Tag: wealth plan

YOUR Wealth Generation Plan

This is another chapter in The Money System That Never Fails and finishes one of the most important parts of the book, your wealth generation plan. This section covers how to make it your own.

Remember, this is YOUR Wealth Generation Plan. Make it your own. While I provide my template and how I do it, change it up as you see fit. As long as you’re positively working on each of the four areas, to a lesser or bigger degree, then you will move in the direction you want to go.

The point of this plan is that you’re paying attention and working to optimize each area. Depending on where you are currently with your money, you have stronger and weaker areas. You also have areas where more can be done, and areas where you have less.

If you don’t make much income, and your expenses are high, then investing is not the most important thing for you to focus on now. Instead, it will be income and expenses. If you have a good income, and expenses are fine, then how you work with your savings and investing becomes much more important. Put your attention, action steps and goals there.

In a way, there is kind of a progression through this:

Expenses
Savings
Investing

Note that I do not include Income on this progression. That’s because it is the accelerator, regardless of everything else. Some people make tons of money and spend all of it and more. That’s the star athlete that lives big because of the million-dollar contract, but doesn’t have any money management skills.

Thus, the first step is to make sure that your expenses do not outstrip your income. This typically means cutting your expenses, as that is easier to do than earning more money (at least in most cases).

Once your expenses are under control, you start focusing on savings. Build up your savings. The best thing to do when you get a raise, or start making more income from anything else, is to not spend more, which is the natural human reaction. Instead, start saving more. Bump up your percentages or automatic investing.

After you’ve saved for some time, and start to have some real money, then you can start learning more about and participating in investing. There really isn’t any point in focusing on investing until you have thousands of dollars to do so.

With me personally, my expenses are managed well enough. I’m always tweaking the savings amount, working to move them higher and higher. Now that I achieved my big goal of buying a house, in addition to paying that off, I will work even more on the investing area, while still seeking optimization in all
others.

As such, this also means that all books about money tend to cover one or more of these areas. Besides what you’re reading now, I haven’t found many that talk about all of them, at least not with this same kind of clarity.

Where you are at will determine what you should additionally study. In consumer debt? Something like Dave Ramsey, where he talks about cutting out the lattes might be appropriate. Looking to grow your investing? That same book is likely not going to be so useful.

Wealth Generation Plan Review

I like to do this monthly. Other people, who aren’t quite as hands on with their finances, might be fine to just do it once a quarter. At some point, I’ll probably switch to that, but currently, I like to review it monthly, even if I don’t make any changes.

Reviewing your wealth plan means reading through it and doing the following:

Updating your strategies as needed
Crossing off To-Do’s and adding more, or changing as necessary
Crossing off Goals and adding more, or changing as necessary
Updating savings percentages and automatic saving/investing amounts
Updating any other details that need updated

If you do this, it means you’re constantly updating what you’re doing. Hopefully, you’re learning along the way, including from any financial mistakes, and thus you’ll get better over time. This plan is not a set-in- stone document, but something to evolve along with you. Over time it will be what gets you to wealth, hence the name.

In NLP, one of the maxims is that “There is no failure, only feedback.”

That’s why I call this The Money System that Never Fails. It’s not that you won’t make mistakes along the way. Or that you won’t learn new better things that can make this work better. It’s just that you follow the plan, and adapt the plan along the way.

Ultimately, it is this framework for a plan, covering the four major areas of money, that is why it is a
system that won’t fail. The only way for it to fail to work, is for you to fail to work with it.

For more The Money System That Never Fails is now available in paperback and Kindle at Amazon.

If you missed the first chapters you can view them here:

Offense – Income & Investments

This is another chapter in The Money System That Never Fails and continues one of the most important parts of the book, your wealth generation plan. This section covers the “offensive side” of the financial equation, with income and investments.

Income

In this section, and the ones to follow you’ll want to briefly write out your strategy in regarding that area. So, we start with your Income Strategy. How is it you’ll work on growing your income? For instance, for this year mine was:

Work on growing income daily through my main and side sources. A specific focus on building my salaries and distributions through businesses.

Write down all your sources of income. There may be only one, a paycheck, and that is fine.

There are a couple of ways you can look at this. One of the early books about money I read was Robert Allen’s Multiple Streams of Income. This idea is that you should have lots of money coming in from different sources.

On the flip side, there can be a drawback to scattering your focus. If you have just one much larger income stream, an income river if you will, it can be better than lots of trickling streams.

Adapt the template as you see fit. Include your main personal income stream(s). Write down any side streams you may have available to you. This can include selling stuff at garage sales, on eBay, or a moonlighting job you do. (Years back whenever I needed extra cash, I would unload various info-products and other goods on eBay.)

If you’re in business for yourself, include those income streams too. The distinction between this is what puts income into the business’s pocket, versus your own. If you’re not familiar with this distinction (and I wasn’t for many years), that will be covered more later.

