Wealth Creation: 10 Steps To Financial Freedom

From my research and study in the topic of building wealth, I have distilled all formulas and guidelines into 10 important principles. If you follow these simple principles and always think outside the box, you will be on the right path to achieve financial success and wealth that will last you a lifetime.

  1. CREATE & VISUALIZE YOUR GOALS: They will always lead to wealth creation. Set a particular goal and visualize it every day. In setting your goals, you should always be sure they are categorical, quantifiable, realizable, pragmatic and time bound.
  2. DO YOUR HOMEWORK: Never jump into any business venture, irrespective of how attractive it may look. This could set you up for failure and disappointment. The more interesting the business opportunity, the closer you ought to be in examining their claims on returns on investments.(ROI) As a budding entrepreneur it’s important to test each business opportunity before you invest a significant amount of time and/or money.
  3. IDENTIFY A PROBLEM & FIND A SOLUTION: This is the key to creating sales and cash flow for your business. Be determined enough to stick with it and don’t quit. Everyone is consistently attempting to find solutions to their problems. If you can offer them a quality product and an excellent value, then the world is your oyster. People are willing to open their wallets to those who can offer an easier and better life to them. One thing you must remember is that there are always problems waiting to be solved.
  4. THINK BIG & KICK ASS: The one thing that starts from the top and grows down is the grave. Otherwise, everything else in life starts small and grows up. When you grow up, you stay up, but when you jump up, you come down. Naturally, common-sense tells you that when you jump up, the force of gravity simply pulls you down. There’s such a lot to be learned at the start of your business. It will be small, but you will be dreaming big! So as you have a giant vision to grow, your business will grow too! Remember the proverb… “To Think Is To Create”Keep your vision, create a mission statement and share them with everyone you hire. With this you will all have a common goal to work toward each and every day.
  5. USE EARNED CAPITAL TO GROW YOUR BUSINESS: As you grow your business, remember to always use capital from your profits. Growing a business on borrowed capital is a very big risk indeed. You must be prepared to dance to the music when it starts to play. If you position the growth of your business, without acquiring debt, it will allow you to work harder and ensure you make the cash and merit the growth.
  6. CHOOSE THE RIGHT PEOPLE TO WORK WITH: You need to be careful in picking the people you’re going to work with in the business. If you truly want to grow your company, it is vitally important to choose people that are suited to the tasks that you assign to them. For example, you wouldn’t hire a heavy machine operator to run your sales department, right? A great deal of time and money could be lost by attempting to put a square peg in a round hole.
  7. USE FISCAL LEVERAGING: When your business starts to grow, it will be reflective of your business income. The entire essential nature of beginning a business is to develop a consistent, foreseeable source of cash flow above cost and expenses. The bank will lend your business money based on the amount of cash flow it produces each month or year. So make sure that you keep the cash flowing even during slow economic periods. This may take some “thinking outside the box”, but that is what being an entrepreneur is all about.
  8. THINK OUTSIDE THE BOX:There will always be competition in any market you choose to enter. It is important to brand your business so you stand out from the others. When branding your business be sure to always be thinking outside the box. Come up with ideas that haven’t been used before and you will surely get noticed.
  9. DON’T STOP LEARNING: Read, Read, Read… Always be learning about your product or niche, your target market, and how the economy may effect your business. It is important to always be attempting to stay one step ahead of your competition. Continuous learning will allow you the flexibility to make changes in the business when necessary to stay on the top of your game.
  10. LEARN FROM A MENTOR: It is much easier to achieve financial success by following in the footsteps of someone that has already been in your shoes and has reached the pinnacle that you envision for yourself. Find a mentor that you feel a connection with and has reached the level of success that you are striving for. Then listen to their every word. They will teach you the steps necessary to reach your financial goals and dreams. Remember that everyone that has reached financial success as an entrepreneur has followed in the footsteps of another.

The Compound Effect by Darren Hardy – Book Review

Synopsis of Content:

Darren Hardy, successful businessman, public speaker and editor of Success Magazine provides in The Compound Effect a careful study of those things we must do and those we must avoid to be successful. He teaches how small efforts, repeated over time, create compound effects – that is – they build into a much larger accomplishment than one might realize as one does the small things each day.

Likewise the compound effect also works to defeat us if we fail to do the right things each day or do the wrong things each day. That one candy bar once a week for example, adds pounds to us over the course of a year. That one apple each day can help foster greater health over time.

How It Works

Hardy begins by describing how the compound effect works both to our benefit and our detriment and demonstrates how crucial it is to be aware of what we are doing and take control of the things that matter. It is about forming and sustaining good habits and defeating bad ones.

He then explains how the choices we make each day influence and drives our outcomes. He describes how positive habits build us up and create long term achievement while bad habits do the opposite.

