Millionaire Mind | Wealth Principles
Well folks this is part 9 of the series I have been doing on the book by T.Harv Eker “The Secrets of the Millionaire Mind”
I have loved this book and have learned so much reading it that I wanted to share the knowledge with everyone.
In the last post we covered the Wealth Files 11, 12, and 13.
Wealth File #14
Rich People manage their money well. Poor people mismanage their money well
How do you manage your money or do you manage your money at all? For me I have realised going through the financial downtime I am currently going through that I have not been a good money manager. I would generally live from pay to pay hanging out for the next pay as much as possible. I was terrible at putting money aside for the right things. But reading this book has changed my thoughts so much.
I am now going to look forward to managing my money when I get it. Making a proper effort to put money aside for the different purposes it should be put aside for. Harv Eker says that “Until you show that you can handle what you’ve got, you won’t get any more!” he also says that “the habit of managing your money is more important than the amount.
He gives an example of one of the attendees of his course who for the first month only had a dollar to divide into accounts. Based on the allocation that Harv teaches she put 10c into her FFA (Financial Freedom account). And split the rest of the dollar up into the various other accounts which I will detail later. This attendee thought to herself “how the heck am I going to become financially free on 10 cents a month, so she committed to doubling that dollar every month. So it went $1, $2, $4, $8, $16 and so on until the twelve month was $2048 that she was dividing up each month. Then two years later she began to collect some amazing fruits from her efforts and was able to put $10,000.00 straight into her Financial Freedom account.
So you can see from this that just starting with any amount will make the universe see that you are managing your money. It doesn’t matter if you have a fortune right now or virtually nothing. What does matter is that you immediately begin to manage what you have got, and you’ll be in shock at how soon you get more.
Now here is the breakdown Harv says we should be doing with our pay when we get it.
- 10 % into your Financial Freedom Account (This money is only to be used for investing never spending)
- 10% into your long term savings account for spending later
- 10% into your Education account – so you can always pay for education
- 50% into your necessities account – I see this as your everyday expenses running account
- 10% into your Give account – this is your account for giving to charities etc.
- 10% for your Financial Freedom spending account. This is the account where you give yourself a fling or treat each month. It is designed to be spent in full each month. This is so you feel rich and get a taste of your new life each month.
Either you control your money or it will control you.
Wealth File #15
Rich People have their money work hard for them. Poor people work hard for their money.
Were you always told stuff like a penny’s pay for a penny’s work or similar types of quotes? Maybe you were told you have to work for your money but not told the rest that you also have to make your money work for you.
What you need to do is move from hard work to smart work. Rich people understand and use leverage. They employ other people to work for them and their money to work for them. Leverage is what a business like I am doing uses too. I have been taught for years that network marketing works because you are leveraging off other people’s time and more and more now with technology we are also able to leverage our time by doing things like Google Hangouts with multiple people at once and many viewers, Periscope, You Tube videos where you put the information out once and then many people can view it and blogging like this.
The idea is that first you work hard for your money and then you let money work hard for you. Remember money is energy. Most people put work energy in and get money energy out. People who achieve financial freedom have learned how to substitute their investment of work energy with other forms of energy. These forms include other people’s work, business systems at work, or investment capital at work.
The definition of financial freedom that Harv gives is “the ability to live the lifestyle you desire without having to work or rely on anyone else for money.”
To win this money game the goal is to earn enough passive income to pay for your desired lifestyle. In short you become financially free when your passive income exceeds your expenses. This is why a lot of people will reduce their expenses. Some of the people in the world with the greatest Net Worth just do not look like millionaires or billionaires because they do not flash their wealth around. They have learned to reduce their expenses so they can live the life they want.
Harv has identified two major sources of passive income:
- The first is “money working for you.” This includes investment earnings from financial instruments such as stocks, bonds, T-bills, money markets, mutual funds as well as owning mortgages or other assets that appreciate in value and can be liquidated for cash.
- The second is “business working for you”. This entails generating ongoing income from businesses where you do not need to be personally involved for that business to operate and yield an income. Examples include rental real Estate, royalties from books or music or software, licensing your ideas, becoming a franchisor, owning vending machines or other types of coin operated machines and network Marketing. Also any business that is systematised to work without you.
If you want to get involved in Network Marketing I would love to have you along for the ride.
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