Which of These 4 Wealth Building Strategies Are You Missing?

April 16th, 2021 by dayat No comments »

The economy has been in a recess recently. Large companies are downsizing and reducing their employment rates. Many people are forced to sell their homes, find second jobs, and live a diminished lifestyle.

How about you? Are you suffering any of the symptoms above? If you are, then it’s time to take your personal finance into your own hands.

The truth is, you have always been personally responsible for your personal finance matters. Maybe most of you avoid taking charge of your own wealth and welfare, and as a result become overwhelmed when the economy takes a turn for the rough.

You complain and you blame, but nothing changes.

You could have avoided a lot of pain. If only you had created a solid wealth building strategy early in your life or career, you would be in a much more favorable financial position.

Do you have good wealth building strategies? It’s always a good time to start now! Having a strategy is important if you want to secure wealth for yourself and your family.

Here are four of the most important, simple to apply wealth building strategies that work for everyone:

Start making a budget

Making a budget to record your income and spending is the most basic strategy you can do.

Many people spend their money almost randomly, without any thought about how much they actually spend. This kind of random behavior is why they always run out of money at the end of the month.

To avoid not knowing where your hard earned money has gone, start writing down the income sources you have. Next to that list, create a list of all the expenses that you make routinely each month.

From this list, sum up your income and expenses then subtract your income with your expenses. Your aim is to have a positive number, which means your income is bigger than your expense. If you have a negative number, then go through your expenses list and find out what expense you can reduce or even cut out completely.

Save the extra money you have

When you have a positive number, it means you have extra money at the end of the month.

What do you do with this extra money? Some people might be tempted to spend it, but you know better right? Of course you save this extra money and put it in savings account!

Saving your money over time increases your value. If previously you always spent more than you earned, now you can start to build a small savings account. The main benefit of this simple act is that you also start to increase your self confidence and self esteem.

No matter how much money you can save, even if it is only a small amount, you must save it. Don’t be tempted to use it for unnecessary purchases. The more money you can save, the faster you can move on to the most profitable wealth building strategy.

Create control over your debt

Personally, I have always lived debt free. My motto is “If you can’t afford it in cash, it means you can’t afford it” (except for buying a house, a car, and school tuition).

Many people though do live with debt. This is the kind of debt that makes them unable to sleep at night. The most common random strategy to pay off their debt is to borrow money – make even more debt!

This is a terrible negative circle that make people miserable. To avoid this, you must control your debt. The aim of controlling your debt is to start reducing your debt amount slowly until you are free from debt or at least have only a small debt to pay.

You can control your debt by paying off your smaller debts. This will give you a sense of accomplishment and encouragement to start paying off your bigger debts.

If the debt is big enough, paying it off could take a very long time. That’s alright, the most important thing is to be patient and persevere. By staying consistent, you will start to develop the habit of good money practices.

Plus, being patient and diligent is an important character for the most important of these four wealth building strategies.

Wisely invest the money you save

This is the part of the strategy that most people don’t even get to in their entire lives. Only a small number of people have the luxury to invest money to increase their wealth.

However, being able to invest is not a luxury at all. It simply means that you are starting to reap the rewards of patiently making a budget, steadily saving money, and reducing your debt.

Investing your money is very important to create more wealth for your present and your future. The purpose of investing is to leverage your money to create more money, without active participation from your part.

There are many investment options that you can choose, including mutual funds, bonds and obligations, or more active investments such as property investing or investing in private businesses.

The most important thing is to make sure you educate yourself about these options. Many people make the mistake of going the popular route, only to have their hard earned money disappear due to ignorance. By educating yourself, you ensure you make only the best investment decisions for yourself.

Once you start to receive the results of your investment, repeat the process! Revise your budget, increase your savings, reduce your debt even more, and diversify your investments. These are the positive wealth building strategies that are sure to create more wealth for you over time.