Next, you have the To-Do section. Are there certain next action steps you should do to increase your income? This could include asking for a raise, or setting up a side hustle. What new streams of income might you be able to add? Lots of options abound.

Lastly, here you can go into more detailed goals, specifically about your income. More me, this involved increasing my salary from each business, as well as to setup a new business income stream (as an entrepreneur, I like to set up new things).

Investments

Remember, start off with your strategy. Here is an example of mine with investments:

I invest primarily for cash flow. My primary investments are my businesses, as that is where I can see awesome returns. But what is covered below is those hands free investments and storehouses of value. Buy a house before I start focusing more on investing. For each thing, figure out my Entrance and Exit Strategies, as well as any Risk Tolerance that must be figured in.

Remember earlier where I mentioned the difference between passive and active investments? Once again, passive investments don’t generate income. They may appreciate in value (or depreciate), and can then be sold, but they’re not actually building your income.

Meanwhile, an active investment does generate income. This could be a business that pays returns,
dividend stocks, bonds, even a savings account (however small that return is). It is really the active
investing part, or as I mention investing for cash flow, that gets investments put on the offense side of the money game.

Here, you will list out both active and passive investments you have. With the active investments, you can write the rate of return they generate. Write in how much of your income is transferred into these accounts, or whether they come from specific savings accounts.

And as before, write out any action steps and goals you have in this area.

For more The Money System That Never Fails is now available in paperback and Kindle at Amazon.

If you missed the first chapters you can view them here:

Your Wealth Generation Plan

This is another chapter in The Money System That Never Fails and starts up one of the most important parts of the book, your wealth generation plan. This “living” document was what turned around my finances for good.

I don’t remember who I got this from specifically, or if it even was from anyone in particular. It may have been from reading the 30+ books, and I came up with this idea myself. If you’re making a road trip, you better have a plan on how to get there. Sure, GPS is prevalent these days, but you still need a destination. Similarly, a good business will have a solid business plan, whether or not it is in the standard business plan.

And so it is to be with your money. The Wealth Generation Plan is your plan of action to cover each of the four areas of money: income, savings, expenses, and investments. It covers goals, action items, savings percentages, guidelines and more.

You can find a template for this here.

If you don’t want to use the template, then open up a word processor document and title it Wealth
Generation Plan. Under that write Last Updated: Today’s Date.

Creating a vision of your wealth is an important step. This topic will be covered in detail in an upcoming course, using what I call The Fractal Time Binding System (working title). For now, as you are writing your wealth plan, envision where you’ll be one year from now regarding wealth and money. Write out a paragraph or so that describes what you do with your money and how you feel about it.

For example, here was my vision for 2017:

My wealth has accelerated with ease. I continue to work and tweak my plan and with it in action. I generate more money and expend about the same (though more to charity). Mostly, I save lots and grow my investments, and so the cycle repeats. My skills in each of these areas has grown as the figures grow bigger too. I run my businesses with better accounting and both the business and personal books show it. Funds shifted in order to put a down payment on a house, yet the numbers caught up and exceeded those.

I do this exercise around the end of the year, in December, to get ready for the upcoming year. It’s far from a New Year Resolution, but instead a lengthy and far more effective process. Still, you can do it at any time. If you do engage in something like that around the New Year and right now it’s June, go ahead and create your vision and goals for the rest of the year.

Now that we have a vision, what are your goals? Would you like to have a certain net worth? Get out of debt? Save a certain percentage of your income? Make a certain amount passively off of investments? While these and similar questions may be covered in the vision, I see a goal as something more specific that you can say is achieved or not achieved. (There is also a net worth calculating spreadsheet inside the templates.)

You’ll notice that my vision is more feeling based. Although there is talk of bigger numbers, it is devoid of any real specifics. When it comes to goals they must be specific. Without giving you specific numbers, here were my main financial goals in 2017:

Buy a House
$XXXXXX Net Worth
Personal Income baseline of $YYYYY/month
Regularly save 50% of income
Make $ZZZZ off of passive investments

(Note: I tend to be aggressive in my goal setting. I realize I do this, and often fall short, but it keeps me moving in the right direction. At the time of writing this (in December of 2017) I have hit two of these goals.)

While it can be fun to imagine having a million dollars cash a year from now, if you’re under a pile of debt now, making minimum wage, please be a bit more realistic with your expectations. You want your vision and your goals to be motivating and drive action, not demotivating, fanciful dreams.

Write down three to six goals having to do with money. You might think about each of the four categories. What is your goal for your income? What is your goal for your expenses? What is your goal for your savings? What is your goal for your investing?

The vision and the main goals is the first page of your Wealth Generation Plan. At a quick glance, you can see everything. Then, on the following pages, we go into more detail about each of the four areas of money. Each one of these is then contained on one page.

For more The Money System That Never Fails is now available in paperback and Kindle at Amazon.

If you missed the first chapters you can view them here: