by Dr John Demartini

WEALTH

Six steps to building wealth

Dr John Demartini 00038.jpg

Everybody has a set of priorities, a hierarchy of values, things that are most important to least important in their life. Whatever is highest on your value, you are inspired from within to fulfill. All of us have a selective biased attention and a selective biased retention and a selective biased decision-making process based on the hierarchy of our values. We don’t see opportunities on the things low on our values and we don’t act on them.

The hierarchy of your values dictates your financial destiny. It is the number one factor out of everything that I have studied in economics. There is nothing higher in priority than the realisation of that.

If a person has a hierarchy of values that goes like this: ‘children, children’s education, children’s clothes, children’s entertainment, children’s travelling, house, furniture, care, socialising, shopping for the house, shopping for the kids, shoes, shoes, shoes, shoes, shoes, shoes; then whenever money comes into their life, it will be spent exactly according to the hierarchy of their values.

A person with that value system will never have an accumulation of wealth because they will have more months at the end of their money than money at the end of the month.

I know people who spend a vast fortune on education but they never turn it into cash. I know people who spend a vast amount of money on their fitness but they never turn it into cash. You have to have a value on cash, wealth, to turn it into that. People who value wealth, take a portion of whatever they make and put it into savings and investments. People who don’t, take their money and put it into whatever they value. Most people buy depreciable and do not invest in appreciable.

I found six things that help raise money on your value list because unless you have a value on building wealth, it is not going to happen. You may have heard the statement, ‘when the why is big enough, the hows take care of themselves’. Unless you have a big enough ‘why’ for doing something, you are not going to do it.
So let me give you six stepsto help you make wealth go up on your values. I guarantee you that if you do these six things, your wealth potential is going to go up.

1. Have the dedication to build a business and serve people
Ask yourself a simple question. ‘How is building a business serving ever greater numbers of people, going to be of service, benefit and value to me as an individual?’ If you do not have a dedication to building a business and serving people, you won’t do it. The benefit of doing that has to exceed the benefit of doing other things. In the hierarchy of your values, every decision you make is based on whatever you think will give you the greatest advantage over disadvantage, greatest reward over risk. If you do not have a higher value on building a business that serves an ever greater number of people, than the moment you have time and energy, you may go shopping or read a book or spend time with friends but you will not be likely to use your time to build a business.

So you have to stack up the benefits, the reasons why, and you have to have a big enough ‘why’ for doing it to override the expenditure of the money.I don’t know of anybody who is vastly fortunate who doesn’t have a value on building a business. Unless they inherited it and their parents did. One of the individuals who lives on the ship that I live on, owns a transport company, one of the largest in the world. If you talk to him, his most favourite conversation is about building his business. His business is what he focuses on. You can start a conversation about anything else and he will bring it back to business. Just like if you start a conversation with me, I will bring it back to human behaviour.

Many people, when they think of the benefits of building their wealth, they immediately think that if they were wealthy, they could buy that, they could live like this, they could spend this. Those people will never be wealthy. That is not the mindset that will build wealth; that is the mindset that will spend it.

If I asked you to write down 25 benefits of being wealthy, 99% of people will write down ‘I can live a better lifestyle. I can live in a better house, I can travel and have better clothes.’ That is a consumer mentality. 1% would go, ‘if I had an extra million or
5 million I would be able to invest in properties, I would be able to buy some stocks. I would be able to go and build my business, I would be able to go and infuse money into my business and grow my wealth.’ They have a value on building it.

2. Value your saving
Ask yourself another question. ‘How will saving an ever progressive amount of profits, be of service, benefit and value to me?’ You have to value your saving. If you never save, you will work your whole life for money. If you begin to save, your money will begin to work for you. People who work for other people, who never save, pay the most taxes and stay broke. People who begin to save, get to a middle class. People who save and then know how to invest and build a fortune, use other people’s money to make the most money and pay the least taxes. You pay less taxes on the money off your investments than you do by working. So every dollar that you use for immediate gratification costs you more than a dollar in your long-term vision.

