Monday, 13 February 2023

How A Millionaire Manages One Dollar

If you don’t know how manage a million dollars, I guarantee that the money will quickly disappear if I wrote you a giant check right now. Precisely like 90% of lottery winners that go bust within five years, they didn’t have the basic discipline or the formula to handle the money that would have created a financial foundation that would last for generations. Learn how to manage a single dollar so that you can move up to the financial big-leagues on your own.


Give a millionaire a dollar and they will do something predictable: They will display the discipline not to spend it. That dollar will be deposited into a savings account where it earns interest income. A millionaire does not spend earned income! They only spend the income from their investments. A millionaire cycles money from a job, overtime pay, bonus, etc., into investment accounts. When you start out, you probably don’t have any investments so how are you going to pay your bills? Reject the saying: ‘Try to save some money after you pay the bills each month.’ This rarely happens and may be too little to add up to much. That saying is psychologically backwards. The new saying that I you want to begin with is: ‘Don’t invest all of your earned income each month, pay a few bills with it.’ Do you see the millionaire difference?


Let’s talk about financial building blocks. Give a millionaire a dollar and they will split it up into the distinct building blocks of a solid financial foundation. Ten-cents of that dollar will be allocated to a permanent investment account that is never spent. This account builds your wealth. As I have said before: ‘Wealth can only be created and maintained by the amount of money that you receive and do not spend.’ Well, this is that account, and you need to increase it by a piece of every dollar that you receive. Another ten-cents will be allocated to a savings account. This is a delayed-spending account for expensive purchases such as vacation, home repairs, or cars.


Millionaires save money to buy something before they purchase it, not afterward on credit where you have to pay interest. The next ten-cents is allocated to wealth education. The economy is always changing and you are ultimately responsible for directing all of your money. The only way to do this wisely is to add to your investment knowledge. Get investing ideas by paying for advisors, books, courses, newsletters, magazines, and newspapers. The three-dimes that were just allocated for different purposes is the wealth formula of millionaires; this is how wealth can be built to last for generations. It is only after these three buckets get their share of the dollar that part of it is allocated for taxes on that dollar. Notice that a millionaire pays the taxman after the important building blocks get their share.


There is no such thing as ‘income before taxes’. There is a tax liability on all income from whatever source. So a millionaire will have a tax strategy in place to receive that dollar before it is ever deposited at the bank. Millionaires don’t overpay their taxes, they manage tax liabilities because they are your single largest expense (Add up how much you paid for income tax to the IRS, state, city, and property taxes - it is probably a much bigger number than you expect). Some ways to minimize your taxes include setting up a part-time business to create legitimate deductions, buying investments that offer depreciation like real estate and oil, and finding the best CPA to give you advice.


The managing-a-dollar formula that the millionaires follow is: minimize the tax liabilities, allocate parts of it to build your financial foundation, decrease the percentage of earned-income that you spend until it is zero, and forge the discipline to consistently follow this routine. Now, at what age do you wish that you had learned this material? At what age do you think you should start exposing your children to these ideas? The correct answer is: as early as possible (and when they start getting an allowance at the very latest).


Eliminate The Personal Barriers To Wealth

Wealth is the condition of profuse abundance and affluence, having a bountiful supply of material goods, resources and money. It could also be defined as property of economic monetary value.


In Economics, wealth is defined as the stock of physical capital, human resources and net financial worth owned overseas by a country. Physical capital composes ownership of building structures, machines, railroads and other fixed tangible assets. Human capital on the other hand, is the quality work force with emphasis on educational attainment, which contributes to the country’s productivity. While net financial capital is off settled from the monetary value of assets acquired by foreigners in the local economy to the foreign acquisition of the country.


Oftentimes, wealth is associated with money such as savings, investments and other forms of financial capital.


But the word ‘wealth’ is taken from the Ancient English words ‘weal’ (well-being) and ‘th’ (condition), which when combined means ‘condition of well-being.’ ‘Economic,’ on the other hand, originates from the Greek word ‘oikonomia’ meaning ‘household management.’


In a different perspective, some individuals view wealth as a genuine disclosure of one’s true values, and accounts for what is held important to one’s life like a reflection of image and real self.


Today, society is posed with the challenge of sustaining quality life, which contributes to the equilibrium between economy and quality. Such perspective allows an individual to assess ones real assets - strength and opportunities to enhance ones real potential.


