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The Formula for Creating Wealth (At Home)



The Formula for Creating Wealth At Home

The Formula for Poverty:
receive linear income money (from welfare and jobs) and spend it all on expenses and "stuff" that has little or no asset value.

The Formula for being Middle-Class:
receive linear income money (from jobs, welfare and traditional small business). Then spend it on expenses and on items that you can’t truly afford. This means you borrow money to pay the balance and thereby go into debt. These debt-creating items are termed "liabilities". They create a drain on your income. Such liabilities include getting a bigger mortgage and borrowing money to travel or to buy a new car and other flash toys that you can’t pay for in cash. People in this bracket may appear wealthy on the surface but are actually far from it.

The Formula for Wealth:
Invest your income in assets. Through assets your money works to create more income for you long-term. Assets include businesses that produce residual income, royalties from intellectual copyright, stock market shares and rental income from real estate. You achieve the state of financial freedom when the income from your assets covers your expenses.

To become wealthy avoid liabilities; avoid the bad debt that drains your income. Initially, people in this wealthy bracket may not appear wealthy on the surface. They know that being obsessed with the outward appearances of having flash cars, houses and toys creates long-term bad debt; a prison that is hard to escape from. Instead, wealth-minded people re-invest their money in income-producing assets. Eventually, they can afford all the toys and stuff they want without going into the bad debt that middle-class-minded people get into.


The Formula for Creating Wealth At Home

The Formula for Creating Wealth At Home

Categories : Finance    Themes : Investing Financial Independence
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