Tag: Trading
2 Laws for Generating Wealth
Jason 0 Comments Retire Wealthy
Any successful plan to generate and sustain
sufficient wealth must incorporate two very basic rules: 1) Generate Investible Savings. The first step to unlock the path to building
tremendous wealth is not about investing at all. It is about generating Investable assets. For most people this begins by terminating
any expensive debt such as credit card or high interest debt. The reason being that expensive debt increases
one’s expenses and eats into investable resources. Second step for most people is redefining
certain parts of their remaining income as compulsory payments that must be done. That payment is, in fact, the first step of
savings for investing. The third step for most people is to invest
time and entrepreneurial energy to increase their gross income. Getting a better job, a promotion, a new skill
or starting a business that can generate profits disconnected from your immediate personal
labor resources. The fourth step would be establishing some
kind of an emergency fund and getting sufficient insurance to cover yourself against unpredicted
expenses. When the four steps are done, you can start
generating sufficient investable assets that can be put to work growing over a minimal
period of five years.
When this is done, you can proceed to the
next rule. 2) Invest investable savings into exponentially
growing assets, growing for many years while limiting the taxes you pay. Once you generate investable assets and are
ready to put them to work, comes the next tough question: Where should I deploy my investable
assets to maximize my investment and to generate more wealth? You should know that any and all investable
assets you will ever encounter can belong to one or another of these two categories:
Exponentially Growing Assets or Regular Growth Assets.
If you ever hope to generate sufficient wealth
from your investable assets, you must learn how to separate your exponential growing assets
from your regular growth assets and then make sure you are sufficiently exposed to the exponentially
growing asset class. Exponentially growing assets are a rare creature
few understand, even among seasoned investors. There is a set of strict rules to become eligible
for the coveted title: A) At their very core, they must yield very
high returns on internally invested resources and expenses – such as inventory, labor, plant
& factory or R&D; What sets exponentially growing assets apart
from any and all investable assets is their ability to make a large profit on a small
base of required resources. The more expenses and investments one needs
to make a profit, the less profit is left to increase the value of the asset itself. B) They must have sufficiently large market opportunities
ahead of them to enable many years of sales growth displaying high returns on invested
resources; While many possible assets can generate high
rate of return, exponentially growing assets are not a one-off occurrence or limited activity
and must be able to maintain their course of growth over many years to build sufficient
appreciation for their owners.
C) They must provide extensive internal reinvestment
opportunities to use profits at similarly high returns To really become an exponentially growing
asset capable of building imaginary amounts of wealth, the asset must provide managers
the ability to use the rivers of cash generated regularly from the asset in a similar high
rate of return. When these criteria aren’t met, owners soon
realize the resulting rivers of profits do not grow at a high rate and the growth in
wealth soon slows down due to the ever-growing profits invested in lower rate growing assets.
D) They must be led by honest, high integrity,
talented managers, who are actually risking their own wealth alongside their investors. For these executives, a small increase in
the share price will generate much greater wealth than any increase to their paycheck. Executives of public companies have the ability
to loot the company’s coffers or engage in wealth destruction in an infinity of ways. To avoid that, check to see how large your
CEO’s stake in the company stock is before choosing any investment.
As long as the company still embodies the
4 rules that we covered here, you stay invested; this is the one last requirement when investing
in exponentially growing assets. ALL exponentially growing assets see their
stock price cut in half several times during the decades, usually due to different parameters
that don’t reflect the actual company value. Holding these assets through turbulences,
and even adding to them, requires temperament and familiar understanding of the business,
which results in the conviction to stay the course..
