Hi this is Diane Kennedy. Today is Day 5 of the 30-day Coundown to the release of my new book, The Maui Millionaires™ that I co-wrote the book with David Finkel. The book is scheduled to be released on November 3, 2006, and from now until then I’ll be checking in every day with a Wealth Tip excerpt from the book, written either by myself or by my co-author, David Finkel.
Wealth Tip 5: Level One Wealth Building—Your Time to Build Your Financial Foundation
If Level One is all about getting started, then the first step of a Level One wealth builder is to make the definite commitment that he or she will become financially free. The single most common reason that people fail financially is not poor judgment or lack of opportunity, rather it is the failure to make the decision to be financially free.
I am not talking about the wish or the desire to become financially free. I am speaking of the congruent commitment that you will become financially free, no matter what. This means that you both believe it is possible for you to be financially free and that it is a definite goal of yours.
From this point of decision, Level One is about building the rudimentary foundation of financial skills and knowledge so that you can move to Level Two and work to aggressively grow your net worth—intelligently and skillfully.
As a Level One wealth builder there are five specific action steps for you to take:
- Determine how much money it would really cost you each year for you to become financially free. (See Wealth Tip 15 (coming October 16th) for more guidance on exactly how to do this.) This becomes your first financial freedom target—to generate the passive, residual income you need to meet this cost of living.
- Begin today to invest a definite percentage of your income, no matter how small this initial percentage, for your future financial freedom. The key as a Level One wealth builder is not to become wealthy in one bold move, but rather to congruently make the shift to have a portion of your time, talent, and money invested for your future. There is a saying that where your attention flows, your energy goes, and your result shows. Well, taking a definite percentage of your income off the top to automatically invest for your future is a tangible way to get your attention off of debt and financial struggle, and instead focus on wealth creation.
- Read or listen to financial books and courses for at least 60 minutes three times per week. There are only two ways to learn—by your painful trial and error or by the experiences of other people. Reading and listening to the right financial books and courses lets you benefit from the digested and organized experience of some of the smartest people on the planet in the area of finance and wealth building. Over the past decade I’ve consistently read or listened to over 100 books and courses each year. I credit this self-education as one of the most significant contributors to my financial success. It will do the same for you if you step up and get busy studying. The best investment you can make as a Level One wealth builder is in your own financial education.
- Find a partner or group to mastermind with as you begin your journey. You have a long road ahead of your to build your wealth. There will be challenges, set backs, and successes along the way. The key is for you to have a team to turn to so that you will stay the course. Wealth building is a team sport and is much easier to do with the cooperation and active support of a community of other wealth builders. (This is one reason why Diane and I started Maui Mastermind Online™ to create the world’s premier online wealth building community.)
- Don’t make any MAJOR financial commitments until you have both the financial understanding and financial team that can help you intelligently evaluate and execute that investment or business. In other words, as a Level One wealth builder you don’t yet have the financial sophistication to make major financial moves. Instead, delay these until you have progressed to Level Two.
So how long will it take you to progress from Level One to Level Two in your wealth building? For most people it will take 6-12 months, however if you really apply yourself you can make it in as little as 60-90 days, although this is pushing it.
For more on Level One wealth building see, The Maui Millionaires™ pp. xix-xx, pp.186-189.