The very first step to building wealth is to spend less than you make.
Brian Koslow
How do you turn your dream to build wealth from scratch into definite riches?
The answer is you need to do two things:
First you need to know your net worth right now. In other words, you need to do a reality check
The second thing you need to do is start looking for the paths that will help you build wealth
But I can bet my last one-dollar on this: that you will not take this advice seriously.
Before you do the latter… I urge you to suspend your doubt for a few minutes. Then read what I am about to tell you
The greatest reason why many people fail to build wealth is: because they don’t know the true meaning of wealth.
The second reason many people fail to build wealth is that-even when they realize what it takes to build wealth…
they don’t know what steps to take in order to start building wealth
I have addressed the difference between wealth and income in the first part of this article: how to build wealth starting from scratch
If you have not read the first part of this article you can click here to read more
Let me recap from our discussion of how to build wealth starting from scratch:
When you want to build wealth from scratch you must take 4 steps:
- You must determine the annual income you need to live your dream lifestyle
- You must determine your ideal net worth you need to live your dream lifestyle
- You must do a reality check on your present net worth.-so you can know-how much wealth you need to accumulate. So you achieve your dream
- You must choose one or two proven paths to build wealth that you’ll use to amass the wealth you want.
In addition to these 4 steps …
- You should then draw up a plan to start building wealth with your chosen path and start taking massive action on them
Lets now go on to…
Step #3. Do a reality check: determine your present net worth to know your income gap
The most important step in your journey to build wealth is when you do a reality check on your present net worth
Why? Because it’s only when you know how much you are worth. That you can know how wealthy you want to be.
It’s easy for you to read all the motivational books in the world…
attend seminars on wealth …dream about driving your Ferrari down Miami’s south beach…
But if you don’t even know how much you owe… how much assets you have… you are only deceiving yourself
The best way to determine your net worth is to do a simple math of your:
- Assets… that is estimate the value of what you own (equity in your house, car, jewelry, savings, bonds, stocks and any other thing of value you have)
- Liabilities… this is the estimate of who you owe (mortgage, credit cards, personal loans, car loans, student loans, and any other person you owe money)
Then you do the math…
Assets minus liability equals net worth
For example if you have assets of $250000 and a liability of $100000 your net worth is $150000
Your net worth is $150,000. Your net worth gives you an idea of how much wealth you have to accumulate in order to achieve your ideal net worth
By doing a true valuation of your net worth you’ll know how much wealth you have to acquire.
It’s easier to focus on your journey to build wealth because… you know where you are going
The very act of writing down your net worth-allows you to do a sober assessment -of what you need to do in order-to build wealth
When you know your true net worth …you are moving from being a dreamer to a doer… which means you are ready for the next step
That is…
Step #4. You need to choose a proven path you’ll take to become wealthy
The four proven ways to build wealth are…
Investments: accumulation of shares, stocks, bonds, savings
Real estate: owning rental and commercial properties
Business: marketing products and ideas
Internet: expanding possibilities
If you look at Forbes list of the richest people …they all made their wealth from one or more these proven paths to wealth
It’s very rare for you to become wealthy working for someone else except: you get equity from your employer. In that case you are an in-house entrepreneur
The biggest reason many people fail to build wealth from any of these proven paths to wealth is
- lack of focus and also…
- People tend to want to get rich quick
The truth about getting wealth from any of the proven wealth-building path is…
That it takes hard work, tenacity and persistence to build them
So if you have a 9-5 mentality and love job security…then don’t even bother trying to choose any of them
I would advice you…keep your job and save up for retirement
These 2 steps in your journey to build wealth is crucial because it’s the gap between dreaming and fulfilling your dream to build wealth
How do you turn your dream to build wealth from scratch into definite riches?
The answer is you need to do two things:
- you need to know what your net worth is right now. That is you need to do a reality check
- The second thing you need to do is start looking for the paths that will help you build wealth
But I can bet my last one-dollar on this: that you will not take this advice seriously
I urge you to suspend your doubt for a few minutes and read what I am about to tell you
The greatest reason why many people fail to build wealth is: because they don’t know the true meaning of wealth.
The second reason many people fail to build wealth is that-even when they realize what it takes to build wealth-they don’t know what steps to take in order to start building wealth
I have addressed the difference between wealth and income in the first part of this article: how to build wealth starting from scratch
If you have not read the first part of this article you can lick here to read more
Let me recap from our discussion of how to build wealth starting from scratch:
When you want to build wealth from scratch you must take 4 steps:
- You must determine the annual income you need to live your dream lifestyle
- You must determine your ideal net worth you need to live your dream lifestyle
- You must do a reality check on your present net worth-so you can know-how much wealth you need to accumulate. So you achieve your dream
- You must choose one or two proven paths to build wealth that you’ll use to amass the wealth you want.
In addition to these 4 steps …
- You should then draw up a plan to start building wealth with your chosen path and start taking massive action on them
Lets now go on to…
Step #3. Do a reality check: determine your present net worth to know your income gap
The most important step in your journey to build wealth is when you do a reality check on your present net worth
Why? Because it’s only when you know how much you are worth that you can know how wealthy you want to be.
It’s easy for you to read all the motivational books in the world…attend seminars on wealth … dream about driving your Ferrari down Miami’s south beach
But if you don’t even know how much you owe, how much assets you have… you are only deceiving yourself
The best way to determine your net worth is to do a simple math of your:
- Assets… that is estimate the value of what you own (equity in your house, car, jewelry, savings, bonds, stocks and any other thing of value you have)
- Liabilities… this is the estimate of who you owe (mortgage, credit cards, personal loans, car loans, student loans, and any other person you owe money)
Then you do the math…
Assets minus liability equals net worth
For example if you have assets of $250000 and a liability of $100000 your net worth is $150000
Your net worth is $150,000. Your net worth gives you an idea of how much wealth you have to accumulate in order to achieve your ideal net worth
By doing a true valuation of your net worth you’ll know how much wealth you have to acquire.
It’s easier to focus on your journey to build wealth because you know where you are going
The very act of writing down your net worth-allows you to do a sober assessment -of what you need to do in order-to build wealth
When you know your true net worth …you are moving from being a dreamer to a doer… which means you are ready for the next step
That is…
Step #4. You need to choose a proven path you’ll take to become wealthy
The four proven ways to build wealth are…
Investments: accumulation of shares, stocks, bonds, savings
Real estate: owning rental and commercial properties
Business: marketing products and ideas
Internet: expanding possibilities
If you look at Forbes list of the richest people …they all made their wealth from one or more these proven paths to wealth
It’s very rare for you to become wealthy working for someone else except: you get equity from your employer. In that case you are an in-house entrepreneur
The biggest reason many people fail to build wealth from any of these paths is lack of focus and also…
People tend to want to get rich quick
The truth about getting wealth from any of the proven wealth building path is…
That it takes hard work, tenacity and persistence to build them
So if you have a 9-5 mentality and love job security…then don’t even bother trying to choose any of them
I would advice you…keep your job and save up for retirement
These 2 steps in your journey to build wealth is crucial because it’s the gap between dreaming and fulfilling your dream to build wealth