Climbing the Wealth Pyramid: From Rich to Ultra Rich Lifestyles
Jason 0 Comments Retire Wealthy
did you know that there are billionaires that most billionaires can only dream of becoming you might be surprised to learn that not all billionaires are equal while some own businesses and corporations others own Industries and even countries once you understand this you will realize that the difference between these levels of wealth is quite staggering in this video we'll be exploring the levels of wealth and what life is like at each of these different levels we would also delve into how the ultra Rich spend their money including some of their most bizarre and extravagant purchases chapter 1 wealth in perspective so what is a billion dollars say you earned one dollar per second it would take you about 11 and a half days to make one million dollars now to make one billion you would need to earn that one dollar for over 31 and a half years so while it is very easy to think of wealth in terms of rich or poor it simply is not enough wealth classification is broader than that to begin with there is a huge difference between what a millionaire can do and what a billionaire can do worthy of note is the perspective of price which in turn feels relative to how much you earn let's compare someone earning fifty thousand dollars a year with someone earning 500 million dollars a year you see that is ten thousand times more the average guy spending thirty dollars is equivalent to the billionaire spending three hundred thousand dollars on a Lamborghini similarly a 10 million dollar piece of art would feel like one thousand dollars the difference here is that these purchases would feel so major to the average guy but to a billionaire it is not chapter two levels of wealth now let's put these guys on different levels let's see just how wealthy one can be starting at the bottom of the food chain is the top one percent we know you already had an idea of what the one percent is but give us a minute this phrase has been synonymous with being extremely rich for so long that to think otherwise seems unnatural so what is the one percent when your income is over about five hundred thousand dollars a year you would technically be considered a part of the top one percent of worldwide earners but if you are in this category you will quickly realize that you are not as rich as you think you can usually afford a nice house and a flashy car but those things come at an even higher cost to maintain and if you are working a full-time job you would feel even less financially secure this is actually why after this level wealth starts being measured in net worth rather than income the guys in the next levels of wealth don't earn their money from a salary it's mostly a case of more wealth and more assets the next level of wealth would be the guys with a net worth of 10 to 30 million dollars you can live comfortably at this level because all your needs are met easily you have a really nice house you would fly first class international only be able to book a two thousand dollar Suite when you feel fancy and most importantly no random financial situation can disrupt your life and status but at this level you still have to be smart about big decisions and in the banking world you will definitely not be classified as an ultra high net worth individual which of course brings us to the next level the guys with a net worth of 30 million to 100 million dollars if you get to this point you can kind of rest easy you are now playing in the big leagues what does this mean with a huge stake in a very large company five-star hotels and multiple Villas in Santorini Dubai or the French Riviera you probably wouldn't even mind that you would be spending about twenty thousand dollars per night you can also afford to pay for ease you know you have people running around at your every whim you have assistance for everything they take care of your schedule and stay on top of your appointments now when it comes to appointments and meetings you barely spend your time with people who do not matter whether you like it or not your Social Circle has evolved you now have access to the most influential people in business entertainment and politics but of course there is a downside to always being surrounded by other super rich and influential people the danger is you might start to feel like you do not have enough you may soon realize that you're new for sorry is not all that because your friend got himself a limited edition version you might return home from dinner with a congressman to find out that your billionaire friend just had dinner with the president it is something of a slippery slope if you get to this point you could either fall off in an attempt to achieve more or actually unlock the next level and that is the net worth of 100 million to a billion dollars to get to this level you definitely have ownership or control of a well-known company almost any experience you can dream up you can have say you feel like playing golf with your favorite golf player all you would have to do is tell your people to call his people at this level you can afford the most bizarre things on the planet like a 24K karat gold toilet a limited edition pen worth over two million dollars with nearly a thousand diamonds engraved on it all this luxury and yet you are still not at the final level chapter 3 the billionaire level now let's talk about the big guys the very few people who have built a net worth of a billion dollars and above if you study all the rankings like the Forbes list you would see that the very top 25 billionaires have more wealth between them than the poorest 50 percent of the entire world oh wait you never considered this we will get to that in a bit for now let's visualize the life of the billionaires we know about Elon Musk Jeff Bezos Bernard Arnold Mark Zuckerberg Bill Gates these names are fixtures on the Forbes list they can buy anything on this planet literally anything say a private island with a standby yacht to get you there whenever you want yes we have spoken about luxurious items and experiences but at this level it is a whole new world at this level