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The Cycle of Wealth Building

March 16th, 2021 by dayat No comments »

There are foundational principles that rule the cycle of wealth building whether you build your wealth on stock market, home loans, or any other type of real estate investment. Many who are new to wealth building are often not aware of, or not disciplined to follow the principles for building wealth. The formula for building wealth is straight forward 1) make more, 2) spend less, 3) start early and 4) manage the risks. The cycle of wealth building consists of phases of goal setting, planning and execution.

1) Define the goals of your wealth building both short term and long term.

Goal setting begins with the questions of where do you want to be financially 5 years from now, 20 years from now and by the time of your retirement. For instance, you plan to own a half million dollar house in 5 years. You would like to accumulate net wealth of one million dollars in 20 years. And you want secure two million dollars in your bank account when you retire. The goal of wealth building should be challenging enough yet realistic. If they are set too low, you won’t be motivated to work harder. You’ll be totally frustrated if the goals are unreachable. Studying books for personal financing and attending wealth building seminars will help you to get it right at the beginning.

2) Develop a plan that help achieve the goals you’ve set

We won’t know exactly whether the goals of the wealth building are set too low or too high unless they are justified by a plan. Many investors may think one million dollar net wealth is unthinkable. In fact, if you invest $500 a month and that invest generates 11% annual return, you’ll be a millionaire in 30 years. 11% annual return is what S&P 500 index has realized in past 30 years. To achieve your one million dollar goal, you don’t even have to make the choice between “eating well” and “sleeping well”.

3) Follow your plan and work hard

There are two common causes of failures in wealth building – 1) not committed to the plan to work hard enough, and 2) not disciplined to follow the plan and rules even they work extremely harder. Even well-known investment gurus are often distracted to believe the possibility of get-rich-quick when financial market experiences drastic up-and-down swing.

Once you’ve completed the cycle of wealth building, the next cycle of wealth building begins. Returns on investment contribute to building your wealth but not if you forget about high interest rate on debts. Taking a wealth building seminar you can discover how maintaining a realistic and positive attitude is worth more than crying about a loss.
Wealth building can begin with a raise at work or your first income after an investment.

Genuine wealth building is made up of learning which comes from a wealth building seminar or personal experience, enhanced with the input and feedback of those who are already building their own wealth. In this cycle, cash is the king so get ready for developing enough liquid resources and never invest if you are afraid to lose because you will be propitiating your luck.

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Build Wealth Quickly – 3 Simple Asset Allocation, Wealth-Building Strategies

February 16th, 2021 by dayat No comments »

Who doesn’t dream of marching into their boss’ office one day and resigning without caring about the financial repercussions? Well, you can only do so if you have acquired sufficient assets (wealth) through which you can generate a future income to replace your current earned income. By the way, as a rule of thumb I don’t recommend you hand in your resignation unless you have at least 1 and ideally 2 years living expenses put away in liquid assets.

Simply put, to become wealthy over time you basically need to make, save and invest money wisely. The smarter you are at doing this the faster you become wealthy. Assuming you’ve read my other articles on How to Get Rich (the making of and management of money) then you are ready to look at the 3 most common wealth building strategies of the super wealthy.

1. Investing in Paper Assets (Stocks, Bonds, Funds, Currency)

Investing in “paper assets” is a great way to start building wealth. It teaches you the principals of money management, capital, rates of returns, risk etc. You can invest in stocks, bonds, mutual funds, commodities, and foreign exchange (“Forex”). Each of these options presents various levels of risk and reward and requires thorough research before you start. You don’t necessarily have to read the Wall Street Journal daily or subscribe to Fortune magazine in order to be a good stock investor. But you should at least get trained by an expert or have access to wholly independent financial advice from an experienced investor.

To help you get started, a basic overview of the paper assets investment landscape goes like this: There are 2 types of investments; ownership investments in which you own part of the asset (a stock is a good example) and loan investments in which you lend money to someone and they pay you interest (a bond is a good example). In many cases, you are looking for growth investments and those are ownership-type investments. (Bonds rarely provide a way to make you wealthy. Rather, they are a way to protect your wealth once you have it). Warren Buffett is a great example of someone who created massive wealth through investing in paper assets.