A person who attempts to align values and principles with the condition of well-being believes that he/she is seeking genuine wealth - all things that make life worth living (personal, professional, spiritual, environmental and financial well-being).


People mostly define authentic wealth in terms of harmonious relations with the members of the family, supervisors, co-workers, peers, neighbours and acquaintances. Some see it in the simplicity and complexity of natural creations. Or it could be measured in terms of joy, social cohesion and unquantifiable, abstract thoughts and ideas.


Another relevant word which can be related to wealth is value, which is derived from the Latin word ‘volorum,’ meaning ‘to be worthy’. Oftentimes, value connotes monetary expressions such as costs, prices and returns on investments. But true value (valorum) is found on the simple things that makes life worth living. It is the value of relationships, the value of what one possesses and not long for things which are not in their possession.


Do You Have Any Goals For Building Wealth

The money is out there. No matter how many people tell you that we are in the midst of a starvation economy, that the market is doing this or that, and that it's too risky to ‘play the game,’ so to speak, people are getting rich every day. That is the reality.


The trick, of course, is to become one of those people.


‘Yeah,’ you might say. ‘That guy was just lucky. What are the chances of that happening to me?’ Well, absolutely zero if you don't do anything about your dreams to build wealth. If you walk around thinking that you have only a snowball's chance of hitting ‘the big one’ in the financial game, then you are right. That's because you are depending on chance.


Becoming wealthy is not about chance. Oh the guy you just read about may indeed have been lucky - but he was not ‘just lucky.’ Because fortune favors the prepared mind, you have to lay the groundwork in order to take advantage of opportunity when it arises. You have to be able to not only recognize those opportunities, but to actually have the resources to take advantage of them.


Laying the groundwork involves having a plan for your financial future. What is your plan for building wealth?


If, like most Americans, you don't have one then, like most Americans, you will retain the status quo. But if you recognize that you, and only you, are in charge of your destiny, that is an entirely different matter.


According to Robert Kiyosaki, author of the Rich Dad series of books, you have to get a grip on your financial philosophy. You don't have a financial philosophy, you say? Sure you do, even if you don't realize it.


In his book ‘Cash Flow Quadrant,’ Kiyosaki outlines the four philosophies as they were outlined for him by the man he calls his ‘rich dad.’ You can recognize your own philosophy by noticing how you tend to make your money. On the left side of the quadrant, are the E's and the S's - the Employees and the Self-employed. The philosophy of the E is based around security while the philosophy of the S is based around doing his own thing. While there is nothing wrong about either philosophy, neither is likely to help you build much wealth.


On the right side of Kiyosaki's quadrant, are the B's and the I's - the Business owners and the Investors. The difference between a B and an S, Kiyosaki says, is that the B has built a system which he can rig to run itself, freeing him for other financial or personal pursuits. An S simply ‘owns a job,’ as Kiyosaki says, and is such an integral part of the operation that he is essentially a prisoner of it. The company he has created is his ‘baby.’ But we all know how demanding babies are, and if a business never matures into an adult that can survive without your mothering, it will eat most of your time.


The trick, then, is not to build a better product. It's to build a product better - more efficiently with regard to your own resources. Build a system, not a job. Then you will have the money that will take care of your personal needs and allow you to invest.


If you already have loads of money to work with, then you can go ahead and jump right to the I quadrant - after investing in your own education and learning how it works. Investing is risky if you jump in blind, but if you know what you're doing, it is a whole different matter.


So lay the foundation with education and then build your wealth as though you were constructing a structure. Don't skimp on materials, but instead do it methodically. Eventually you will find yourself staring at an impressive building that will help you weather any storm.


Common Wealth Building Myths

There are some common myths that hold work at home businesses and investors from achieving success. These myths can has a powerful psychological impact on small business owners, stopping them from building wealth, and preventing them from reaching their full potential.


Money Breeds Money


This may have been true pre discovery period, but it is not true in the Internet age. The myth that you need to be born into money, or attend an Ivy League school, or you’ll never know how to make real money is a difficult roadblock to overcome.


Millionaires are made every day. Most start with nothing, and use a program that failed for thousands of other business owners. Bill Gates, Ophra, and Martha Stewart all started from humble origins.


Money is Made on the Backs of the Poor


If you are afraid of going for the brass ring because you fear ruining someone else’s life, then relax. Your playbook can be moral, ethical, and built on old fashion values, and it will lead you to untold wealth. The easiest way to become rich is to create value in other people's lives.


