This question is probably the single most important question bearing on or connection with the subject of these forums. I would like to use the following article as a start to create the World's best set of rules on " How to get Rich". Clearly with the immense talent and resources available to us here nobody, is better motivated and battle termpered and tested to create and maintain the Rules. I envision a book that we all write containing the collective wisdom and research of the Fastlane members. This could be every bit as important a piece of literature as Sun TZU The Art of War or Napolean Hills' Think and Grow Rich. There are several Guidelines that we will follow and from which we will never deviate. As an example, each rule must be Morally sound, in other words no elements of scams/rip offs or hurting others to get ahead. Next each rule must be clear, easy to understand and immediately practical. Each rule needs to be tested in someway so that we know if applied the rule will work, not just theory or conjecture.
If this meets with the moderators pleasure and propose we start. If you want to be associated with the writing of and preservation for " The Rules of How to Get Rich", I suggest we drop the hanky and let the project begin.
Please write and inform me if this is a worthy ideal
Think
It's a sad fact that in this land of unbridled opportunity, with ample avenues for generating wealth, few people will ever get rich. There a many reasons for this. Some are valid reasons, others, merely excuses from the dissatisfied. Although many, especially those on the left side of the political spectrum, portray generating wealth as a zero sum game, with those receiving wealth necessarily taking it from those that have little, that's not the case at all. You can get rich while not riding on the backs of those less fortunate or industrious, but by creating a whole new animal on which to ride.
In this country it is relatively simple to retire rich. It is not however, as some (usually those that are trying to sell you something) would have you believe, an overnight process. That leads into one of the primary reasons why few attain wealth; lack of persistence. Too many folks simply don't stick with things long enough for them to be effective. I'll get back to the reasons people fail to generate or retain wealth later, now it's time for how to get there in the first place.
How to Get Rich #1
Generate multiple streams of income. Not only will this increase your income, but it will also protect it. Just as diversifying your investments mitigates risk, diversifying your income will guard against losing all of it. In this day and age of corporate downsizing and fiscal cutbacks, this is more important than ever. You can diversify your income in a number of ways, but some of the most popular and effective are starting your own side business and getting a part time job.
I'm much more partial to the business avenue. Another benefit is that you may find something you actually enjoy more than your current job, and eventually become quite successful at it. The problem is that too few people ever pursue income diversification, and of those that do, few have enough persistence to taste much success.
How to Get Rich #2
Invest regularly. This is common sense and really a no brainer. It's standard teaching from financial advisers the world over. While this advice is followed by far more people than the number that choose to augment their incomes by adding other income streams, it is nonetheless ignored by a significant percentage as well. If you ignore the principle of compounding interest, it will be tough to get rich or retire that way.
How to Get Rich #3
Avoid excessive consumer debt. People carry excessive debt and are not leveraging the debt they have to produce any income or asset appreciation. In addition, much consumer debt tends to bring with it very high interest rates. These interest payments will conspire to drain your financial resources. It is relatively easy for your consumer debt payments to reach a point where they negate any ability to contribute to your investments.
How to Get Rich #4
Educate yourself financially and take control of your finances. Far too many people are simply along for the ride when it comes to their finances, and many that take an active role in their personal monetary policy have insufficient grasp of how things work. This makes them not as effective as they could be at best, or at worst, they can be extremely decremental to their financial position. Few people have any formal financial training, and although some people take steps to learn on their own, statistics point to a frightening level of financial ignorance. Here are some of the statistics to which I'm referring:
A) A poll of mortgage holders by Bankrate.com found that 34% were unaware of what type of mortgage they have. Although recent publicity of the mortgage and credit industry problems may have lowered this number somewhat, it's mind boggling that it was ever so high.
B) A recent survey in the UK found that 79% of people did not know what the term APR meant, and 25% were unsure how much money they spent every week. I doubt the numbers in the U.S. are much different.
How to Get Rich #5
Reprioritize. People choose “living now†now over financial security. This thinking is especially prevalent with younger people, many of whom have a hard time imagining life when they are older. Take it from someone who had that same mentality; you'll most likely get there, and you won't be so happy with what you see in your retirement accounts. While partying, buying toys such as motorcycles, boats and Jetskiis, taking flying lessons, skiing 4 days a week, and traveling to fun and interesting places is definitely enjoyable, you need to balance the amount of resources you commit to such things against those that you target toward freedom later in life.
