John Murphy - Lessons in Riches
Summary
- Before you kick off, do yourself a favor. Totally remove negative associations about finance or anything that is rightfully yours - you deserve endless abundance. Anything is possible now! Clear your mind, believe in yourself, get excited about what the future holds for you as an achiever. You have no limits. You have what it takes within you right now!
Lesson 1: Desire Riches
- Think of an Euro figure that, for you, means total abundance.
- Now dream in the present tense, as if you had already achieved your goal. Write it down. Use your five senses to describe how you feel, what you are doing for your self and the people around you, where you live, where you are travelling, how you are sharing your wealth and improving the lives of those that are less fortunate. Keep writing, don't make it perfect, just get it done. The more real you picture it, the more belief you will build, and the sooner it will materialize. Get creative!
- Now that you have dreamed your dream, you can reset your Euro target. If you have completed the above 'dreaming' exercise properly, that figure will be higher.
- Now think and articulate what you are prepared to do to achieve your goal. Things you might give up that will allow you to be more productive, things you must change to fulfill your destiny. You will need to commit some time to yourself each day to focus your mind, actions and capture intelligence.
- Set a specific date for attainment. You might set a number of targets: X Euros in 12 months, Y Euros in 3 years and Z Euros in 10 years. Hold yourself to these dates, this is a must!
- Develop a plan, a detailed plan to achieve your goal. Small tasks and larger tasks. Do something immediately, whether you are ready or not.
- Write a statement that describes your desired goal.
- Read the above statement daily, carry it with you, paste copies around you. When you read the statement, refer to the dreaming exercise above, visualizing your dream as if it were achieved, feel it, live it within yourself, make it feel real.
- Monitor your progress against your plan on a regular basis e.g. weekly. Celebrate your wins!
Lesson 2: Learn From The Rich
- Expand your mind about what's possible.
- Make the most of your time. Get productive, limit the unproductive times. For example, reduce the time you watch TV or surf the internet.
- Find one or more mentor(s). Mix within their network of associates, study what they study, start thinking like them. Pick a few big names you would like to emulate. Research their public information. Get together often with like-minded people (this is called Masterminding).
- Create a regular study program - morning and evening are the best times to fill you mind with the right thoughts. The subconscious mind takes in more than you think and can aid us greatly. Whether you are listening intently or not, keep feeding your subconscious mind using audio.
- Listen to audio programs of your favorite people while you are in the car and doing routine chores.
- Attend seminars regularly.
Lesson 3: Become Debt-Free
- Pay yourself first! Place some money, say 10% of your income away. This is to build up some savings but, most of all it helps you feel in control of your finances.
- Be ruthless! Commit a portion of your income, say 20% to pay off your bad debt. If you are not in debt then combine the 10% and the 20% and save 30% (also called the 10/20/70 Rule).
- Make a plan as to who, when and how much bad debt you will pay off and communicate with your creditors (people/companies you owe money) to set up a payment plan. In nearly all cases they will welcome you being so proactive. This also commits you to go through with your plan. There are companies that can help you here.
- Before you go to your creditors, obtain a credit report so that you are aware of your standing as a consumer and since your credit report is the most important historical list of your financial past and present, it's a very good idea to check it from time to time. There are companies that can help you here. If there are any discrepancies, fix them to improve your credit rating. You may be unaware of unsettled accounts, or accounts that are still open/active when they should be closed. Pay close attention to this when inspecting your report.
- Keep away from the shops - for obvious reasons. No more focus on necessities.
- Setup a budget and track your spending weekly - every single Euro you spend. You would be surprised to know how many poor people do not budget their money and how many wealthy people do!
- Use a debit card and toss your credit card out. A debit card takes funds out of your bank account immediately so that you know from each transaction where you stand. Don't just throw your credit card in the bin - have a special ceremony; cut it up, burn it and read it it's last rights!
- Keep on top of your finances. Review you situation often, make enhancements and forge ahead. Give yourself a little treat as you achieve each milestone in your plan.
Lesson 4: How To Save
- Analyze your expenses. You must find out how much you are spending in detail each month to set a realistic but stretch target for savings. Now I can't tell you how much you should spend or how to live, it is your decision. You will need to understand what you are spending with your mortgage, any car payments, gas, food, clothing, telephone, cellular, cable, Internet, schooling, entertainment, animal and pets, water, gas, electricity, insurances and other.
- Reduce expenses where your spending is excessive. Changing your spending habits can be difficult at first, depending on how long you have used inappropriate spending. A simple and very useful resource for spending/saving tips is here. You need to think carefully before selecting the expenses you are going to reduce and use in your budget. You need to consider cost/affordability versus any downside risks of changing versus the inherent benefit.
- Set your savings target. Imprint the Richest Man's 10/20/70 Rule firmly in your mind! Pay yourself first and save 10% of your income. Pay 20% of your income to pay off any debts or save the extra 20% if you have no debt. Utilize 70% of your income, to live on.
- Get multiple streams of income. Well, you have done what you can realistically with your expenses. Now you can assess whether you can develop another form of income on top of your main career salary.
- Never pay retail. Wealthy people love to save money buying wholesale. They never like to pay retail for anything. So get the best price, use ebay, auctions, buy second hand, whatever. Then save the money that you save!
- Review your spending and savings plan on a weekly basis, making enhancements where necessary. Celebrate your wins.
Lesson 5: Invest & Multiply Riches
- Research the resources for investing in your own business, Real Estate, Stock Market or (mutual) funds.
- Create an investment plan that includes amounts to invest, start dates, type of investment and an exit strategy.
- Invest. Gain experience by investing small amounts in various areas. Just start somewhere.
- Track your investments in one place. Use a spreadsheet or personal finance software.
- Setup a structure before you invest to protect your assets.
Lesson 6: Protect Your Riches
- Get advice to establish your walls of protection which will also minimize your taxes. Consult your professional advisor - be careful, choose wisely! Very few professionals know this essential information. Best to study these resources first; reduce taxes and protect your assets.
- Setup your capital structure before investing.
- Seek to know for yourself. Being wealthy requires intelligence - you must know this stuff. Don't leave it to your advisor.
- Conduct due diligence on any investment you make, do not rely on one or two sources. Minimize your risk and investigate yourself - read the prospectus, make some phone calls, ask around.
- Maintenance procedures are needed to continually check that the structure you have put in place is defendable and works with the constant changes in tax and law.
Posted on 3rd September 2007 by Quintus Hegie
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