Is accumulating wealth as easy as following a 3-step plan? Yes it is and no it isn't. As with many things in life, accomplishing a goal such as accumulating one million dollars (or even $100,000) depends on your desire, your personal choices and your daily actions.
Let's start with one example on how you might miss this goal. One of the first components of successfully meeting any goal is to have the desire (or a compelling reason). You've probably thought about losing weight, running a marathon or accumulating a great deal of wealth.
However, the 'want', 'wish', 'dream' or 'thought' is often not enough to propel you to take continuing action steps to successfully attain your goals. Even if you take the first action step, your ability to sustain enough motivation to meet your goal may soon disappear after a few months or possibly after a few days. Until you create and internalize a 'compelling reason' (true desire) to meet a specific goal, it will be difficult to meet your goal. You have to make this desire a 'must-have' instead of just a 'want'; you need a compelling reason to meet your goal. You need to create a true desire.
The simple part of accumulating wealth is many people have already succeeded in meeting their wealth accumulation goals. I have personally accomplished my net worth goals on two separate occasions and in 3 years I expect to reach my next net worth goal. I started with a net worth of a negative $10,000, mostly consisting of personal credit card debt. Meeting my net worth goal wasn't easy; but I created a compelling reason, made some personal financial choices & took specific, daily actions to make these goals.
Many other people from all walks of life, with all types of educational backgrounds are also very successful in meeting their net worth goals. Since it has been done many times before, setting and making your own personal wealth accumulation goal can be very attainable.
Let's say you determined that accumulating a $100,000 net worth is one of your personal goals. If you've created a compelling reason (a true desire), then you're ready to proceed forward to accumulating $100,000 and probably, much more. If you've not made it a 'must' goal and you are still only dreaming about accumulating $100,000, then you're not ready to start. You're not ready to take the second action step. This first step is critical - you must have a "compelling reason" to make your goal.
Anthony Robbins has made a living by proving that success starts with a strong desire. Check out a product review of his latest - Get the Edge program at www.your-key-to-success.com.
Ok, let's say you have now created your own personal compelling reason to attain your goal. You're ready to get started with the second action step. What are the key elements in meeting your wealth-accumulating goal?
1. Your income must exceed your expenses
2. You will invest your excess funds
3. You will be patient and let the magic of compounding work
1. Your income must exceed your expenses: This is a simple mathematical statement. However for many people, this is the most difficult step to overcome on a consistent basis. It is all about your choices. If your income does not exceed your expenses, you have to make a choice. You will need to cut your expenses, increase your income or if you are really ambitious and have that 'compelling reason' to accumulate wealth, you'll choose to do both.
In my personal situation, I focused about 70% of my energy on cutting expenses & 30% on increasing my income. I decided to spend less on clothing, entertainment, dining out and I also cut coupons to help reduce grocery bills. I decided to live within my personal financial situation. I decided to spend less than I earned. Remember, you have a choice.
A. Do you have a compelling reason & discipline to accumulate wealth?
OR
B. Do you lack the discipline and have an immediate gratification need so strong that to satisfy your need, you need to purchase the newest fashion, go to all the home football games, dine out 4 nights a week, etc? It's all about choice.
2. The second step to accumulating wealth is to invest your excess funds. You need to invest your excess funds to meet your personal financial goals. Investments can range from real estate, stocks & bonds, CDs or possibly investing in a small business. Whichever route you choose, create a systematic approach to investing, change direction if necessary, but don't stop.
Investment diversification is important to help ensure that you can ride through the normal up-and-down cycles of the stock market or the real estate market. Personally, I started with investing in a 401K, then stocks and bonds and eventually real estate. While other young people decided to spend all their weekly paycheck, I made a choice to first, put a few dollars away each week into a 401K and other investment vehicles. I 'paid myself' first and then I spent money on the other entertainment activities. See some of the investing books at the end of this article.
3. The last step is the magic of compounding. You'll often hear the phrase, "The rich get richer." While this phrase can mean different things in different situations; in the context of compounding it has a major impact. Let me share a few examples on how you can accumulate $1,000,000, based on average investment return of 10% (stock market average).
Let's say you are 40 years old and you have $20,000 to invest. To accumulate $1,000,000 by the age of 65, you would need to contribute $567 per month.
If you're 30 and have $5,000 to invest, you'll need $218 per month to reach $1,000,000 by age 65.
Let's say you are only 20 years old and you have no money to invest. You can start with absolutely $0 and still only have to add $94 per month to reach that same $1,000,000 goal by age 65.
Wealthy individuals understand the benefits of compounding. Here are examples that show how the rich get richer.
A. If you have accumulated $10,000 and your investments yield a fantastic 20%, you will have earned $2,000 for that year.
B. If you have accumulated $100,000 and your investments don't do as well and you only earn 10%, you still outpace the person with only $10,000 and you'll earn $10,000 for the year.
C. OK, let's say you met your goal of accumulating $1,000,000 and your investments do even worse at 3% for the year. You will still make over $30,000 for the year. If your investments performed well (10%) you will have made an unbelievable $100,000 for that year.
There it is. The 3-step plan for meeting your own personal wealth accumulation plan. Whether it's $100,000 or $1,000,000; you have the potential to attain your personal wealth accumulation goal as long as you have a compelling reason (a true desire), you make the right personal choices and you take daily actions towards this goal.
Is it easy? - Not necessarily
Is it possible? - Absolutely yes!
Take Action Today!!
First, set aside 30 minutes or 3 days and create a compelling reason to set your own personal net worth goal.