2. Investing in Real Estate

Real estate is another great way to build wealth. With real estate, you typically buy a property and then make money through selling it eventually for a much higher value than its purchase price and/or becoming a landlord and letting the property. One of the advantages of real estate investing is using the principle of leverage (i.e. a mortgage) to buy an asset that you otherwise couldn’t afford. Leverage isn’t commonly available in paper assets investing (although you can buy on margin but this can be risky if you don’t know what you’re doing!).

Real estate investing can be focused on either residential, commercial or land. Wealth building through real estate involves buying and selling a property – sometimes referred to as “flipping” or “trading” and often involves “rehabbing” a property (i.e. fixing it up)- to give the fastest and best rate of return.. However, landlording is a more standard approach that requires more time to build wealth, generating a small income in the meantime from the rental income after subtracting all expenses. Want to know how to build wealth quickly with real estate? Consider buying a distressed property using leverage, fixing it up, and selling it again quickly. However, watch for market fluctuations in supply and demand and availability of capital in order to use this strategy effectively. Donald Trump is a great example of someone who created massive wealth through real estate investing.

3. Starting, or Owning a Business

Starting, or owning a business is another common wealth-building strategy. Starting a business doesn’t always make you really wealthy right away. It takes time and energy to build the income of a business and its capital value, but it can make you wealthy over time if managed effectively. Therefore, if you have previous experience of running a business it can sometime makes more sense to buy an existing business and simply run it better. Want to know how to build wealth starting or owning a business? Find something that you love to do and that solves the needs of a target market. Then sell that product or service through relentless marketing and sales. Create efficient systems to sell more, more often. And work towards growing the value of your business by making it less dependent on you so that you can eventually sell it to a new owner. Bill Gates is a great example of someone who created serious wealth by starting a business.

Whatever way you chose to start building wealth, always remember those words from the mouth of antihero Gordon Gecko in the movie Wall Street…”Money never sleeps pal”. Different asset class values will shift in time (daily/monthly/annually) and according to market cycles. It’s also a good idea to scrutinize your assets and then take steps to re-balance your portfolio periodically. You also need to match risk to what stage you are in life. So, want to know how to build wealth quickly? It’s simple: Take your hard-earned money, save as much as you can as you go and then choose a strategy (from above) and consistently, month by month, year by year, apply yourself to these wealth building strategies.

Remember, building wealth doesn’t happen overnight. But with education, time, diligence, research and hard work, you can go from wondering how to build wealth to actually becoming wealthy and enjoying your millions! Mastering wealth building will ensure that money you earn isn’t flitted away carelessly and that you get to secure your financial independence! Discover how to build wealth using simple, effective

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It is Not What You Make, But How Much You Keep – Wealth Building 101

January 16th, 2021 by dayat No comments »

Are you tired of working long hours, and sacrificing to have nothing to show for it? If you do not have a plan for your money, someone else will. Wealth building is not a fast process. In order to have and keep wealth you must understand the process of building wealth. Wealth is the value of assets, either physical or intellectual, that can be passed on through your generations. I was at the barbershop, Fair Deal’s, on E Berry in the late 80′s. One of the barbers said to a customer, “you have been working for 25 years, and you have nothing to show for it, but a broken up old body.” The customer laughed as he walked out the door. I knew him through the neighborhood, and knew over the last 25 years he had bought 10 homes and numerous vacant lots all over the city. No one knew he had accumulated wealth until after he died. The biggest tragedy was he never taught his four children the process of wealth building. The children sold it all upon his death. Sound familiar? This is why wealth is intellectual as well as physical. We all know or have heard of stories such as this. This is why I am creating THE BLUE PRINT to Wealth Building. Not just African American families, but other Americans as well, have a history of wealth building through business and land ownership, and intellectual capital. It is time for it to become a way of life again, through sharing ideas and sharing resources and taking action on our dreams. Living it every day out loud.

