The Rich and How They Amass Fortunes is no Secret
What is the difference between “The Rich and how they amass fortunes” compared to the average successful person!
It is primarily how the rich think that allows them to achieve a much higher financial success….!
Two people I want to use in my model comparison are Jerry Buss former owner of the Lakers one of the biggest and richest sport franchises in the world and Warren Buffett one of the richest men in the world.
So to start the comparison let’s look at Joe Smith. Joe Smith is successful in Corporate America, works hard and makes around $100,000 a year.
Everyone at middle-income says that is great if I could only get to that point where I made $100,000 a year, my life would be great. What most people don’t realize is Joe Smith is a few paychecks from broke.
Joe when he finally made a $100,000 a year goes out and buys a house. Now the majority of you reading will jump out and say Joe bought an asset. Could be so…. but, it could also be a liability. The house could go up in value in a good market but it also could go down leaving the owner owing more than the house is worth. With the maintenance and if the house does not appreciate the purchaser could have no equity in the property.
Another scenario if Joe drew money out and remodeled! Joe might have a property when you add the remodeling costs in addition to what Joe purchased the home for; the property might not have any profit in it if Joe were to sell. So is the purchased property an asset or a liability?
The rich would look at this as a liability and I will explain later in this article.
Let’s continue with my story.
Things are going long really well and in two years Joe Smith salary has grown to $120,000 a year and Joe goes out and buys a BMW. Joe always wanted a luxury car and things are looking up so Joe makes the purchase. The purchase of the car is definitely a liability as it will most likely not appreciate in value or have any rate of return.
Two more years pass and Joe Smiths salary has climbed to $150,000 a year and now Joe goes out and buys his wife a Jaguar. Things are great right…! Joe is making $150,000 a year…!
Well Joe Smith just added another liability to his portfolio that will not produce any rate of return; it is just a purchased item!
Everything appears to be looking up and with all Joes hard work his salary eventually reaches $200,000 a year. Joe Smith and his wife purchase a vacation home in the Big Bear up in the mountain to have a get away! Even though Big Bear is beautiful, property values over the years have taken a beating. Chances are that Joe Smith just purchased another liability.
What is even scarier is; the majority of Joe’s salary is going out each month to pay for all these purchased items.
In a changing economy the company Joe Smith works for is in economic trouble due to profit and return. The company Joe works for is looking to restructure and Joe gets caught up in a work force reduction, is given a small severance and a thank you for all his hard work.
The problem is all of Joe Smiths salary is being used to support his lifestyle and even with the high salary Joe made, Joe is pretty much was broke!
Perception is everything but on paper this does not pan out well for Joe Smith!
Joe falls behind on paying pretty much everything and losses the vacation house to the bank because he could not pay for it and fell behind on payments. Joe tried to sell but could not get offers above what Joe owed for the property. The cars Joe was making payments each month on cost Joe $1600 each month in addition to higher car insurance premiums due to having purchased luxury cars.
Joe Smith story does not end well. After years of hard work Joe has not really accumulated any wealth.
Even worse, Joe finally finds another job after almost a year of looking but his new salary is only $75,000 a year. Joe cannot afford the lifestyle he has become accustomed to an eventually losses the cars the house he lives in.
Joe with all his earnings only acquired liabilities.
You hear this over and over again.
Now see the beauty of “The Rich and How They Amass Fortunes.”
The rich when they make money buy a business. Everything they purchase has a rate of return. Jerry Buss started buying commercial properties in his twenties by creating a co-op with his workers in the Aerospace industry. Each month the people in the co-op contributed $80 of their paycheck in which when the fund accumulated enough money they went out and purchased a commercial property.
This was an investment as the commercial property brought in rent plus grew in value.
Jerry and his team continued to purchase the right income producing properties and businesses until Jerry had accumulated enough money through his real estate purchases and other investments to where he could afford to buy the Lakers. The rest is history, the Lakers are one of the biggest sports brands on the market today and it would be hard to put an accurate price on what the franchise is really worth.
Warren Buffett one of the richest men in the world has a similar story. He made purchases of businesses and investments that all had an immediate rate of return. Everything that Warren purchased was an investment.
It was not until the money came in that both these businessmen made any lavish purchases. As a matter of fact, Warren Buffett lives in the same house he started in; he has just added a few rooms over the years.
So when you compare the two different routes, you see The Rich just think differently. Their strategy was to purchase businesses, make them success and then purchase something else that provided income.
They did not buy big homes; build fancy lifestyles until they had built wealth. Warren Buffett today still lives modestly compared to his wealth and gives away large portions of his earning to charities.
So here is where I am going with this story!
The only way to accumulate wealth is to invest in things that produce a rate of return.
Everything you do should produce a rate of return!
So here is my pitch…!
Are you ready to change and start developing income?
I have the first business you can get involved with and it will only cost you $9.95 a month. Did you fall over and do you think I am kidding? Do you think there is a catch? There is no catch..!
My overall plan is to develop multiple streams of income. Once I produce income in first venture, my next goal is to find another that will continue to produce income.
See I am looking for income that recurs every month.
So I will ask again.
Are you ready to change your life and start your first business to add to your portfolio? If you are then click on DECIDE below and I will help you change your thoughts so you have a chance for success plus to add your first income producing opportunity.
We are developing a group of like-minded people whose long-term goal is to be financial free.
I will answer your questions and show you our overall team strategy.
If you are doing the same in thing five years that you are doing today, will your life in five years be the same?