What Is the Best Definition of a Wealth Creator?

One of the most important personal traits of a wealth creator is that they have integrity, in other words, their words and their actions go hand-in-hand. It is because of this personal trait that they can always be trusted and are trustworthy.

Unfortunately, most people say one thing and do another, that is, their words are not backed up by their actions. It is, therefore, understandable why most people are not creators of wealth. You cannot be a creator of wealth unless you have integrity.

Secondly, their relationships are built on trust and respect and therefore, their relationships are positive, good and long-lasting. This makes perfect sense, as any relationships that lack trust and respect, simply cannot last.

Thirdly, creators of wealth lead solid, stable and progressive lives. They are not living grand, high-flying lives one day, and then down-and-out on the streets the next. The main reason for this, is that wealth creators do not take risks and therefore, do not put themselves in situations where they stand the chance of losing everything.

This goes against the popular conventional belief that the higher the risk, the higher the reward. People who believe this to be true, are not creators of wealth and if they believe this to be true and are wealthy because of taking high risks, they can then be considered, to be gamblers.

Gamblers do stand a chance of becoming wealthy, however, they also stand the chance of losing all of their wealth.

Creators of wealth, on the other hand, grow their wealth.

Fourthly, creators of wealth do not create their wealth by chance, by fortune, or by luck. They each have a formula for building wealth and they simply, steadfastly, stick to the formula. Creators of wealth grow their wealth by following a successful formula that consistently provides positive results; it can, therefore, be said that wealth creators are results-driven people, that is, that they are only interested in the results.

My next point, is that wealth creators know how to build an investment or business. They have taken the time and effort to invest in themselves, so that they have the necessary knowledge and skills, in order to build a business or investment.

Lastly, wealth creators have the ability to make their money work for them – they do not have to work for their money. This is another reason, why most people aren’t wealth creators, as most people are only able to work for their money and are unable to make their money work for them.

The 40 Percent Rule

What is the 40 percent rule? Well for starters it is a game changer when it come to building wealth. I have read over 100 books on investing and personal finance. I do not recall coming across the 40 percent rule. I discovered the rule by reading The Millionaire Playbook, by Grant Cardone.

I got excited when I read it. It gives a different perspective on building wealth. An aggressive game plan to help you become a millionaire. One concept is saving to invest. Not saving to save. That’s where the 40% rule comes in. Save 40% of your gross income and put it into your “Sacred Accounts” until you are ready to invest it to create more income. Sacred accounts are accounts where you never touch the money.

40% of your income is some major cheese from your paycheck. That is a huge lifestyle change especially if you are living paycheck to paycheck and in major debt. This will leave you broke most of the time but it is how the wealthy build their wealth. This is how the wealthy stay… WEALTHY.

Rich Vs. Wealthy

There is a difference between rich and wealthy. You get rich before you get wealthy and as Chris Rock said, “The ball player is rich, the guy paying the ball player is wealthy.” Bruckminster Fuller said wealth is measured in time. How long can you not work while your assets produce income? Wealth produces more wealth and it can withstand economic downturns. Look how many people stayed wealthy during the past recession.

How to Do the 40 Percent Rule

First decide that you are going to start building wealth. It’s simple not easy. Take baby steps. I couldn’t save 40% in the beginning and I was already putting 20% of my income towards paying down my debts. So I started with 4%. That was manageable and I moved up gradually. Now it’s automatic and I don’t even miss it.

If you read The Richest Man in Babylon, by George S. Clauson, then you are familiar with, “A Part Of All You Earn Is Yours to Keep”. Saving 10% of your income and 20% to pay down your debts. Now just bump your saving up to 40%. As I mentioned earlier it is a game changer.

Sacred Accounts

Remember this is wealth building. You are saving so you can invest into income producing assets. This will take time. Use time wisely. Research investments that will produce more income streams. I chose real estate because it is not a fad and dependent on technology. People need to shop, eat, and live. Real estate takes care of that.

Emergency Fund

I suggest you have an emergency fund. Start with $1000. It is for emergencies only. Life always brings a crisis several times a year. But ever since I have had an emergency fund I haven’t had any financial emergencies. I have had this for several years. I have never had to dip into it. This is not an investment. It’s cash to take care of the unforeseen.

Your Income Increases

Stash away all of your bonuses, raises, and surges of income. Put that in your sacred accounts. You don’t want expenses rising to meet income. Continue to drive a wedge between expenses and income. Put all your increases into the sacred accounts.

Pull The Trigger

After some time you will have enough to start investing. I don’t know how long it will take you. I know my mentor saved for 8 years before he pulled the trigger. He turned that investment in to a $5 million dollar profit a couple of years later. He pulled the trigger after he felt confident and made sure he could get his money back. This isn’t gambling.

He got a great deal because he had access to cash. Money loves speed and when you are liquid you can pounce on opportunities. There are awesome deals everyday which people miss out on because they don’t have access to capital. This is why saving to invest is so important.

Just Start

Here is what you need to do now:

1. Open up your sacred accounts. (I have one for real estate and business investing). Chose accounts where you will not have immediate access to the money. Online savings accounts are great and pay a higher interest rates.

2. Decide how much you are going to save. Start with your first paycheck, commission, or any other income. Even if it is 1% that’s better than nothing. It’s easier if you have automatic deductions. That way you won’t miss it.

3. This is a lifelong activity. Keep going until you die.

How to Create and Sustain Wealth

The process of wealth creation, though not so easy, is quite simple. Anyone who simply follows the basic principles of wealth creation shall surely become wealthy.

There are four basic principles for creating and sustaining wealth. These are:

I. Giving ii. Saving iii. Investing iv. Spending wisely

It is very important that we teach our children these principles of wealth creation and sustenance. If our children start practicing them now, they will become wealthy early enough and will be able to pass those wealth creating habits onto their own offspring as well.

Any time we (or our children) get money, the first thing we must do is to give at least ten per cent of the money away. Christians call this tithe, but it is not only Christians who give a minimum of ten per cent from whatever money they get. Muslims also give Zakat while others give directly to the needy or to charity.

All creations from God must give in order to be blessed. When we give, we get great blessings. It is therefore safe to say that when we give, we give for our own sake because the word of God in the bible says,

‘Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap… (Luke 6:38)

Some people think that what they have is so little and they cannot take out of it. Some even think they are too poor to give; this is not true. In fact, the less you have, the more you need to give. Why? This is because the poorer a person is, the more the person needs blessing and blessing comes from giving.

It’s not only money that we give onto God. You can also give your time and talent in taking care of the needy. For example you can volunteer your time, talent or energy to help in a charity home. God want us to love and help people. When we take our ten per cent to our places of worship, we are giving it to God. However, God does not come down physically to take the money but His people in our places of worship (pastors, ministers, missionaries, evangelists, etc.) work to carry out God’s plan here on earth. They use the money to take care of the needy and to teach people about God’s fantastic message. They spread the word of God.

God gives us life, talents and time so that we can give our time, energy and talents to help people. For example, if you know how to draw, you can give by making posters or drawing to decorate the walls in orphanages or charity homes. Such pictures can also be given to sick children in hospitals in order to cheer them up.

How can you use your energy? You can help old people to run errands or do chores. You can also help to clean up your place of worship on Saturday when you don’t go to school.

So there, start giving and start building your wealth (smile) Let me stop here until next time when we continue to talk about the principles of wealth creation. To Your Enduring Wealth!