BLUE PRINT of Wealth Building: Phase 1

• HAVE A PASSION THAT IS WORTH YOUR BEST EFFORTS

Have no fear when it comes to realizing your dreams. Whatever you dream is, it can become reality faster than you think. Once you come to grips with the fact that it is your dream, and not anyone else’s (i.e.: your dream killers) it will come faster. 1) Decide to do it, 2) Plan how to get there, 3) Take Action on your plan, 4) Stay Focused. You may say I make it sound too easy. It is not! You have to believe in you, and give it your best efforts every day. LIVE IT through YOUR everyday life; not by watching others live your dreams.
• IDENTIFY WHAT HANDS ARE CATCHING YOUR MONEY BEFORE IT HITS YOUR POCKETS

In order for you to build physical wealth you have to know who or what is taking it away. Some of the hands we can’t avoid such as cost of food, the mortgage, taxes, and health care costs. You have at least three hands reaching at your money. Identify the hands and prioritize them according to your dream.
Hand 1- Wealth Building – The money that goes into investing in your dream. Investing in your saving accounts, retirement plan, real estate, higher education, or small business.
Hand 2- Responsibilities – Anything that can go on your credit report if not paid. Children do not go on your credit, but they are a privilege and a responsibility. Mortgages, rent, car payments, cell phone bills, child support are responsibilities you must pay.
Hand 3- Wants – Are the icing on the cake. The vacations, the cars, and clothes are great. Life is short, so live it and enjoy it. But do not make your wants your number priority. There is nothing like a well-dressed, but broke person.
• INVEST INTO WHAT YOU UNDERSTAND AND WHAT YOU CAN COMMIT TO

Do your research on any investment you put your money in to. Investments are more than stocks and mutual funds. Going back to school is an investment. The background research you do will make you more confident of your choices. Believe me any person making an investment presentation will be ready for you and your questions.
The best investments are the ones you understand. Consider these tips as rules of thumb before investing your money.
Know how the investment makes money
Know how you make money
Know your exit strategy (cost, time restraints)
Know how much it will cost you
Know the history of performance, lawsuits, etc.
Know your decision to commit to this for the full time frame required to see growth
In the following weeks I will continue adding to the BLUE PRINT of Wealth Building. This approach may or may not work for you. Explore your options and start the dialogue of wealth building. You may be amazed of what will happen once you make it a priority.

Market Blurb

One of the most common questions I hear is: “what do you think about the market?” “Or what is a good investment now?” Here is your answer:

Like a perfectionist that is never satisfied, when presented with some of the best fundamental data in years, the market chooses to find faults and be picky. Not that there aren’t a number of things to be critical of, including the situation in Greece, lack of job growth, high budget deficits, and slowing loan growth in China. These are all reminders that risks to the economy and earnings still exist. Expect volatility, much like what has been experienced already this year. Volatility will continue as the economy and markets transition from a stimulus-driven recovery to an environment of self-sustaining growth.

Also, there are two very different ways of considering risk: opportunity or danger. Some would argue the latter is far more likely than the former at these levels in the market and at this stage of the market recovery. With a little patience, the commitment to a well thought out investment plan and a willingness to follow Warren Buffet’s sage advice “be greedy when others are fearful, and fearful when others are greedy,” could result in turning the tone of this market pullback from danger to opportunity.

Live Your Dream!

JDG

Jamie D. Grant

Managing Principal Jamie D. Grant Wealth Management Group

The JDG Wealth Management Group utilizes the tools of Envision Wealth to provide sound financial guidance to our clients and their families.

Envision Wealth is our holistic approach to providing unbiased, research driven financial guidance. The process combines goal setting, client data collection, research, development of a personalized financial plan, evaluation of the process once implemented, and client education and events. JDG Wealth Management Group believes life comes with challenges and opportunities: marriage, raising a family, buying a home, college, retirement, serving as care-giver to a loved one. These are all a part of life’s journey. Through the use of Envision Wealth, JDG Wealth Management Group help you meet the opportunities and challenges of your life, through focusing on your growth. We believe your growth matters; growth of your financial vision, financial knowledge and confidence, assets, family legacy, and your financial independence.

