that is why I am not what I would like to be" What is wrong here? Well, the fact is that your formula is flipped upside down.
In reality, the contrary is true: You have to be self-confident, responsible, ambitious, tenacious, etc.
at first, then do (create, grow, take risks, move on, etc.
) and eventually you'll have high performance, success, prosperity, recognition, etc.
There is one simple way to ensure your current ability to attract and retain money: 1.
In the beginning, evaluate your current capital (immovable, movable assets, cash accounts, securities) and sum up; 2.
Subtract all the existing debts (loans, leasing, etc.
) from the sum you've got; 3.
Divide the sum obtained by the number of years that you have been gainfully employed; 4.
Divide the result by 12.
The resulting number is a true representation of the average of how much money per month you have earned so far.
All of the other parts of your earnings have been shared between others (restaurants, shops, travel agencies, banks, petrol stations, etc.
).
People often complain about their lack of salary.
Do employers really pay too little? Are you familiar with the feeling or the thought that you would have more money if only they would raise your wages? However, an increase in salary is not essential and does not matter.
Why? Because most people obey the Parkinson's Law.
This law says, "Costs rise until they reach the level of income.
" The first condition for financial success is to develop the habit of constantly breaking this Parkinson's Law.
How many years have you worked as an employee? How many times during this period have they increased your salary? How closely have you approached financial freedom during that time? Or maybe you have moved away? Maybe while incomes were rising your debts were growing too? Maybe you are now squeezed as you have never been squeezed before? Maybe you are afraid "rock the boat" or to take bold steps, because you cannot afford to slash your income even briefly, because banks and leasing companies are knocking on your door? If this describes your situation, then your employers, who pay insufficiently, are not guilty.
Its only your own habits that have placed you directly into the "hamster wheel".
You must run this wheel continuously, because if the wheel stops rotating for just one second, your entire life will fall apart like a house of cards.
What is the formula for financial success? The true financial success formula is simple: spend less than you earn and invest the difference.
Also, constantly reinvest the growth of revenue.
It seems so simple, but why then are most people poor? Maybe they do not know how and where to invest wisely? Or is it because nobody has recommended to them that they save? It is not true.
We all have heard some tips on saving, but have been disappointed after trying them; another theory, which is wholly inapplicable in my practice.
Also, how can I save money if I have just enough money to attain the next salary? Regardless of how much we earn, the amount of money that remains at the end of the month demonstrates our ability to increase our capital.
In fact, this is all that we have earned and all that we've spent was earned by others.
You may disagree, but the most important value is the value of your accumulated capital minus debt.
If you feel that what you earn is "decent", but after liabilities only a little capital is left, then someone else is using your earned money successfully.
Which is of greater worth: to have a well-paid job, or create your own business? Continue to work for others or create your own business? It depends on your individual needs.
And speaking of income, there are active and passive incomes.
Active income is generated when you get paid for your time at work.
If you work, you get.
If you do not work, you do not get.
Passive income is generated when your time and effort to the work may be paid for many times.
For example, the writer wrote a book within two years.
However, the book became a bestseller and he will get income for many years for the contribution of two years.
Investing also generates passive income.
If you invest your active income wisely, it can create a passive income stream.
Your own business can provide a passive income too, but only if you will create a business system that works in the long run without your direct intervention.
Most people setting up a business just create a job for themselves.
They do not work for an employer.
They are working for their business.
Also, do not forget that 80% of small businesses go bankrupt within the first 5 years of existence.
For those who do not see long-term prospects for hired work and do not want to take great risk or do not have original business ideas, there is the ability to connect to existing business systems, such as network marketing.
This is another way, accessible to all, to create a passive income stream.
You just need to choose an organization which is reliable, has a good reputation and history of success and a good education system too, that will allow you to learn from the leaders, not from ordinary academics.
Robert Kiyosaki, the famous author of books on financial success, calls network marketing a franchise for the twenty-first century.
Why such a focus on passive income? Because they can set you free.
What does it mean to set you free? The term "freedom" has many definitions.
My favorite formula of freedom is: Freedom = time + money.
If you have enough time, but no money, you are not free to choose what you want to do and where you want to be.
If you have money but no time, you still are not free.
Financial freedom is the only way to real freedom.
Financial freedom is achieved when your passive income allows you to live your desired lifestyle.
Then you can work only if you want to.
Is that not amazing? The problem is that for most people it seems unrealistic.