Having a good time, bonding with friends, and seeing the world should definitely be done, but balance that with your ability to enjoy life later. Retiring secure at 55 is a worthy goal, while working insecure at 70 is not. Sadly, most people aim for the former, but only do what it takes to achieve the latter
If this meets with the moderators pleasure and propose we start. If you want to be associated with the writing of and preservation for " The Rules of How to Get Rich", I suggest we drop the hanky and let the project begin.
Please write and inform me if this is a worthy ideal
Think
It's a sad fact that in this land of unbridled opportunity, with ample avenues for generating wealth, few people will ever get rich. There a many reasons for this. Some are valid reasons, others, merely excuses from the dissatisfied. Although many, especially those on the left side of the political spectrum, portray generating wealth as a zero sum game, with those receiving wealth necessarily taking it from those that have little, that's not the case at all. You can get rich while not riding on the backs of those less fortunate or industrious, but by creating a whole new animal on which to ride.
In this country it is relatively simple to retire rich. It is not however, as some (usually those that are trying to sell you something) would have you believe, an overnight process. That leads into one of the primary reasons why few attain wealth; lack of persistence. Too many folks simply don't stick with things long enough for them to be effective. I'll get back to the reasons people fail to generate or retain wealth later, now it's time for how to get there in the first place.
How to Get Rich #1
Generate multiple streams of income. Not only will this increase your income, but it will also protect it. Just as diversifying your investments mitigates risk, diversifying your income will guard against losing all of it. In this day and age of corporate downsizing and fiscal cutbacks, this is more important than ever. You can diversify your income in a number of ways, but some of the most popular and effective are starting your own side business and getting a part time job.
I'm much more partial to the business avenue. Another benefit is that you may find something you actually enjoy more than your current job, and eventually become quite successful at it. The problem is that too few people ever pursue income diversification, and of those that do, few have enough persistence to taste much success.
How to Get Rich #2
Invest regularly. This is common sense and really a no brainer. It's standard teaching from financial advisers the world over. While this advice is followed by far more people than the number that choose to augment their incomes by adding other income streams, it is nonetheless ignored by a significant percentage as well. If you ignore the principle of compounding interest, it will be tough to get rich or retire that way.
How to Get Rich #3
Avoid excessive consumer debt. People carry excessive debt and are not leveraging the debt they have to produce any income or asset appreciation. In addition, much consumer debt tends to bring with it very high interest rates. These interest payments will conspire to drain your financial resources. It is relatively easy for your consumer debt payments to reach a point where they negate any ability to contribute to your investments.
How to Get Rich #4
Educate yourself financially and take control of your finances. Far too many people are simply along for the ride when it comes to their finances, and many that take an active role in their personal monetary policy have insufficient grasp of how things work. This makes them not as effective as they could be at best, or at worst, they can be extremely decremental to their financial position. Few people have any formal financial training, and although some people take steps to learn on their own, statistics point to a frightening level of financial ignorance. Here are some of the statistics to which I'm referring:
A) A poll of mortgage holders by Bankrate.com found that 34% were unaware of what type of mortgage they have. Although recent publicity of the mortgage and credit industry problems may have lowered this number somewhat, it's mind boggling that it was ever so high.
B) A recent survey in the UK found that 79% of people did not know what the term APR meant, and 25% were unsure how much money they spent every week. I doubt the numbers in the U.S. are much different.
How to Get Rich #5
Reprioritize. People choose “living now†now over financial security. This thinking is especially prevalent with younger people, many of whom have a hard time imagining life when they are older. Take it from someone who had that same mentality; you'll most likely get there, and you won't be so happy with what you see in your retirement accounts. While partying, buying toys such as motorcycles, boats and Jetskiis, taking flying lessons, skiing 4 days a week, and traveling to fun and interesting places is definitely enjoyable, you need to balance the amount of resources you commit to such things against those that you target toward freedom later in life.
Having a good time, bonding with friends, and seeing the world should definitely be done, but balance that with your ability to enjoy life later. Retiring secure at 55 is a worthy goal, while working insecure at 70 is not. Sadly, most people aim for the former, but only do what it takes to achieve the latter
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