This myth is high-grade, premium quality nonsense. There is enough money for everyone. Many ‘work at home’ programs prove this. The company may sell 10 000 programs. Just because only 100 people succeeded doesn’t mean that the program was a rip off. Those who do not succeed don't believe they can.


Remember that success starts in the mind. You need to believe that you can succeed before you will succeed.


You Must Sacrifice Family to Build Wealth


The baby boomers believed this and introduced one of the highest divorce rates in recorded history. However, their children have learned the value of balance, and the truth behind wealth. The rich and famous do not work as hard as the factory workers who run the companies that built their wealth.


This generation has coined a new phrase, ‘work hard, or work smart.’


There's a difference between working hard and working smart. Successful people learn to work smart. They learn emulate successful people and use them as models so they can avoid mistakes other people make.


You can save a lot of time, money, effort as well as some major headaches by finding a mentor, or hiring a life/success coach.


Getting your business started and running require work but you can chose to have a successful business and a family.


Rich People Cannot Live Normal Lives


Most of today’s millionaires live in suburban towns and lead normal lives. The dream of living the rich and famous life has lost its lustre. More people are learning that the fantasy of wealth was more attractive than the reality.


However, you can live the good life without giving up a normal life. There is no reason why you cannot take a vacation with your family at a local camp ground on the weekend, and then attend a conference in a $2 000 outfit and $800 shoes through the week.


Don’t let the fear of being rich stop you from reaching your dreams.


Life is sweet. It will be what you decide to make it as long as you remember that no one can define who you are - unless you give them the power to.


Building Wealth Through Joint Ventures

Almost every one of today’s billionaires built their empires on a joint venture of some sort. In the past, joint ventures were built on mergers, friendships, networks, and alliances. The internet has introduced join venture companies which work to join web publishers with products they can sell.


The fundamental principles behind joint ventures makes solid business sense. It is often cheaper to pay a content rich website a percentage of sales, or a fee for inbound traffic, in exchange for exposure.


Content rich websites are hard to manage, expensive to build, and are usually out of date within months. Adding content weekly can cost $8 - $15 an article. Managing a 1000 page content rich site, including newsletter, forum, blogs, and community can be downright debilitating.


That is why the web works to join content rich web sites with small businesses ventures. But, like everything, there is a right way to form a venture, and a wrong way.


Affiliate Programs


One of the most popular is the affiliate programs run through Commission Junction, Click Bank, and Amazon’s fulfilment program. These let the web publisher choose the products they want to promote. In return, the small business receives a ‘pre-selling’ tool, and increased traffic.


However, not all web publishers are equal. Many do not understand the finer points of pre-selling. They believe their only purpose is to create a ‘place holder’ on the web for the ad to appear on.


This makes it frustrating for the small business owner who pays for thousands of clicks but makes relatively few sales.


Most businesses throw up their hands after a few months and cry, ‘Is there something better?’


The answer is a simple - Yes.


Joint Ventures


There are thousands of joint venture opportunities out there. There are probably less than a dozen legitimate ones. Most of them, priced way beyond what a work at home professional can afford.


This forces work at home professionals to do things the ‘old fashion’ way. Take time to surf the web. If one or two websites offered a great ROI (Return On Investment) for your PPC (Pay Per Click) Campaign, then visit the website.


If the website includes a forum, blogs, new content, mailing lists, then the small business person found a gold mine. Contact the web publisher and ask them if they would be interested in a Joint Venture.


The odds are good that Google is not paying them something equivalent to what you are paying the PPC program. If Google is charging $.50 per click, and the monthly cost is $100.00 then offer the publisher $50 - $100.


In many cases, some of these publishers are happy to receive a guaranteed $20 a month.




Freedom to surf the website and look for the best content management sites can dramatically increase their ROI.


Some of the biggest content management sites have their own advertising fees. This can make life easier, but there are ways to offer publishers more value.


Add Value


One way to add value is to ask the publisher whether there is anything you can sell for them. Many web publishers can easily whip up a book. Adding it to your ‘package’ can improve their desire to help you sell, and give them more links.




The success of a joint venture program is wrapped up in the contract. If the venture doesn’t require a legal contract, then contemplate using a service like where you can work together, using the Adbrite platform to keep track of data and help build wealth.