This is the “Dog Ate My Homework” edition 🙂
I’ve been burning the candle at both ends lately, what with my job winding down (amazingly, it winds up before it winds down, having to train my replacements), a big vacation planned for August (while I still have money, a car, and a house — hehe), and 2 kids that are growing up way too fast…
So, like any good student (of life), when the chips are down, you missed your assignment, you’re in danger of failing an exam —
Actually, this week, I’m taking a pass. We’ve been talking about how to build wealth, how to brainstorm business ideas, and how to get started.
We’ll pick up on that next time around.
This week, I want to direct you to a post that one of my fellow Personal Finance bloggers, Lazy Man, wrote, entitled, “Wealth Creation: Is it a Myth?“
He postulates that wealth creation is a zero-sum game: Any time I make a dollar, somebody loses a dollar; thus, it’s a zero-sum game.
It’s an interesting concept. His post got a lot of people talking. Make sure you read the Comments for my take on the question, where I give the “functional” reason that wealth-creation is NOT a zero-sum game (Lazy Man mentioned it briefly in his post) — but absent banks, there may in fact be no wealth creation.
Check it out. Tell me what you think in the comments here.
Last week, we talked about getting the proper mindset for building wealth. As you may recall, you can have everything: All the tools, money, advertising, etc. and still fail. It may be due to a mindset that isn’t quite right.
And it doesn’t mean that you have a bad attitude. It may be that your past experiences have set your expectations for yourself too low. If you don’t aim high, you may not hit your target. The world can be your oyster. If you make it so.
Today, we’re going to talk about how to parlay your interests into a wealth-building activity. There are many ways to build wealth: Real estate, investing in stocks or other securities, becoming an executive in a company that grows, etc.
But by far, what is within reach of most of us (i.e., YOU) is starting your own business. A popular approach is to take something you really like, something with which you are really, REALLY passionate about and find an angle that makes money from it. Here are some questions to get the creative juices flowing:
These are just a few questions that you could ask yourself to find out what kind of business you could start to begin your wealth-building empire. The how comes later.
Now, of course, there are many different methods and media in which to run your own small (no, BIG) business: Traditional “brick and mortar,” online, multi-level marketing, agent (as in Real Estate), or a service business (like running errands for the elderly or really busy). I suggest that you begin with the online aspect because the start-up costs are extremely low (in many cases, you can start a business for free), the barriers to entry are nil (online, you can look as big and BE as big as Amazon; nobody has to know you’re running your website out of your garage or spare bedroom), and the chances for success without killing yourself are pretty high.
Plus, virtually any business can be run from the web — even service businesses. Just target local consumers and you can build a thriving business in no time, selling services or products (or both — this is where you can differentiate yourself from your competition).
Advertising costs are low, as is setting up a database of customers and potential customers for future promotions that you might have (call them “leads” or “prospects”).
In short, virtually everything a business can do can be easily done online.
As your website grows, so too can your enterprise. Start a small website, branch out into a small office, then a second physical store, etc. The possibilities are endless!
One thing I’ll caution you on right now: Don’t get caught up in the technical aspects or let your fear of technology stop you from getting started. In subsequent weeks, I’ll show you how to do some of the technical stuff, but it won’t get very complicated at all. 10 years ago — even 5 years ago — you needed a lot of expertise to set up and run a successful online business. You can start one now with virtually zero technical know-how and very little money and time.
But I’m getting ahead of where we need to be right now.
So you asked yourself the questions above and arrived at a list of answers (you wrote them down, I know). Now, think like a customer: What do I want? Am I seeking information, product recommendations, or solutions to problems? How can YOU help me? Can you provide me information? Recommendations? Solutions?
If you can answer these questions, then you may well be on your way to creating a lucrative business for yourself, one that provides you the income you need and the wealth you desire.
Next week, we’ll brainstorm some more and define a concept for your business.
I am basing a lot of this introductory wealth-building information on what’s in this Action Guide, which, by the way, you can consider the “fast-track” to this first set of WBW posts. In other words, if you don’t want to wait for each week’s posts, you can just read the whole guide and go from there.
Welcome to the first (of many, hopefully) Wealth-Building Wednesdays, where I try to offer you suggestions on how to build wealth. This would seem to be a departure from the many other fine personal finance blogs that devote a lot of their time and space to teaching you how to save money, be more frugal, and live beneath your means.
