The 17 Principles of Creating Wealth

Chapters 8-9

Creating Personal Wealth Is A Numbers Game

If you can create enough sources of cash flow, outside your normal day job, you can realistically replace the need for a full time job. Imagine, making the same money you make working 40 plus hours a week, dealing with traffic jams daily, putting up with slobs, and stressing over job security, without the headaches and hassles. Is it possible?

Yes. Therefore, the eighth step in your progression to personal wealth is to crunch the numbers, start small, and dream big.

One of my favorite pastimes is to crunch business opportunity and income producing numbers. If I wanted to replace a job that provided me with a $40,000 gross (before taxes) annual income, I would need to make $3,333 dollars per month, $769 per week, or $109 per day.

Hey, this is fun. I only need enough alternative forms of income to generate $109 per day, and I could spend my future enjoying life, expanding my business ventures, and investing wisely for a secure future for my family.

Think in terms of a round number, say $100. What could you do to create $100 of cash flow into your hip national bank 365 days per year? $100 may sound like a lot to make each and every day, using your own wits and not depending on a government handout or an employer’s paycheck, but it is a realistic number, starting from where you are at today.

I will not ask you to spend 40 plus hours a week hustling around town bothering people, or engaging in illegal or unethical activities. You can do this honestly and be proud to share your moneymaking ideas with your mother. Consider this example. If you sold a product online for $10, you would only need to sell 10 units to make $100. If your item sold for $25, you would only need to sell 4 units. Or, if you sold a product for $769 profit, you would only have to sell one unit per week. Using the vast array of mediums to market and sell products today, you could feasibly replace your job income with a fraction of the time and effort you expend serving the goals and dreams of your employer.

As in any business venture, there are risks, setbacks, and disappointments. However, if you will use due diligence in all of your decisions, seek expert advice whenever possible, and persist while others dropout or quit, you can do this. You need to start by reading more about this concept. I recommend you read these books immediately:

·        The Automatic Millionaire, by David Bach

·        Rich Dad, Poor Dad, by Robert Kiyosaki

·        Multiple Streams of Income, by Robert G. Allen

It has been said that we are what we eat. This may be true, but I believe we are also what we dream. What are your dreams? Your goals? Your ambitions?

Finding success in any business endeavor begins with a dream, which must then be developed into concrete goals, as I discuss in the Life Plan Worksheet below. Once you have established specific goals, break these goals into tasks, and then into steps. For example, if you have a dream to create an income outside your primary job, this dream could become a goal to make $20,000 profit per year selling products on Ebay. This goal could then be broken into tasks of identifying a hot product line, finding sources for your merchandise, and learning how to become a Powerseller on Ebay. I use Ebay as an example only. There are dozens of other online opportunities available.

At this point in the goal setting process you must transform the tasks into steps. One step may be to visit local auctions and thrift shops for merchandise, another step may be to open Ebay and Paypal accounts, followed by actually listing items for sale, shipping the products and providing customer service. Each step in this process must be deliberately accomplished to achieve success, but it all starts with a dream. Therefore, we are what we dream.

As a home-based entrepreneur you need to take a look at a variety of opportunities. Keep your expenditures and fees low, if not zero, and then choose 1-3 ideas that you feel would inspire you to take action. Fortunes have been made on one idea, cleverly marketed, produced, and delivered to the customer.

Use Other Peoples’ Time and Money

While the previous principle states that you must take action for yourself, please do not interpret this to mean “by yourself.”  Capitalism and personal wealth are built on the concepts of labor utilization and capital investment.  In other words, using people and their money to build your empire.  Note that I did not say “abusing” people and their money.  When you use people you treat them fairly and with respect.  When you use other people's money, you repay it, with interest.

The service industry provides an example of this concept. If the owner of a security agency is able to charge $20 per hour for security services, and pay his or her labor $10 per hour, plus an estimated 25% of gross labor costs in social security and worker’s compensation payments, the owner of this agency is able to realize $7.50 per hour in gross profit. If the agency was able to land contracts sufficient to bill for say, 10,000 hours in a month, he or she could see over $75,000 per month in gross profit. This is the power of leverage in the form of utilizing the talents and resources of other people. This concept befuddles the professional sector, such as doctors, dentists, and lawyers, who can only bill for services they personally provide.

Thus, the ninth step in acquiring wealth is to use other people’s time and money in an ethical and fair manner.

Consider a similar case of using borrowed money to make investments. If you had $10,000 to invest in a piece of income producing real estate, how much property could you control? There are some zero down deals out there, but generally, the down payment is going to represent about 10% of the property value. Therefore, your $10,000 nest egg will control a $100,000 property. Rent on this property will average in the neighborhood of 1% of the value, so you may see $1,000 per month in rental income.

In this scenario, you have successfully used $90,000 of other people’s money to buy and control this property. What if you were able to obtain a loan for 100% of the property value? With zero upfront cash invested, and a positive cash flow from rents, (with a breakeven scenario at minimum, keeping in mind maintenance costs and potential vacancies) your return on investment (ROI) is infinite. With any real estate transaction, due diligence and professional assistance is critical to your success.

Seeking professional assistance is a perfect example of leveraging yourself by utilizing the talents and skills of other people. A typical lawyer has spent approximately 6-7 years in college, three of those dedicated to the study of law. When you seek a lawyer’s advice, you are paying for access to this knowledge—a small fee compared to the alternative of years of your life spent in training, or hefty lawsuits from disregarding the law.

Likewise, the careful use of associates can propel your personal financial rocket into the stratosphere. Take a look at any service-based business. How would they survive without a dedicated labor pool?  Security service agencies are a classic example of this point. A mall may contract for security services and agree to pay the security firm owner $24 per man-hour for security. The resourceful business owner recruits and trains security guards, and then pays his employees around $10 per hour to walk a beat and meet the contract requirements for mall security. After approximately 22% in various employer fees for insurance and Social Security taxes, the employer realizes roughly $11 per hour in gross profit. If you had three guards working the mall around the clock, you would have 72 man-hours in billable services. At $11 profit per man-hour, you could make $792 profit per day, 365 days per year. This is the power of a service based business and the leverage of using other peoples’ time, and numbers like this build financial empires.

When an empire builder uses other people's money and labor he multiplies his potential, much like a hand tool magnifies the strength and utility of your hand.  Could you imagine taking lug nuts off your car without a wrench?  Likewise, can you imagine building a business without the services of other people, the advice of legal and accounting professionals, or the backing of venture capitalists or lenders?

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All Rights Reserved. No part may be duplicated or distributed without express written permission. This report is an original creation of XOR Career Guides, and is not a part of any affiliate or associate distribution plan. Rights to distribution of this report should not be implied or conferred. Information in this report should not be construed as legal or accounting advice. Keywords: business, success, wealth, money, finance, rich, investments, real estate, stock. This report is for information use only and is not intended to provide investment advice. Concepts and ideas depicted in this report should be used at the reader’s discretion. Use due diligence in all of your investment decisions.

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