When I see a tall building, I always wonder how a building can be that tall without falling over. By chance, I manage to read about the construction of a tall building and realize that the foundation of any tall building is carefully designed to support it. A lot of efforts and works are done at building the foundation.
Once a strong foundation is built, the construction of each story seemed to be rather easy. If I equate a tall building as great wealth, then this is like seeing the rich people keep getting richer faster! This is because they have a good foundation to create their wealth just like a tall building has a strong foundation to build more storeys.
What are the foundations of wealth creation? After reading a few books on wealth creation including the Rich Dad's series by Robert Kiyosaki and attending a few seminars on wealth creation, I have identified a few foundations for wealth creation based on my understanding.
Firstly, I need to have a physical health so that I have the physical energy to work hard. Imagine if I am always sick, I will never be able to concentrate on my work. Progress will be always hindered by my poor physical health.
I will need to exercise regularly to keep my body fit and healthy. Lack of exercise will cause my body to have poor immunity to diseases. I will need to watch what I eat and drink so that I can remain healthy. Eating junk foods and drinking liquors excessively harm my physical body. Also, I will need to rest enough to ensure that I have ample energy to work on my plans. Lack of sleep will cause me to be forgetful and make mistakes in my plans to gain financial freedom.
Secondly, there is a need for me to have good mental health so that I can concentrate on my plans to achieve financial freedom. If I do not have good mental health, I will lose focus easily and get distracted by other things.
I will need to practice concentration meditation regularly to keep my mind fit and sharp. Lack of concentration exercise means I will not be able to focus on my plans totally and thus prone to making careless mistakes.
Making genuine mistake is good but making careless mistake is bad. Careless mistakes are mistakes that I have already learned and become aware of. Thus, there is nothing much I can learn from these careless mistakes that will accelerate my path to financial freedom.
If I have made a genuine mistake, then I will be able to learn something from this mistake. The purpose of learning from mistake is so that I will not repeat them again as highlighted in the Rich Dad's series by Robert Kiyosaki. If I keep repeating the mistakes, then it defeat the purpose of learning from mistakes.
Thirdly, there is a requirement for good emotional health so that I will not get emotional over my decisions. I need to practice insight meditation to understand how my mind works. By understanding how my emotions arise and fall in my mind, then I will be able to manage my emotions better. If I can manage my emotions properly, then I will be able to make decisions based more on logic than emotions.
For example, if I cannot manage the fear of failures, then I will not be able to make the decision to master any skills that are essential for wealth creation. This is because failures are part and parcel of the learning process. If I can manage such a fear, then I will be able to master any skills quickly.
Next, I need to have a good spiritual health. That can be achieved by doing good deeds to help the needy around me. It may not just be money that they required. Learn to give love and care, time to listen to them and so on. This will help me to build a peaceful mind. If I have a peaceful mind, then I will be able to perform better in whatever I am trying to achieve.
Just like a tall building needs different layers of foundation. I feel that there are different layers of foundation required for wealth creation. What I have described above is just the first layer of foundation. Without a good physical, mental, emotional and spiritual health, there is no way I can face and manage the challenges in life well so that I can succeed in life.
* DISCLAIMER *
The author, publisher and distributors particularly disclaim any liability, loss, or risk taken by individuals who directly or indirectly act on the information contained herein. All readers must accept full responsibility for their use of this material.
Showing posts with label Robert Kiyosaki. Show all posts
Showing posts with label Robert Kiyosaki. Show all posts
Friday, June 12, 2009
Creating Wealth!
Creating wealth is a way to gain financial freedom quickly. Based on my understanding of the Rich Dad's series by Robert Kiyosaki, the rich people create wealth. For example, the rich people start a company and get it listed on the stock exchange. The shares of a start up company are not really valuable. But the company manages to be listed in the stock exchange, the value of the shares suddenly shot up.
Another way to create wealth is writing options. I can write contracts to sell or buy shares at a particular price that is valid for a period of time and sell the contracts for money. In that sense, I am creating money out of a contract.
But exactly what is involved in the process of creating wealth? So far I only know that I can create wealth by starting a company and getting it listed because I read about it. If I do not understand the concept of creating wealth, then there is no way I can be creative to find other ways to create wealth.
Thus, I decide to find out more about wealth creation. After a while, I finally manage to gain a little understanding in wealth creation. That is after I have attended a course on mind training. This course is supposed to help me to understand how my mind works so that I can be more in harmony with myself and relate better to other people.
To explain what I have understood so far, there is a need to understand what is money. Money is usually in a form of notes or coins. But have you ever wonder what is money? To a baby, a $1000 notes is just a simply a piece of paper to play with. He does not attach any value to it. Also, a coin is simply a piece of metal alloy toy. He does not have the concept of money at all.
