10 Wisdom-Based Strategies for Building Wealth
“This is your life’s work…
and you’re the CEO!” Gala Gorman
Imagine you are Noah and God tells you to build the ark. You might suspect that Noah was a little skeptical. Could it really rain for such an extended period of time that it would take a small ship to survive the storm? According to the Bible, the answer is “Yes!”
So when I suggest you build your own ark – one of the financial variety – how much convincing will you need? Fortunately, this ark won’t require you to assemble a seemingly useless structure in your backyard, and it won’t require a 1,000-year flood to be useful. This casket will be something you can be proud of and will provide you with financial security every day of your life.
While any approach to creating financial security must be tailored to an individual’s values and needs, these are the top 10 wealth-building strategies that I believe will ensure you can weather any storm life throws at you. sends to you.
1. Use the AR-KTM technique.
A. A is for asset accumulation. This may seem like a simple concept, but in today’s challenging circumstances, it’s all too easy to spend everything you make and more.
B. R is for debt retirement. Debts are not called liabilities for nothing. You should be working to reduce and eliminate debt when everyone else is focused on using every ounce of equity.
C. K is about keeping commitments. Once you make a commitment to yourself to apply the ARK TechniqueTM, you must stick to it! In this way, you build confidence in yourself and in others.
2. Prepare for the inevitable rainy day.
A. Understand life cycles. It’s a fact of life that you will experience challenging times – in a way, times like these are meant to correct your course. Life’s challenges are much easier to handle with financial security.
B. Maintain a positive AND realistic attitude. It may not seem like positive thinking to plan for a rainy day. I believe that planning and preparation are the most valuable tools you can use to deal with life’s problems.
C. Develop plans for your ARK. You need a plan. God gave Noah a “blueprint” to build from. You need a financial plan. What will your coffin look like when it is finished?
3. Recognize where your wealth comes from.
A. GUS is the source. Some call it “God,” others “Spirit,” others “the Universe,” and still others have developed their own term to associate it with. The acronym GUS (God’s Universal Spirit) honors all wisdom traditions.
B. Give back to those who have given to you – spiritually and otherwise. You might consider this tithe. Tithing is your way of demonstrating your faith in an infinite amount.
C. Subscribe to the Universal Usage Law. This universal law applies to every part of your life. Get rid of clutter and anything else that doesn’t serve a purpose. One man’s trash is another man’s treasure.
4. Develop sufficient liquid resources.
A. Cash is king! I cannot stress enough the value of having readily available funds that can be accessed without significant reduction in value. This is the “hull” on which your ark is built.
B. Calculate your cash reserve requirements. Do you know how much you’ll need to meet your minimum financial responsibilities over a six-month period?
C. Define “liquid”. Liquid resources are assets that can be converted into cash without penalty or market fluctuations. You need a six month cash flow plan that is easy to implement in an emergency.
5. Understand real estate investing.
A. Own your home “free and clear.” Mortgage brokers encourage you to borrow every dollar you can – especially with historically low interest rates. With this approach, you’ll be making home payments forever!
B. Use conservative values for planning purposes. In real estate, values can fluctuate dramatically based on factors that are completely out of your control. How much would you realize if you were to sell?
C. Are you ready to run a business? Owning real estate (unless it’s your personal residence) requires you to run a business that you may not consider a valuable use of your time.
6. Understand stock market investments.
A. Assess your risk tolerance. Investment advisors usually discuss the concept of risk with their clients but do not face the reality. Investments come with a significant chance that the value will decrease significantly.
B. Assume that the stock market is illogical. Today there are many “systems” that claim to make the market predictable. The truth is, there isn’t much logic behind market values.
C. Fund managers get paid even when they make mistakes. Most mutual funds underperformed the market by 3%. This is partly because fund managers are paid handsomely whether they perform well or not.
7. Know the value of your revenue stream.
A. Build a marketable business. When you’re ready to “retire,” will the work you’ve done to build your business have lasting value, with or without you? With proper planning, your business is a valuable asset.
B. Create lasting value from your career/work. If you don’t work in your own business, you can make the most of the income stream from your salary and benefits. Take advantage of employer-sponsored programs.
C. Top-up with investment income. Your investment strategies can generate additional cash flow if needed. Depending on the phase of your financial plan, you have the option to add to your usable resources.
8. Limit your “use” assets.
A. Depreciable assets are necessities or luxuries—perhaps both. In most geographic locations, a vehicle is a necessity. Does your vehicle meet your transportation needs or fulfill a desire?
B. Know the hidden costs of expensive “toys”. We all have them – assets that are nothing more than adult toys. You need to know how much these toys really cost to maintain.
C. Money buys experience. When people are surveyed about what makes their lives more fulfilling, the answers vary. People consistently agree that they love to travel, eat and be outdoors. It takes money to have fun!
9. Set goals.
A. You have a goal you’re moving towards. Without a comprehensive plan, you will have a hard time adjusting when faced with life’s challenges, financial or otherwise.
B. Define your wealth building strategy. Once you know where you want to go, you can determine what strategies need to be implemented to achieve your goals.
C. Embark on the journey. Just start! Realize that you will have setbacks, but you’ll never get there unless you start paddling in the direction you’ve decided you want to go.
10. Protect what you’ve built.
A. Buy foreseeable loss insurance. Property insurance protects some of your assets, but you must also consider the risk of losing your income stream. Life and disability insurance can provide additional protection.
B. Add layers of protection for unpredictable losses. There are many ways to protect assets from the unusual disaster – a lawsuit or other event. Asset protection tools can help give you peace of mind.
C. Create a succession plan. Whether you own your own business or want to provide for your family in the event you are unable to do so, any effective financial plan should consider succession.
You may feel as if a sound financial plan leaves no room for fun or enjoyment of life. Rather, your plan should serve your individual needs and put you on the path to financial freedom. If you dream of driving a luxury vehicle or taking a round-the-world cruise, your plan should factor in the costs so you know you’re creating a financial future that’s real and lasting, not just a “mirage.”
Albert Einstein (1879 – 1955) called compound interest the 8th wonder. It can work for you or against you. When you invest, it works for you. When you borrow, it works against you! There is a reason God told Noah to take males and females of every species aboard the ark…so they could multiply. This is what compounding interest does to you and your financial coffers. Creating a wisdom-based financial plan can help you make the 8th miracle work for you.
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