You may want to invest rather than save. I am a firm believer that first you save, then you invest and then you speculate. When you are living according to your highest values, you are inspired from within. When you are living according to your lower values but expecting results of having a different set of values, you beat yourself up. When you beat yourself up, you feel pain, you feel unfulfilled. You lower your self worth. When you do, because of the pain, you have the desire for a quick fix, quick pleasure, and immediate gratification. You are vulnerable to addictions and quick get-rich schemes. Investors think longer than that.

First you build a savings to build a cushion to reduce the volatility and to stabilise your primary business. When you have liquidity, as you build some wealth and start to accumulate some savings, the quality of your clients goes up. The volatility of your business goes down. The associations, opportunities and ideas you get go up. Plus you gain compounding. Plus money goes where money flows. You also start to pay taxes to get you ahead. And the psychology of knowing you are making progress gives you encouragement.

3. Manage money wisely
When you start to manage money wisely, you receive more money to manage. It is not how much money you make that counts. It is how you manage what you make that counts and the hierarchy of your values dictates how you manage it. Once you start to have a value on money, you will start saving it and it will start growing. Until then, it is not likely to occur.

Every quarter, stop and write down everything that you are doing. Look at how much time you spend and how much your time makes per hour or minute. See if you can’t shed 10, 20, 30, 40 or 50% of that and hire somebody to release the lower priority things that are burdening you, lowering your self image and get on with doing what is most inspiring to you that you are more masterful at, that produces more income in less time. Every time you do that, you increase your savings. If you increase your savings every quarter, when you do that exercise, no less than 1%, preferably 10%, the amount you save, will double every two years, minimum. When you create a bigger demand on yourself because of the savings, you attract a bigger supply to yourself.

4. Master the art of investing
People who love investing love the game. They study the game. They get serious, they apply it and they practice it. The difference between an amateur and a professional is that the amateur performs at the performance. A professional practices in between their performances. So work out how investing will be of service, benefit and value to you.

Once you have savings, you have liquidity and you have a cushion. Remember what Warren Buffet says, “rule number one with money is don’t lose it. Rule number 2: don’t forget rule number one.” An investor is somebody who does enough of the math to calculate that it is going to be in their favour. They are not speculating, they are not gambling, they are making sure that the numbers work on their behalf. They are patient, waiting for the right investment, not impulsive, not emotional. Warren Buffet said that until you are ready to manage your emotions, don’t expect to manage money.


5. Choose an amount of wealth scaled to your vision and your dream
If somebody says I want to live a lifestyle that is worth a million a year and the average return is 6%, that means that they need 16.6 million saved, getting 6% plus 5 or 6% inflation on top of that to sustain that lifestyle, otherwise it is a fantasy. It is not an arbitrary number; it is a very specific number. People who know where they are, who know exactly what their assets and liabilities are and have a clear goal and a strategy on what it would take to get there, are more likely to get there than people who have a fantasy about what it is going to be, who don’t know where they stand and don’t have a strategy or a motive for fulfilling that strategy.

You have to have a drive for fulfilling the strategy and then you need a strategy. Strategy without a motive is less important than the motive because you will get the strategy. When the ‘how’ is big enough, the ‘how’s’ take care of themselves.

There is no reason why we can’t expand and explode with possibilities, financially. First you may want to get the lifestyle you want. But I assure you that people who get the lifestyle they want, they stop and they plateau, they are unfulfilled unless they move onto the next cause and there is no end to the cause. If you build wealth, you want it to go beyond just you and maybe your immediate family because that is finite, very limited. The greater your wealth, the greater your influence.

6. Have a bigger cause
Ask yourself, what is the benefit, value and service to me of creating a legacy of wealth, acquiring such a fortune that I live a legacy with it, a contribution back to the world? You will accumulate more wealth if you have a bigger cause. Let me give you an example here. Let’s say you have zero money and you have the opportunity to earn a dollar. When you have zero money, the value of the dollar is a 100 %. If you accumulate $10, the value of a dollar is not 100%, it is a tenth, 10%. If you accumulate $100, the value of the dollar becomes 1%, an additional dollar, 0.1%. A $1000, 0.01%.$100 000, 0.001%.A million, 0.001%. So as you accumulate wealth, the value of the additional dollar goes down.

Wealth will only occur if you value it. What I have given you is a guaranteed science of raising its value on your values list.
www.DrDemartini.com

 

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