Since I was once a baby, how come now I see these specially printed notes and coins as money and not just as papers and metal alloys? Apparently somewhere along my life, my perception of the specially printed notes and coins has changed. I have attached value to these printed notes and coins.
Changing my perception alone is not enough to make the specially printed notes and coins valuable as money. Other people must perceive the same set of specially printed notes and coins as money as well. For example, I can design and print my own notes and coins. I can treat these notes and coins as money. But if other people do not see them as money, then I will not be able to use my own notes and coins as money.
The situation changes if other people perceive the notes and coins designed by me as money. The notes and coins that are specially designed by me are now valuable. In that sense, I have created wealth from nothing.
That also explains why counterfeit money works. Counterfeit notes and coins essentially are just papers and metal alloys. But these fake notes and coins are designed in such a way that they resemble real notes and coins. Thus, people are misled to perceive the counterfeit money as real money.
Please note that I am not asking you to counterfeit money or commit any crimes here. Personally, I am against criminal activities. What I am trying to point out here is that the key to wealth creation is the ability to change the perceptions of other people.
For example, why does people buy lottery tickets? A lottery ticket essentially is just a piece of paper with a unique number printed. A piece of paper with a unique number printed is essentially a worthless piece of paper as perceived by people. How to create wealth from this piece of worthless paper? It just needs an idea to change people perception. In this case, by packaging and selling it as a chance to win a large sum of money, people perceive it as something valuable and thus willing to spend money to buy it.
In conclusion, I can create wealth from ideas, papers or anything as long as I change the perception of other people. To change the perception of other people, I will require selling skills to sell people the idea that it is valuable. Thus, Robert Kiyosaki highlights selling skills as an essential skill to achieve great wealth in the Rich Dad's series. Like it or not, I will have to take the first step to learn how to sell so as to achieve financial freedom.
* DISCLAIMER *
The author, publisher and distributors particularly disclaim any liability, loss, or risk taken by individuals who directly or indirectly act on the information contained herein. All readers must accept full responsibility for their use of this material.
Another way to create wealth is writing options. I can write contracts to sell or buy shares at a particular price that is valid for a period of time and sell the contracts for money. In that sense, I am creating money out of a contract.
But exactly what is involved in the process of creating wealth? So far I only know that I can create wealth by starting a company and getting it listed because I read about it. If I do not understand the concept of creating wealth, then there is no way I can be creative to find other ways to create wealth.
Thus, I decide to find out more about wealth creation. After a while, I finally manage to gain a little understanding in wealth creation. That is after I have attended a course on mind training. This course is supposed to help me to understand how my mind works so that I can be more in harmony with myself and relate better to other people.
To explain what I have understood so far, there is a need to understand what is money. Money is usually in a form of notes or coins. But have you ever wonder what is money? To a baby, a $1000 notes is just a simply a piece of paper to play with. He does not attach any value to it. Also, a coin is simply a piece of metal alloy toy. He does not have the concept of money at all.
Since I was once a baby, how come now I see these specially printed notes and coins as money and not just as papers and metal alloys? Apparently somewhere along my life, my perception of the specially printed notes and coins has changed. I have attached value to these printed notes and coins.
Changing my perception alone is not enough to make the specially printed notes and coins valuable as money. Other people must perceive the same set of specially printed notes and coins as money as well. For example, I can design and print my own notes and coins. I can treat these notes and coins as money. But if other people do not see them as money, then I will not be able to use my own notes and coins as money.
The situation changes if other people perceive the notes and coins designed by me as money. The notes and coins that are specially designed by me are now valuable. In that sense, I have created wealth from nothing.
That also explains why counterfeit money works. Counterfeit notes and coins essentially are just papers and metal alloys. But these fake notes and coins are designed in such a way that they resemble real notes and coins. Thus, people are misled to perceive the counterfeit money as real money.
Please note that I am not asking you to counterfeit money or commit any crimes here. Personally, I am against criminal activities. What I am trying to point out here is that the key to wealth creation is the ability to change the perceptions of other people.
For example, why does people buy lottery tickets? A lottery ticket essentially is just a piece of paper with a unique number printed. A piece of paper with a unique number printed is essentially a worthless piece of paper as perceived by people. How to create wealth from this piece of worthless paper? It just needs an idea to change people perception. In this case, by packaging and selling it as a chance to win a large sum of money, people perceive it as something valuable and thus willing to spend money to buy it.
In conclusion, I can create wealth from ideas, papers or anything as long as I change the perception of other people. To change the perception of other people, I will require selling skills to sell people the idea that it is valuable. Thus, Robert Kiyosaki highlights selling skills as an essential skill to achieve great wealth in the Rich Dad's series. Like it or not, I will have to take the first step to learn how to sell so as to achieve financial freedom.