Then, set a specific net worth goal for 3 months, 1 year, 5 years and 10 years. Not sure what your goal should be. It doesn't matter right now. Just set a goal and change it as needed - you'll probably change it upward.
Next, take $10 out of your wallet or purse - TODAY - and deposit it into your new "Wealth Accumulation" account. You've just now taken the first steps and are now on your way to meeting your goal. You'll be amazed at what you can accomplish!
To start your wealth building education, there are many great books on the specific subject of accumulating wealth and you can search your local library as an inexpensive and resourceful first action step. In addition, check out some of these titles listed below. You can find these titles and many more online at Amazon.com, Books-a-Million or Barnes & Noble.
The Automatic Millionaire, The Finish Rich Workbook, Smart Couples Finish Rich, Smart Women Finish Rich - by David Bach
Multiple Streams of Income, Creating Wealth, One Minute Millionaire - by Robert Allen
Rich Dad Poor Dad, Rich Dads Guide to Investing, Own Your Own Corporation, Rich Dads Retire Young Retire Rich, Real Estate Riches - by Robert Kiyosaki
The Laws of Money, 9 Steps to Financial Freedom, The Road to Wealth, The Courage to be Rich - by Suze Orman
The Truth about Money, Ordinary People Extraordinary Wealth - by Ric Edelman
Secrets of Six Figure Women - by Barbara Stanny
The Savage Truth on Money - by Terry Savage
The Only Investment Guide You'll Ever Need - by Andrew Tobias
The Millionaire Next Door, The Millionaire Mind - by Thomas Stanley
The Intelligent Investor - by Benjamin Graham
About The Author
Mike Matthews is a writer with many personal successes in the areas of small business, personal finance, real estate investments and reaching fitness goals. He writes informative articles and conducts honest product reviews with a focus on the four main areas outlined above. His articles & product reviews can be found online at, http://www.Your-Key-to-Success.com. His book on 'Taking Action - Your Key to Success' is due out in 2005.
feedback@your-key-to-success.com
![]() |
|
![]() |
|
![]() |
|
![]() |
They are the object of thinly disguised envy. They are... Read More
Have you ever asked yourself what your highest income producing... Read More
Any successful person, or any anyone interested in self improvement... Read More
Yesterday we learned that 74% of all wealth is created... Read More
An ellipsis to your success is hidden in the word... Read More
Most accountants, financial planners and wealth-building experts agree that there... Read More
There is no need to use the many middleman websites... Read More
As you know, we're now well and truly in theInformation... Read More
Uncle Sam and his band of merry-men, better known as... Read More
This is a true story about a homeless man from... Read More
So you want to become wealthy? While there is no... Read More
Not Enough Money?I believe that most people haven't got enough... Read More
In most societies, we are raised to believe in the... Read More
The inability to come up with the necessary cash when... Read More
You know about compounding right? You understand what pyramiding your... Read More
Look at Forbes' top 10 United States wealthiest people. Notice... Read More
You've been thinking that your financial life could probably be... Read More
SCENE 1: Pharaoh has just woken up from a very... Read More
When you purchased your home, you most likely got a... Read More
What is "The Commodity of Kings""Power is simply "the ability... Read More
Very few people whom I know are familiar with the... Read More
I am often amused by the ads and offers I... Read More
Whenever we read about building wealth or even attend a... Read More
It is sometimes pitful how many projects are never born... Read More
Money is probably the most challenging thing for many people... Read More
I recently came across startling figures about the average American's... Read More
There once was a hawk, ferocious and swift. He was... Read More
Points to ponder as you consider what can be done... Read More
From tender age, we were exposed to myths about money... Read More
What if I were to tell you that almost everything... Read More
Financial freedom is the power to do what you will... Read More
We talked recently about the wealth formula:Spend less than you... Read More
Financial independence is having the freedom to support yourself through... Read More
The idle are a peculiar kind of dead that cannot... Read More
Whenever we read about building wealth or even attend a... Read More
It is sometimes pitful how many projects are never born... Read More
Let's begin this lesson with a definition of the term... Read More
As someone who loves to shop, enjoys holidays and owns... Read More
"If you know how to spend less than you get,... Read More
Now is a great time to make it a habit... Read More
My First Million took me exactly 27 months to achieve.... Read More
Building wealth is as simple as saving a little bit... Read More
When Building Wealth by Russ Whitney was released a few... Read More
At any time in history, no matter what the current... Read More
I counsel a LOT of people about money. I see... Read More
Living on credit is fashionable. Indulging oneself is fashionable. Saving... Read More
There are plenty of people who are in love with... Read More
Uncle Sam and his band of merry-men, better known as... Read More
Compounding: The Ninth Wonder of the WorldBy Nicola Cairncross Compounding... Read More
Time and time again entrepreneurs are losing out on getting... Read More
In his best selling book, "Rich Dad, Poor Dad, Robert... Read More
Financial planning often gets a bad rap. Part of the... Read More
"My people are destroyed for lack of knowledge." Hosea 4:6... Read More
Although there are advantages to selling other people`s products and... Read More
When I was a student in London, I had a... Read More
The vast majority of working people are in debt. The... Read More
Have you seen a picture of the Parthenon in Athens,... Read More
There could not be a better time to mull over... Read More
We will start the Financial Fitness System with the assumption... Read More
No one has complete control over their thoughts. But with... Read More
Very few people whom I know are familiar with the... Read More
I want to share an experience I had in common... Read More
Simple tips on saving can very often make quite a... Read More
The inability to come up with the necessary cash when... Read More
You've been thinking that your financial life could probably be... Read More
Money can be your servant or it can be your... Read More
Wealth Building |