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Wealth Building – Danger! Don’t Try Re-Building Your Wealth Till You Read These 4 Steps First!

January 16th, 2021 by dayat No comments »

Many of my friends and colleagues have taken a serious hit since the financial and property market meltdown in 2008. Indeed, much of what people worked for all their lives has vanished as their asset values fell off a cliff. Some have even lost their businesses and others are grappling with serious negative equity and massive debt attached to their real estate. But even as everyone wrestles with these financial challenges, they’re finding new opportunities…and these opportunities are not under their mattresses!

There is always opportunity in crisis. On a personal level this is a great time for re-assessing your life goals and values. From a wealth building perspective, apart from snapping up distressed assets at bargain-basement prices, possibly the true financial opportunity is something less obvious. Perhaps it’s the opportunity we have to realign our thinking regarding wealth and how we build it. Here’s an outline of 4 steps you could take in order to start rebuilding your wealth.

Re-Building Wealth Step #1: Re-assess Your Portfolio

Chances are your investments are in totally different shape to where they were before the financial crisis. If you were an active investor, some of your stocks or real estate values may have taken a serious hit. At this point, it is your call whether to hope they will someday rebound or cut your losses. If the yields are holding up on your real estate it may be worthwhile to ‘trade out’ of negative equity if positive cash-flow is still being generated. If any of your investments have produced capital gains, cashing in now could be a good idea and provide some capital for better investments. Re-assessing your portfolio is a great first step in rebuilding wealth.

Re-Building Wealth Step #2: Re-balance Your Portfolio

Whether you were actively investing or more passively sitting on your assets, the financial crisis has probably taken your portfolio out of alignment. Balanced asset allocation is critical to long-term investment performance and wealth building. Taking your risk tolerance and investment horizon into account will help work out what asset allocation works for you. Just because certain stocks might be performing well at the moment doesn’t mean you should go chasing stocks and switch your cash out of bonds if bonds is where you need to be at right now.

Re-Building Wealth Step #3: Rethink Your Wealth Building Strategy

In addition to seeking out high-performing assets, a fundamental rethink on how you build your wealth may be required. It may mean employing wealth building strategies that were put off during boom times. Perhaps becoming financially literate should be a key objective right now. Rather than placing all your chips on high-performing stocks or property maybe you need to earn your right to invest and build up a solid foundation of cash or cash-equivalents (e.g. money market accounts, certificates of deposit etc) and bonds first. It’s recommended that at least 10% of your investment portfolio should be in cash or cash-equivalents at all times. This ensures you remain liquid so that a. You have funds to handle any financial circumstances ahead and b. You have funds to readily avail of possible investment opportunities. I think that many of us were guilty of some fundamental wealth building blunder by being over invested in real estate and stocks without first having a solid base of cash, cash equivalents and bonds. Now is the time to re-adjust this imbalance.

Re-Building Wealth Step #4: Focus on Growing Your Wealth

So, you’re keeping winning investments or cash them in, weeding out the losers from your portfolio and realigning your asset allocation. What next? Well, now it’s time to focus on increasing your returns and growing your investment portfolio. Whilst paying down debt, especially what I call ‘bad debt’, is hugely important, equally so is re-building your wealth with sound and advantageous use of ‘good debt’. Focusing on building wealth is critical so that the focus isn’t on debt reduction only. Apart from hunting down real estate or other business opportunities in your state or country you really must think and act globally. You simply can’t afford to rely on any one economy so don’t be afraid to seek out opportunities in foreign territories and emerging markets. Diversification by both asset type (stock, real estate, bonds etc) and geography has never been more appropriate.

So, rather than ever waiting for markets to change you can take charge of your own financial bailout and re-build your wealth. Re-assess and re-balance your portfolio. Rethink your wealth building strategy and then focus on growing your wealth.

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