A lot of people contact me asking me "What is the first step" or "How can I get started on the road to wealth".
The problem with this question is that there is 1,000 answers.
Each person will have a different path that will lead them to wealth.
Your job is to find your own specific path that suits you.
Donald Trump and Bill Gates are both extremely wealthy people, but they had different paths that made them wealthy.
Your path will be different from me, and different from your friends.
But there are three things every person needs to know before they start on their road to wealth.
In order to go from where you are now to where you want to be you first need to know these three things: •You need to know exactly where you are •You need to know exactly where you want to be •You need to know when you want to get there.
If you don't know these three things, then you will simply float around and you will never get anywhere.
1.
You Need To Know Where You Want To Be If you want to become rich you firstly need to know what that means to you.
Being rich means different things to different people.
To some people having $1,000,000 in the bank is being rich, some people want an income of $100,000 per year to classify themselves as being rich.
Everyone has a different idea on what being rich is, you need to find out your definition.
Financial independence is what I would encourage everyone to aim for in their quest to become rich.
Basically financial independence is having more passive income (income you don't have to work for) than expenses.
Some people earn a lot of money, but because their expenses are so high (like their mortgage, car and loan payments, insurance, lifestyle etc) they are tied to their job.
As their income goes up so does their expenses and they are forced to work even harder just to make ends meet.
This is not success, being rich is having money AND time.
So what are you current expenses? Maybe it should be your goal to have passive income that completely covers your expenses.
This is a great goal to aim for.
It will give you the freedom to be exactly who you want to be and do what you want to do with your time without having to worry about money.
2.
You Need To Know Where You Are Now It is great to have a goal of financial independence, but you will never get there if you don't know where you are starting from.
Knowing exactly where you are now is vitally important.
If you don't know where you are now in terms of income, expenses, debts, assets and liabilities then it will be impossible for you to move towards financial independence.
The easiest way to asses where you are right now is to look at your cashflow (that is: the way your cash is flowing into and out of your bank account).
Take a look at all of your expenses.
This includes expenses like rent and mortgage repayments, running your car, insurance, food, fun, alcohol, internet and phone etc.
What are your total expenses each month? Now look at your total passive income.
How much income are you earning that you DON'T have to work for? The gap between your expenses and your passive income is now a goal that you can aim towards.
Getting your passive income up is not hard, but it does take some education and practice.
3.
You Need To Know How You Are Going To Get There Choosing the right investment vehicle is just as important as knowing where you are and where you want to go.
If I wanted to go from Australia to New York, I would need to choose the right vehicle.
I couldn't choose a car because I need to cross over oceans to get there.
The same is true for investing.
Not all investments are created equal so it is up to you to choose the right investment vehicle for you.
The problem with this question is that there is 1,000 answers.
Each person will have a different path that will lead them to wealth.
Your job is to find your own specific path that suits you.
Donald Trump and Bill Gates are both extremely wealthy people, but they had different paths that made them wealthy.
Your path will be different from me, and different from your friends.
But there are three things every person needs to know before they start on their road to wealth.
In order to go from where you are now to where you want to be you first need to know these three things: •You need to know exactly where you are •You need to know exactly where you want to be •You need to know when you want to get there.
If you don't know these three things, then you will simply float around and you will never get anywhere.
1.
You Need To Know Where You Want To Be If you want to become rich you firstly need to know what that means to you.
Being rich means different things to different people.
To some people having $1,000,000 in the bank is being rich, some people want an income of $100,000 per year to classify themselves as being rich.
Everyone has a different idea on what being rich is, you need to find out your definition.
Financial independence is what I would encourage everyone to aim for in their quest to become rich.
Basically financial independence is having more passive income (income you don't have to work for) than expenses.
Some people earn a lot of money, but because their expenses are so high (like their mortgage, car and loan payments, insurance, lifestyle etc) they are tied to their job.
As their income goes up so does their expenses and they are forced to work even harder just to make ends meet.
This is not success, being rich is having money AND time.
So what are you current expenses? Maybe it should be your goal to have passive income that completely covers your expenses.
This is a great goal to aim for.
It will give you the freedom to be exactly who you want to be and do what you want to do with your time without having to worry about money.
2.
You Need To Know Where You Are Now It is great to have a goal of financial independence, but you will never get there if you don't know where you are starting from.
Knowing exactly where you are now is vitally important.
If you don't know where you are now in terms of income, expenses, debts, assets and liabilities then it will be impossible for you to move towards financial independence.
The easiest way to asses where you are right now is to look at your cashflow (that is: the way your cash is flowing into and out of your bank account).
Take a look at all of your expenses.
This includes expenses like rent and mortgage repayments, running your car, insurance, food, fun, alcohol, internet and phone etc.
What are your total expenses each month? Now look at your total passive income.
How much income are you earning that you DON'T have to work for? The gap between your expenses and your passive income is now a goal that you can aim towards.
Getting your passive income up is not hard, but it does take some education and practice.
3.
You Need To Know How You Are Going To Get There Choosing the right investment vehicle is just as important as knowing where you are and where you want to go.
If I wanted to go from Australia to New York, I would need to choose the right vehicle.
I couldn't choose a car because I need to cross over oceans to get there.
The same is true for investing.
Not all investments are created equal so it is up to you to choose the right investment vehicle for you.