This is largely because we come short of self-discipline.
In life, it seems like a self-service bistro: All those, who stand at the beginning of the line today, once stood at the end of the line.
Most people change lines too often, after only reaching the middle of the line.
They will never reach the front of the line, where the tastiest desserts are packed.
The condition for financial success is simple.
The earlier you develop habits for increasing your capital, the sooner you will enjoy the fruits of financial success.
Where to start? One of the reasons why most people do not become wealthy is that they do not have a clear definition of what is an asset for them.
That is to say, they do not have a clearly defined goal.
Admit it, it is very hard to achieve something, you do not have a clear idea about.
Therefore, you should start with your long-term goals.
What are your long-term financial goals? What kind of lifestyle do you want to live when you reach them? It is important to answer these two questions clearly, because our most powerful computer, the subconscious mind, does not understand the numbers.
It needs a clear visualization.
No wonder famous multimillionaire Donald Trump has said, "If my imagination can see it clearly, it must be possible to do it.
" Before starting to move towards long-term goals, each person should address their financial security.
Financial security is based on two things: life and disability insurance as well as the development of a "financial buffer".
What is a "financial buffer"? This is the amount of money, stored in a safe place, which is necessary to cover your essential family expenses for 6-24 months, in the event that you suddenly lose your source(s) of income.
Everyone thinks, "It will never happen to me.
", but usually it happens to those who are thinking about it minimally.
In addition, imagine how much calmer a person feels, when he knows that if it is necessary, he will have enough time to find another job, calmly, or even change careers completely.
You have to keep this money unused, and you cannot risk it.
It is not recommended that you keep these funds anywhere at home, but rather in a bank account or in a safety deposit.
Certainly, life and disability insurance is necessary too, to protect those closest to you.
That should be the first of your financial goals.
Is saving a real method to enrich one's self, if a person saves only a small part of his income? After taking care of financial security, you can make decisions about how you will increase your capital.
The first decision you need to make is what part of your income you will pay yourself? That is to say, what proportion of your income you will save every month.
But there is a problem.
How could I know how much I will retain every month? Because financial circumstances may differ from month to month and sometimes nothing is left? The answer is, when you receive a payment, pay yourself first! That means as soon as earnings falls into your account, you should deposit a part of that money, which is intended for saving, into a special savings account.
However, that is not enough, because most people are unable to resist the temptation to spend the money and their discipline is breached.
They do not pay themselves, believing that the next month they will save twice as much.
Next month history repeats itself and eventually there comes a time when people feel powerless to carry out this part of their plan.
In order to avoid this, you need to automate this process.
For example, if you receive your salary on the 10th of each month, create an automatic money transfer to your savings account on the 11th of the month.
Let's see what would happen if a 19-year-old young man would pay himself $250 US each month? He would save $3000 US each year! Please guess how much capital he will accumulate as a 65-year old, if he does not use this money until he reaches 65 years of age and if he invests the money in financial instruments, which give him an average of 10% growth a year? The answer is $1.
5 million US.
The final result is always impressive, because if you save some money every month and invest it, the compound interest will take effect.
If you are not experienced in investing, you can go to your bank and communicate with the manager of investment product marketing.
Look for a manager that will not attack you, suggesting one or another fund, without having clarified your long-term investment goals ahead of time.
A good manager should help you in preparing the personal investment strategy which is best suited to your goals and personal characteristics; such as you degree of risk tolerance.
Unfortunately, in most banks, managers behave as ordinary salespeople today.
They have a product and seek to sell it in anyway.
However, this is not a reason to avoid saving.
It is just not worth it to rush the process.
Take your time and focus your efforts on finding the right specialist; one that concentrates on your needs as the client.
To conclude: 1.
Decide what part of your income you will pay yourself.
2.
Pay yourself first of all.
Pay others after that.
3.
Automate it.
Does this mean, under most circumstances each person can gradually become rich? If everything should be put into a single sentence, I would say, most people never become rich, because they don't organize their life like a business, which must return profit at the end of each year.
We did not explore specific skill-intensive, capital-raising techniques, such as an active trade on a stock exchange, trading options or other methods.
In this article, the greatest attention was paid to beliefs and habits, for which each of us is responsible and each person can change.
After some habits change, we will increase our access to greater amounts of money.
We will also be ready for new challenges and if the student is ready, the teacher will always appear!