Upgrading Your Financial IQ is Simply a Matter of Education
"We're living in a new economy. The world has shifted– I believe it's aligning itself more with the universal laws. See, there's a bigger gap today between the haves and the have-nots than there ever has been before, and it's getting wider. The people on the bottom haven't even a hope of how to get to the top, and the old system isn't going to help them".
~ Bob Proctor – Moral Compensation
Financial literacy is the first step to financial freedom. . . Often the first step is learning "what you don't know you don't know"!
"Financial Intelligence is a 50/50 proposition. 50% of financial intelligence is what you learn in business school or training. It is the so-called technical knowledge about money, accounting, finance, investing and business. The other 50% of financial intelligence is knowing when you are thinking rationally and when you are thinking emotionally.
To simply say, ’Play it safe.’ is not a rational thought because it is a thought that is generated out of emotion. To say, ’Play it smart.’ is a thought coming from the rational brain.
It is that 50/50 relationship that is the basis of financial intelligence, and in my opinion , why some people make more money than others."~ Robert Kiyosaki – www.richdad.com
Are you abundant with Assets or Liabilities?
Robert Kiyosaki also outlines in RichDad’s Basics. . . "as you begin your journey… it's important to master the 'basics' so that you have a secure and clear foundation upon which to build your financial future".
Assets vs. Liabilities
Asset: something that puts money in your pocket
Liability: something that takes money out of your pocket.
Is the home in which you live an asset or a liability? In Rich Dad's world, your house is a liability. Even if you own the property with no mortgage, you still pay property taxes, utilities, maintenance, etc. Therefore: money is being taken out of your pocket – thus it is a liability.
~ Robert Kiyosaki, author of Rich Dad Poor Dad
The Job Market has De-stabilised
Almost a decade ago, Professor of Marketing University of Chicago, Illinois, Dr. Charles King PhD says
"The old employment model is breaking apart. Only the foolish, complacent, or lazy refuse to see it and seize the opportunities to protect themselves and their families".
Consider these global signs:
- Unprecedented frequency of layoffs, downsizing and redundancy
- Scaled back company benefits for employees
- Globilisation – firms outsourcing to contractors,off-shore satellite offices
- Merger mania with significant job losses
- Doctors and other professionals reporting disenchantment with their day to day business reality
- A youth sector that has lost hope for our world and their futures
- An aging population with many not financially prepared for the longevity of their retirement
- Even whole countries facing financial ruin
Working Hard Will Not Make You Rich!
According to Success Magazine (US), a person 35 years old today making $60,000 will need $150,000 a year at age 65 just to maintain his or her current lifestyle. That means this person would have to save $44,000 a year from now – 100% of their after-tax income – to maintain their lifestyle in retirement.
Australian Bureau of Statistics – Retirement Income
80% Retire with $12,000 or less
12% Retire with $15,000 or less
4% Retire with $25,000 or less
2% Retire with $35,000 or less
<1% Retire with $40,000 or more
"Wealthy people have always had multiple sources of income. I believe that wealth is a very real part of life — it has to be addressed and understood. A person cannot live a full life if he doesn't have any money, because we use money for things, and we need things for the development of our potential. I have been teaching people that they must have multiple sources of income if they are going to accumulate any wealth — not just one source. It won't work"
Did you know the best way to create wealth?
"There are only a few ways to create wealth quickly and legally. They all involve having a business of your own. Once you have made money from a business you can then put it into diversified investments to continue securing your financial future".
~ Robert Kiyosaki, author of Rich Dad Poor Dad
Leveraged Income Creates Wealth
Richard Poe, author of the books Wave Three and Wave Four, created havoc in 1996 when he wrote an expose called "We Create Millionaires" in Success Magazine while he was editor. It outlined the rise of Network marketing as "The most Powerful way to Reach Consumers in the Nineties". It slammed the detractors of MLM (Multi-Level Marketing) and Network Marketing (NWM). It showed how ANY ordinary person could use leverage to create wealth.
Linear vs Leveraged income
Leverage is, without question, the strategy that wealthy people have always used. Approximately one percent of the population uses this strategy, but they earn around 96 percent of all the money that is earned. Leverage is multiplying your time through the ‘combined efforts of yourself and others’, by setting up multiple sources of income. It's a phenomenal strategy, and Network Marketing specifically is tuned into it.
Approximately 95% of the population is trading time for money. It has an inherent problem – basically, you run out of time! You only have so much time, and if you're trading your time for money, you obviously have a ceiling on what you can earn. Doctors and other professionals are realizing that today.
As people of like-minds and goals work together, their combined results are increased exponentially, creating potentially unlimited income streams.
Trends are Crucial. . . The Next Trillion $$$ Industry
Paul Zane Pilzer (Economic Adviser to US Presidents Clinton & Reagan) published a prediction on the growth of the Internet when everyone else thought it was a fad for computer nerds. Pilzer now predicts that the "Wellness Industry", not the healthcare (sickness) industry, will top $1.0 trillion US dollars per year by 2010. That's almost twice the dollars spent on the computer industry now!
The size of this market is getting bigger – really fast! And our company is spearheading the "Wellness" march with the utilisation of functional, nutraceutical foods that are validated by science. The baby-boomer demand for wellness products and services is being driven by two major factors.
First: New alternative health products are becoming available on a wide-spread basis and upon seeing the efficacy of these products, these boomers often become voracious customers with unlimited appetites.
Second: The current sickness-based health insurance systems in western societies will eventually be replaced by a new wellness-based system which will gladly pay for weight-reduction, scientifically proven, nutrition products and hundreds of other preventative focussed measures.
"The fortunes that will be made in the first decade of the new millennium will be in intellectual distribution: educating consumers about products and services that will improve their lives. Network Marketing today is almost wholly intellectual distribution".
"Companies that flourish in the Wellness Industry have some sort of unique or proprietary science-based technology… Not just unique, but ones that work – better than any others.”
“The next generation of millionaires will neither manufacture nor distribute products… For most people, the way to accumulate significant wealth will bethrough developing passive income.”
“The opportunity to do the greatest good in the greatest industry on earth – ‘consumer direct networking’. This is the #1 business opportunity for people wanting to create new wealth.” (adapted PZP)
~ Paul Zane Pilzer, author of The Next Trillion
See Trends & Market Niches for an expanded view on this topic.
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