* DISCLAIMER *
The author, publisher and distributors particularly disclaim any liability, loss, or risk taken by individuals who directly or indirectly act on the information contained herein. All readers must accept full responsibility for their use of this material.
Put Power In Your Passive Income Strategy
When I start talking to people about building a passive income business by following the teachings of financial freedom guru Robert Kiyosaki, I immediately hear about people's plans for buying real estate.
Anyone who has read the book Rich Dad, Poor Dad thinks that Robert Kiyosaki is all about investing real estate and buying rental or commercial property in order to achieve the financial freedom of their dreams. So, they instantly start putting all their money into real estate.
Reality check: That's not book's message. I try to listen patiently (after all I also believe that real estate can be a great investment vehicle), but the reality is you need a solid plan to achieve financial freedom, not a one off strategy.
Authors Robert Allen, Robert Kiyosaki, David Bach, and many, many talk about building multiple streams of passive income, that means having more than one investment vehicle, and making sure all those vehicles deliver passive income.
For beginners: passive income is income that comes in day in day out without you having to work to get it. Put simply, you are not trading hours for dollars. A true passive income business is one that if you were to leave it alone for a period of time, such as a year, you could return and find it more profitable (or at least generating the same level of income) as before you left. Passive income investments are the true path to financial freedom.
So what is the principle that Rich Dad truly talks about. He calls it the Power Investing Principle.
1 - Start a part-time business for the cashflow & tax advantages.
2 - When the market is right invest in real estate. (Now is not the time.)
3 - Invest your excess cash from the real estate in paper assets.
Unfortunately, a lot of people jump into step 2, real estate, without a lot of background knowledge about how to make that investment a lucrative one.
Here's a clue, the property needs to generate passive income (that means it should be putting money into your pocket not taking money out). Capital gains (betting on an increase in value) should be a bonus not your sole reason for buying.
One of the first steps in building a solid passive income plan is to identify how you plan to generate passive income. The plan should include a number of sources including businesses, real estate and paper assets. The reason for this is to create a stable platform on which to build financial freedom you need all the elements.
Now, lets go back to the power investing formula and look at number 1: Build a business. Why do you want to build a business first? Simple: businesses provide the financial backing (cashflow) to support real estate investing. Makes sense right?
While there are only three steps in the power investing principle, you need to take the time to understand the systems behind each one. For example, master the business building system then move on to the system for residential real estate investing.
Taking it step by step will lead to prosperity and reduce your risks along the way.
Anyone who has read the book Rich Dad, Poor Dad thinks that Robert Kiyosaki is all about investing real estate and buying rental or commercial property in order to achieve the financial freedom of their dreams. So, they instantly start putting all their money into real estate.
Reality check: That's not book's message. I try to listen patiently (after all I also believe that real estate can be a great investment vehicle), but the reality is you need a solid plan to achieve financial freedom, not a one off strategy.
Authors Robert Allen, Robert Kiyosaki, David Bach, and many, many talk about building multiple streams of passive income, that means having more than one investment vehicle, and making sure all those vehicles deliver passive income.
For beginners: passive income is income that comes in day in day out without you having to work to get it. Put simply, you are not trading hours for dollars. A true passive income business is one that if you were to leave it alone for a period of time, such as a year, you could return and find it more profitable (or at least generating the same level of income) as before you left. Passive income investments are the true path to financial freedom.
So what is the principle that Rich Dad truly talks about. He calls it the Power Investing Principle.
1 - Start a part-time business for the cashflow & tax advantages.
2 - When the market is right invest in real estate. (Now is not the time.)
3 - Invest your excess cash from the real estate in paper assets.
Unfortunately, a lot of people jump into step 2, real estate, without a lot of background knowledge about how to make that investment a lucrative one.
Here's a clue, the property needs to generate passive income (that means it should be putting money into your pocket not taking money out). Capital gains (betting on an increase in value) should be a bonus not your sole reason for buying.
One of the first steps in building a solid passive income plan is to identify how you plan to generate passive income. The plan should include a number of sources including businesses, real estate and paper assets. The reason for this is to create a stable platform on which to build financial freedom you need all the elements.
Now, lets go back to the power investing formula and look at number 1: Build a business. Why do you want to build a business first? Simple: businesses provide the financial backing (cashflow) to support real estate investing. Makes sense right?
While there are only three steps in the power investing principle, you need to take the time to understand the systems behind each one. For example, master the business building system then move on to the system for residential real estate investing.
Taking it step by step will lead to prosperity and reduce your risks along the way.
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