If you’re like me, when making a decision, you like to
research and compare different methods before deciding which way to go. This has definitely been true for my wife and me as we’ve pursued our wealth journey. And once again, if you’re like me, what you’ve probably found is there are so many different perspectives on how to build wealth. It could be enough to drive you mad!
So who’s right? Believe it or not, I would go so far as to say that much of the financial information, strategies, etc. out there is good in it own way. Until discovering my own personal finance strategy,we tried a lot of different things before just narrowing it down to what has worked consistently for us. So I’m not one to say that there is one specific philosophy to follow. Heck, I even encourage you to contrast different “gurus” to see which one works best for you. Because you will find that you are able to pick and choose from different advisors and tailor it to your needs in order to reach financial freedom.
For example, there are some who mention not to take on debt when building wealth. Others say using other people’s money (debt) is vital to getting rich. So who’s right? Well, they both have valid arguments and they both are strategies to be incorporated (at the right time) on your wealth journey.
Take a look at Forbes list of the 400 richest Americans. You’ll find many of them are as different as night and day. Some are extremely aggressive. Some are extremely passive in what they did to build wealth. So who’s right? Obviously, both perspectives are good enough to make you wealthy!
As you learn more about the wealthy, don’t be surprised that they’re all different. But don’t let that deter you from applying what they do. Just continue to seek out the ideas that work best for you and keep following those methods on your journey to becoming rich.
The strategy that works best for me has been a simple 3 step formula my wife and I have followed for over 15 years. The greatest thing about the formula is that you don’t have to do the steps in any particular order. You can do them one at a time or work on all three simultaneously:
Step 1: Expense Management (aka Spend Less Than You Make)
In order to build wealth, you must manage expenses. You need to identify where you are spending your money and then determine what is absolutely necessary and where you can trim. This doesn’t mean you have to change your way of life, but instead take better control by being prepared. Your goal should be to prepare for new expenses in advance while minimizing the risks of being caught off guard.
Gina and I created an expense management plan (aka budget) and we spend about 2-4 hours per month making sure we are keeping on track with it.
Step 2: Debt Reduction (aka Don’t Owe Nobody!)
In order to achieve financial freedom, you have to reduce the amount of debt that you owe others. There is wealth building debt and wealth destroying debt. Wealth building debt helps you to become
richer. But your goal is still to become totally debt-free.
This was the step we have been most aggressive about on our wealth journey. Paying off our house, cars, and rental properties was crucial. From there, we make sure not to incur any debt. Cash is king!
Step 3: Multiple Income Streams (aka Make Your Money from More than One Place)
In order to get rich, you must have more than one source of revenue. So often I hear people say, “I could be rich if I just got a higher paying job”. Believe me, there are wealthy people who work at jobs paying less than $50,000 per year, and there are people making over $100,000 going broke. It’s not as important to make more money from one source of revenue, as it is to make money from more sources.
Think about it: if you make $50,000 from one income stream (e.g. job) and you lose that job, you are
temporarily doomed. But if you make $10,000 from five different income streams (e.g. businesses, investments, real estate, etc.) and you lose one (maybe the investment tanks), you still have $40,000 coming in. Your goal should be to always have 3 or more income streams going.
Right now, our main income stream comes from educational software training I conduct for a major school district. But we also have our rental properties, financial coaching business and we’re strategizing to generate revenue from our online presence.
I hope by sharing the things we’ve done, including a culmination of years of learning experiences, successes AND setbacks, that you now have some simple tools, tips and techniques you can start using RIGHT NOW to help you build wealth and become financially free!
Share this with others who will benefit from this lesson.
Brandon and Gina Wilkins are financial coaches and co-founders of Financial Freedom Builders LLC. Mr. Wilkins is also the author of the financial classic, Getting Rich is Simple...But It Ain't Easy! They are available for coaching, workshops and seminars designed to help you take control of your finances.
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