you can buy access to almost anyone on the planet a billion dollars would also get you respect and even influence you can influence big changes in the world make an impact through philanthropy and charity you can clean water for villages in Africa fund new hospitals save endangered species and so on most interestingly you could afford to buy time your time is precious to you so thankfully you can afford to pay for Speed and ease no waiting in lines or sitting around according to Forbes there are 2 640 billionaires in the world do you think there are more would anyone go out of their way to hide just how wealthy they are share your thoughts with us in the comments like this video if you have enjoyed it so far subscribe to the channel and hit the notification Bell so you don't miss any upcoming videos like this chapter 4 the billionaire you do not know about what if we told you everything you've been told about billionaires is just one big lie it might surprise you that quite a number of people are just as rich or even richer than the Forbes billionaires we mean there has to be a reason Elon Musk is convinced that Russian President Vladimir Putin is richer than him he has a publicly disclosed official salary of one hundred forty thousand dollars but according to some experts Putin has assets that would total up to 200 billion dollars where does this conspiracy come from you see over the course of his presidency trillions of dollars have passed his hands so even if he only managed to keep a tiny percentage of let's say a trillion dollars imagine how rich he is Believe It or Not There is actually a whole segment of rich people who always appear on the Forbes list but don't even have a few million dollars these people are just paper rich they have companies that employ thousands of people and may even have a good product on their hands but their companies burn more money than they bring in did you know that Elon Musk acquired Twitter using a leveraged buyout that is essentially borrowed money not to say he is broke or anything because there are a number of reasons why he did that the point is you would often see people like this making the Forbes list while the people who you don't see are the ones who actually make the big moves these billionaires don't just make money they are the ones with unlimited access to cash they control countries and Global Supply chains their decisions impact not just themselves or their families but literally thousands if not millions of people globally take the Crown Prince of Saudi Arabia for example since 2018 Forbes has excluded all Saudi billionaires from its list but it is a well-kept secret that the prince popularly known as MBS has full access to trillions of dollars in Saudi Arabia's public investment fund this is the height of power behind the scenes access to anything in control of anything or anyone they desire here you might be feeling a little inspired right now you could also be feeling like you do not have enough or maybe there is a little anger in your heart now that you have truly seen how wide the gap between the Haves and halves not really is whatever the case may be we think that one's goal in life should not be uncountable riches but rather happiness at every level of life you should strive to be happy because the truth is nobody truly has it all these ultra-rich people also live difficult lives they can only afford to hide it better it is easy to feel little but the fact that you have access to a device and an internet connection to listen to this means you are not so down the line you are actually richer than you think there is no guarantee that abundant wealth will make you happier than you are right now so always remember you have enough and most importantly you are enough
Top 3 Do’s and Don’ts for Building Wealth
Jason 0 Comments Retire Wealthy
[Music] welcome in coming up on today's program top three do's and don'ts for Building Wealth I hear folks say I'm good at the don'ts of Building Wealth or the dues don't they require money don't they wealth how to get it how to keep it and how to avoid the trip wires that could blow it when it comes to wealth what are you experiencing with the do's and don'ts we've had many viewers ask about that let us know what you think in the comments section you're watching what's next with money a program that holds a promise of second chances for growth and financial empowerment with wealth three critical principles and advice saving for wealth how to keep wealth what not to do when you're on your way to wealth but also when you are wealthy we're going to reference a lot of great Insight from the psychology of money book by Morgan Hansel and have a link to it in the comments section now we're talking about that top three do's and don'ts for Building Wealth here's number one you saving your way to wealth this is how to get it Building Wealth has little to do with your income or investment returns but it's got a lot to do with your saving rate Morgan talks about that savings rate wealth is the accumulated leftovers after you spend what you take in now this is actually pretty easy to control if you latch onto this idea learning to be happy with less money creates a gap between what you have and what you want it's kind of like that Gap created if you've got a growing paycheck your savings goes further and can get bigger as that income Rises but savings without a spending goal attached gives you options and flexibility now folks I want to actually repeat this this is the core idea of wealth building savings without a spending goal attached gives you options and flexibility this is the concept of saving just to save but you get time to think and set your actions and intentions on your own terms a great writer and business advisor Dan Sullivan who wrote the Strategic coach calls this a walk away fund and we've talked about this in some of our other videos this is if you've got enough savings you've had it with your job or there's something unethical happening there you can walk away and do okay and reset your career path by Saving in this manner your financial Independence grows and folks I have personally lived this