Momentum

Next he discusses momentum – how small steps taking deliberately and consistently over time build momentum which then makes it all easier and more effective over time. He explains the power of rhythm and consistency in what we do.

Influence

Finally he discusses the power of influence upon us, both good and bad, from the people with whom we associate, the things we choose to do, the way we spend our time, etc.

The book also includes various resources that you can obtain access to on-line which can deepen your experience and put the lessons learned into practice.

Some have criticized The Compound Effect as just another version of the same old ideas found in a thousand success or self-help books. In a sense this is true and Hardy, who is an unapologetic fan of Jim Rohn, cites Rohn’s observation that the principles of success are never new – they are time tested and ancient. We fail to benefit from them to the extent we fail to understand them or more often to the extent we fail to heed them.

What Hardy does in this book is repackage these ancient ideas in a more modern discussion and format using helpful illustrations and his own unique perspective about how they have worked for him and many others. There is always value in this. The more we can see how others have learned from these principles and applied them the more we will understand how we can do the same.

Hardy was raised in a very disciplined manner by a rather harsh father who was a no nonsense sports coach. With this background he naturally is comfortable with the kinds of self-discipline he urges upon the reader to achieve at a higher level. For those who are lazy or just dislike the rigor of self-discipline this book may not offer much. For anyone who is willing to do the work this book is an excellent introduction into what works.

Usefulness:

Anyone who is serious about improving their lives and their outcomes can benefit from this book. It is an easy read and contains a lot of practical lessons on how to implement these ideas.

Readability/Writing Quality:

The book is well written and easy to read. It is well organized and contains enough repetition to be instructive but not so much as to be redundant.

Notes on Author:

Darren Hardy was a self-made millionaire at a young age and successful in business for many years before moving into the success industry. He is an author, speaker, mentor and editor of Success magazine.

Three Great Ideas You Can Use:

1. A great tool to determine how well or how poorly you are actually doing in any area of your life is tracking. By keeping a small notebook with you at all times and writing down what you are doing or failing to do in any area you wish to improve you will gain tremendous insight into your own success and failure.

2. You cannot change your life or improve your life unless and until you accept complete and unconditional responsibility for your own life. This sounds simple, and it is, but it is not always easy. It is however essential to make genuine progress.

3. One of the biggest secrets to success is to eliminate bad habits and replace them with good ones. This requires intentional planning and requires disciplined action for at least a month, often longer. It will be worth the effort.

Publication Information:

The Compound Effect by Darren Hardy. Copyright 2010 by Success Media; published by Vanguard Press.

Turning $12 an Hour Into $500,000

With all of the financial advice available now it is easy to get confused. Credit card reduction companies and different investment strategies that are sometimes scams. They often prey on the financial ignorance of a population obsessed with consumption but hate to budget and save. Black people according to Nielson read more financial magazines 28% more than any other group, but lag behind in wealth and resources as a group.

In terms of wealth, meaning home value, what you earn after all bills are paid, retirement account, emergency savings and stocks and other holdings the black and white disparity is overwhelming! According to the Washington Post, in stocks, bonds and other holdings whites have $180,000, blacks have $1,100. We could get into all of the stats and disparities but today I would rather focus on the potential.

Having the proper mindset to develop wealth is the starting point. Understanding that wealth is a gradual process based on practical economic decisions where compounded interest expand your reach and lifestyle decisions protect you from outside conditions. You should already know that my first rule is to live below your means, if possible way below. This must be repeated and emphasized as simple as it sounds because of the constant need to live large or keep up with the Jones’ in American society.

The next question is after living below your means which would allow you to create an emergency savings, what do I do with my surplus cash? Any person building wealth should always be looking for ways to make their money work for them. You may want to invest in your own business or a family members business. You may want to invest in real estate. We just cited the disparity in stock holdings. Don’t be afraid to jump in. Do your research thoroughly but take action. You can invest in the companies that you already spend money with that you like. Look to see if they have drip accounts. A drip account allows you to invest in stock shares with as little as $25.

I have to bring it back to a story that I read about 3 years ago. Mr. Earl Crowly worked as a parking lot attendant for 40 years never making more than $12 an hour but managed to accumulate a stock portfolio worth $500,000 using drip accounts! This was his wealth strategy! You could use it for yourself and add other strategies with this. Mr. Crawley has no credit card debt and I believe his home is paid for. Although not quite a millionaire at the time of the report he probably is now. If not, it does not matter because he has laid a wealth foundation and strategy for his children to follow from only $12 an hour! Mr. Crowley is the perfect example of The Trillionaire Next Door. I know he lived below his means based off of his income he had no choice, but he saved and invested wisely! It just proves my point that hard-working people can create a foundation of wealth and financial independence for themselves and family by playing defense! It doesn’t matter how much money you make as long as your mindset is correct. Cut out frivolous spending, live below your means, save and make wise investments.