I, and a few others like 7 Million in 7 Years, focus, instead, on earning beyond your living.
Of course, taken to extremes, both points of focus can get you in trouble. On the one hand, you will have a really unsatisfying life; on the other, you may tend to forget about controlling your expenses and find yourself no better off with a LOT more income, but also with tremendous debt and expenses and a lifestyle that you may not even want.
Nevertheless, we’ll concentrate here in this special feature on building wealth from the income side. After all, income potential is virtually unlimited while expense savings are finite.
Plus, it’s my site and I’ll approach this topic how I want!
To be successful at anything, the most important thing you have to master is your mindset. Simply put, attitude is everything. You can have all the talent in the world, tools at your ready disposable, adequate funds, and everything else, and yet, you still could fail.
That’s how life works.
Not only do you have to work smart, you have to work hard. Look at nearly anybody you deem “successful.” They all “got there” through working smart, employing experts when necessary, using appropriate tools and resources, but there’s another critical thing they mastered:
Perseverance. “Sticktoitiveness.” Dedication. Burning the candle at both ends. Hard work is an acquired skill that you learn by practice.
This hard work is your front-end payment to a potential big payoff months, years, even decades later.
Even “overnight sensations” worked tirelessly for years, in most cases, to “make it” overnight!
Now that we got that out of the way…in case you missed it, it’s not good enough to work smart or hard. You have to work smart and hard.
Here’s a link to a book that might change the way you look at things. It’s called MindMap to Riches. It’s all about what I’m talking about here; it’s just a lot more detailed and lengthy in its description. By no means can I cover the how to part of creating a positive mindset in this relatively short post.
Suffice it to say it’s passion, hard work, being smart, making a plan, acting on the plan, and making corrections all along the way. Leave a component out and you may not make much progress, but put them all together and you’ve got a winning combination.
Only YOU can determine what success is. We’ve limited our scope here to say that success, in this context, is increasing your wealth.
What is wealth? From a personal finance perspective, it’s pretty simple:
Assets – Liabilities = Net Worth
The key to increasing wealth is limiting your liabilities to a manageable level while increasing your income-producing assets. As long as you can do that, you’re well on your way to amassing great wealth.
The pillars of a wealth-building system that we’ve described here are usually hard assets like your house, cars, precious metals, plus paper such as cash, money in the bank, stocks, and bonds. A vital component is a wealth-preservation instrument like liability and life insurance in case life throws you a knuckleball.
But the most valuable asset in your portfolio is YOU. You should think of yourself as an income-producing asset, striving always to become more productive through continuing education and training of the mind, body, and soul.
You are the ONLY one you can truly count on. Gone are the days of working for a company for 30 years, collecting your going-away gold watch and a nice little pension. Especially in light of the current state of the economy, you can be sure those days are gone — if not forever — for a very long time indeed.
If you’ve been here before, you know that I am a firm believer in running your own business. It’s difficult, but the rewards are usually worth it. The greatest benefit to me, however, is the idea that I am not relying on anybody else for gainful employment.
If I want more money, I go out and get it
I am not limited by my boss or a 40-hour workweek.
However, I know jumping ship on your career, no matter how tenuous the concept is nowadays, is not feasible for most people. This is where the smart work comes in. Keep your “day job” and do all your “own” business after hours. Of course, staying up late at night eventually becomes hard work, but you have to devise a plan to manage your time and health.
There are too many opportunities to mention that have potential for solid earnings. Private Label Rights publishing, ecommerce sites, ringtones, affiiate marketing, credit counseling and/or debt management companies — all of these have HUGE potential. Probably always will.
We’ll tackle some of these methods later in the series. For now, just find out what you can about setting your mental ship afloat. Determine what you’re good at, what interests you, what you’re passionate about! Get your head on straight and set yourself up for success!
I’m going to begin a new featured post that I’m tentatively calling “Wealth-building Wednesday.” The idea here is to bring you ideas, strategies, and plans for building your wealth, or net worth, as the case may be.
Look for the first installment on June 24, 2009. Mark your calendar!
Become a Money Hacks subscriber, and I might just give you an advance look before anybody else gets a chance. It may be in the form of a password-protected post; I’m not sure just yet.