flexibility gives you the ability to wait for good opportunities in your career small business and especially your Investments the hardest Financial skill is getting the goal posts to stop moving according to Morgan it gets to the classic case of more versus enough and a quick example the real estate business my wife and I started we could have kept going to develop and acquire more properties but at some point we stopped we met our goals and we paid our debts early and completely all out of rants with no outside partners yet we're still actively investing in other forms of assets and Equity markets but I had to stop and think who or what was I trying to impress if I kept making the real estate business bigger would it be other people who don't know me or don't care you know we reached a Target that was very good and it's still growing in value and wealth we did not need to move the goal posts and we didn't generating wealth is often linked to generating Envy they seem like they're on Parallel slopes on a graph in other words it's a form of social comparison and we're talking about the top three do's and don'ts for building well here's number two getting wealthy and staying wealthy this is how to keep it bottom line strive to consistently not screw up we have to hold in our minds and our attitude some combination of frugality and paranoia now this is a very unique tension but it's very profitable with frugality we live below our means with paranoia we're questioning am I doing the right thing and am I doing that right thing well but by keeping on learning and getting professional advice we can do this so getting money is one thing keeping it is another getting money requires taking risks being optimistic putting yourself out there keeping money is kind of the opposite of taking risks it requires humility back to that frugality and it requires a little bit of fear paranoia the idea that what you have made and achieved can be taken away and that some of your financial investing success and I would add real estate success you've got to admit some of this is attributable to luck the time you're in the markets or you're buying them I could list probably five examples of luck during real estate and other types of investing bottom line here past success can't be relied upon to be repeated indefinitely external events markets family needs change and we change the ability to stick around for a long time without wiping out or being forced to give up staying in the game not capitulating is financial endurance it's a key to Building Wealth powering through recessions and downturns smartly we have many videos that help you do this on our what's next with money Channel swinging for the fences and investing for home runs or grand slams can put your portfolio at risk so strive with investing to hit singles and doubles and obviously don't put all your eggs in one basket a friend of mine years ago said if you had an investment if it doubles sell half and this is really about stocks if it triples sell it all it's pretty good advice I don't always follow that some to my regret we have another set of videos they're actually too called investing in what you know where I talk about letting your winners run compounding only works if you can give assets years and years to grow Warren Buffett we've got several of his books here hasn't always been one of the richest men in the world as of this taping this guy is age 92.
Warren Buffett didn't even become a billionaire until he was 50 years old in fact this blew my mind 99 of Warren Buffett's net worth was earned after that 50th birthday I have seen this pattern and dimension of net worth growth first hand and we've got a fantastic video called net worth equals net wealth so if you're getting value from this video be sure to hit that subscribe button and the like button and share it with folks it's free and non-commercial we're talking about the top three do's and don'ts for Building Wealth and here is number three wealth what not to do this is avoiding the tripwires Warren Buffett's what not to-do list is really interesting he's not loaded with debt no he didn't panic and sell during the 15 recessions he's lived through as an active investor he does not jump into excessive Trading he's generally very tax sensitive and he pays for good advice to help you he's kept a sterling business reputation with his ethics he's not locked into one strategy world view or trend he did not use other people's money but he does use Insurance floats and we explained that in some of our videos how Berkshire Hathaway is structured he did not quit he kept going he is still going and I take great excitement from this as an investor small business owner and media influencer I can keep going you can keep going Warren Buffett and his partner Charlie Munger have stayed wealthy they had an edge and survived to stay wealthy requires that margin of safety he talks about so much reserves and to not put all of your assets at Great risk think about this concept and it comes from Morgan's psychology of money book that having cash buckets to prevent you from selling during a bear Market or a downturn if you need to pull money for your household or in retirement you take it out of the cash bucket you don't sell stocks or mutual funds when when they're under pressure or low and you might think wait a minute I'm only earning an interest rate of one or two percent on that cash actually you have avoided a loser return you've avoided much more negativity by having not to have to sell that stock at a low price you didn't sell equities at low prices so that return on that cash is higher than one or two percent now what about compounding compounding means good returns uninterrupted over long periods of time and that's what Berkshire Hathaway does now returns won't be up every year only Bernie Madoff claimed that and you know how that turned out so be sure to hit that subscribe and like button and don't forget to share new episodes of what's next with money or posted on Thursdays I'm Bretton Eiser looking to see you next time on what's next with money [Music] thank you
Read MoreShould You Transfer Your Final Salary Pension?
