Whether you're struggling to survive or inherited millions, there are major money rules to follow if you would like to get and stay wealthy.
When it comes to growing capital, many believe that buying stocks is one of the biggest secrets to success.
While it’s true that stocks have their place on a lot of peoples’ road to riches, most successful people do not just own stock – they also own other assets.
This could include real estate, natural resources such as gold, silver, and diamonds, companies, or even business ideas.
Author of Secrets of the Millionaire Mind, T. Harv Eker, makes no bones about the rules involved with money in all it's forms and he highlights some pivotal ones about making, managing, growing, and keeping your wealth.
While we explore some of the major money rules to follow from Harv’s perspective, consider how these basic principles can be applied to other areas of life outside of money.
Those who have ‘made it big’ control their futures, because they are able to control their assets, according to Harv.
They understand how to make money, but they also realize that passive investments alone are never enough to truly thrive.
One of the most effective weapons in their arsenal against the plague of poverty is their money habits.
If you talk to any very wealthy person, you will most likely hear that their assets are spread over different areas, says Harv.
They may also say that their risk is controlled by their choice of investments, through the implementation of rules that are designed to help them protect their assets.
These rules sometimes mean that opportunities are passed up, Harv admits, but at the end of the day, most rich people understand that risk management is always the most important thing.
If you truly want to succeed at the money game, Harv insists that you will need to know these rules.
These will help you learn how to start growing your funds, to understand which investments to choose and which to pass, how to make investments, what you need to get started, and who to involve in your deals.
Rules 1 through 4 are the cornerstone of the principles that can help to build and retain wealth:
The first money rule, according to Harv, is that you cannot invest money that you do not have.
You cannot even invest every cent of money you DO have.
You need to figure out how much money you can risk as assets, and from there you may find that your rules push you outside your comfort zone, making you sharper and more alert, says Harv.
This is often the best state for making good decisions, and for finding opportunities.
Before you can determine your money rules, you first need to know where you are right now, and where you want to be in the future.
Much like planning a travel adventure on a map, you need a starting point, as well as a finishing point.
This, Harv states, will allow you to trace the route to get from A to B.
From that point, your rules will allow you to begin your very own path to success, in order to reach your ultimate goals.
Another rule is to develop goals for return on your investment, says Harv.
These will be applied for cash-flow investments as well as appreciation.
Once you know how much money will be required each month for investments, you can determine your ideal net worth over the next few years.
Harv urges you to remember that it is investments grow wealth, while money in the bank prevents risks.
The third money rule Harv suggets you follow is to decide whether you want your investment to bring growth or income.
You will need to evaluate your finances to determine exactly how much money you need, as well as determine the growth that you are able to afford.
This, says Harv, will allow you to see how your investments fit in with your need for cash, growth or both.
You may choose to invest in rental property, or maybe natural resources like gold or silver.
You may not want more money upfront, but would rather want to aim for the growth potential.
In this case, you could seek out land that will be developed somewhere in the future, which Harv mentions will tie up your current cash levels.
The final money rule on growing your finances through investment is deciding whether your income will be active or passive, Harv says.
Active income requires your involvement to deliver return on investment.
Passive income requires you to provide the funds and then to let the financial managers of your investments do the work.
Whichever option you choose, Harv confirms that both of these income types have the ability to help you grow your wealth and work towards the kind of financial life you have always wanted.
There are rules of making money, rules of spending money, rules for saving money and of course rules for keeping money.
Make sure to learn them so you can win at playing the money game!
Learn how to develop a millionaire mindset so you too can be equipped with the freedom and skills to win the worry-war.
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Has your Mind ever wondered..
Plan how you will make, spend, save and keep your money by budgeting your income monthly and monitoring your expenses closely without deviation from your budget if you wish to maintain a higher net worth and limit liabilities.
Don’t invest money you don’t have and if you are investing, make sure to have goals for what you want as a return.
Decide whether you want your investment to yield growth or income and whether this income will be active or passive.
This article is straight to the point.