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
[Music] welcome to the Morningstar series ask the expert I'' m Holly black with me in the workshop is Steve Webb he'' s director of plan at Royal London hey there Mohammad so we'' re talking pensions today as well as you'' re telling us about the distinction in between a defined advantage and a specified contribution pension plan so defined benefits sometimes called last wages commonly you hear it called is the older design of pension plans so you utilized to work for a huge firm and they'' d pay your pension plan that resembled a tough assurance you'' ve earned this quantity of cash you'' ve served this variety of years you'' ll get this portion of your last income when you retire amazing excellent that'' s right so'there ' s the example that'you desire that ' s often tended to go nowadays companies have shut them since they'' ve end up being a lot a lot more pricey than they anticipated and also nowadays you'' re most likely to have a pot of cash pension called a defined payment since the only point that'' s defined is what ' s going in that'' s what we understand what we put on ' t'understand is exactly how well it will certainly do as well as it ' s invested we put on ' t recognize what kind of pension plan it'will get you when you retire it ' s flexible it has its benefits yet it ' s not the like the old-style and also some new rules that came in a couple of years ago mean that if you do have one of those older design pensioners you put on'' t need to persevere you can relocate it right into type of a sip or an internet select how you spend it on your own why may someone do that what can happen is if you'' ve obtained an old-style final wage pension of let'' s say 10 thousand extra pounds a year rather than taking that 10 thousand a year when you retire till you die the pension plan system could claim we will certainly offer you instead three hundred thousand extra pounds that may be an example as well as you can take that cash and placed it into a pot of money pension a different kind of plan as well as the large plus of that comfortable adaptability so for example from the age of 55 you can begin attracting on that currently there'' s tax obligation to be paid and also obviously it could not last you to the or 85 or 90 so you know however it is a lot more adaptable people like that due to the fact that if they were to pass away possibly if they don'' t have a spouse however perhaps they have kids or something like that after that the pot is left for the youngsters whereas a firm pension plan very little might most likely to the kids so it generally allows people much more selection a lot more adaptability perhaps retire a bit previously as well as invest a few of the pot to maintain them going till their state pension begins that'' s why a great deal of people see this big quantity of money see the versatility as well as locate it rather attractive yet the regulatory authority has claimed they'' re really worried that a lot of people are doing that and it may not be the appropriate decision due to the fact that there are a whole lot of factors to stick with that older design pension plan scheme out there there are as well as the regulator'' s claim that the when you take monetary guidance the expert needs to begin from the assumption you must remain put from the assumption that you shouldn'' t step'unless there ' s a great factor to relocate as well as a few of the tourist attractions of staying or to start with this revenue is rather much ensured it lasts as long as you do it rises in line with inflation for the most part and also if you'' re retired for 20 or thirty years that truly matters and also you don'' t need to fret about the supply market rising or down that'' s the pension plan plans problem not yours so that component of certainty predictability assured income since you put on'' t understand how much time you'' re going to live you put on'' t understand how the marketplaces are mosting likely to do all that danger is cared for for you which'' s an extremely appealing and beneficial thing this is probably one of the most important choices people will certainly make in their life if they do have this selection so what is the best thing to do well even if your pension deserves only as they just but thirty thousand extra pounds which'' s a pot of thirty thousand pounds not a yearly pension plan so the majority of these old last salary schemes will be above that degree by law you have to take monetary recommendations however a couple of things to start with pay attention to it because it'' s tempting to assume I see this quantity of cash may be larger than worth of my house I desire my hands on it I don'' t care what you the consultants are say I just want my cash money that'' s you'recognize if you ' re quickly take a big deep breath and also the various other point additionally is to ask some quite searching concerns about where the cash'' s going to go to because several advisors are unbiased they'' ve obtained your ideal interests in mind yet some of them have actually obtained incentives that in fact they intend to handle your money they want one more piece each year you recognize as well as you just require to ask a whole lot of questions concerning the fees your face if you do a transfer so be sure there'' s a great reason to move and begin with the assumption that you put on'' t and after that pay attention carefully if the guidance as well as be rather you understand ask some challenging inquiries thanks so a lot for your time as well as thanks for joining us
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