It’s unfortunate that many of us are not taught much about money at a young age, especially in our homes since it’s not a subject covered in schools as well. It has been a mystery for the most part what is required in order to become financially successful as a result. What I have come to discover is that it’s not at all a complicated process. What you need is a financial plan.
I recently read Robert Kiyosaki’s book, “Rich Dad’s Guide to Investing” which taught me a lot of things about investing and wealth creation. I suspect that you want to know the answer to a question that many people have on their minds, “How do I create wealth?”
The vast majority of people are in trouble financially because they don’t have a plan for managing their money. One of the first things you can do is to meet with a financial advisor who can help you begin the process of achieving your financial goals.
One of the biggest lessons I got from reading the book is that wealth creation is an automatic process IF you have a plan and stick to it. Below are the three plans that Robert Kiyosaki recommends if your goal is to become wealthy and financially free.
1. To be secure
Security is a need that every human being has. We want to know that we are safe and not vulnerable to any form of danger to ourselves and also the people that are dear to us. A financial plan to be secure includes things like insurance products, a life cover policy to provide for your family in case you die, medical aid cover for unexpected illness, funeral cover, etc.
These are basic human needs that everyone has and are therefore important to human nature.
2. To be comfortable
When people have their basic needs met the desire for the better things in life kicks in so that they live more comfortably. I bet that’s what you also want for yourself, right? Perhaps you want to buy a new car, travel around the world with your family, raise education fees for your children or buy a new home.
Again, a financial advisor can help you develop a plan that will help you attain those goals through vehicles such as investments for example.
3. To be rich
Most people do well with just the first two plans, and that’s ok. To become rich is a different game altogether because it requires more time and effort than the other plans. The really rich people of the world (2-5% of the entire population) are those that own big businesses and properties.
They participate in investments that are only reserved for the rich which make them even wealthier than others. They are able to do this because they generate massive cash flow in their businesses that allows them to purchase the best real estate, investments and more that people at their level can participate in.
Building a solid business requires a commitment from you for it to prosper in the long run and working with a mentor who is already successful in your line of business is highly recommended. They will provide the insight you need to get to where you want to get to.
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Reading Robert Kiyosaki’s book Rich Dad’s Guide to Investing opened my eyes to valuable money-making lessons. To build wealth you need to have at least one financial plan that you follow diligently to the end. Money doesn’t have emotions so while they are a natural part of human nature, you mustn’t cave in to them. This is often the mistake that many people make when it comes to managing finances.
One of the things I love about Robert Kiyosaki’s teachings book is how simple they are to understand and follow. In that book I just mentioned, he talks about three types of financial plans you need to become wealthy. All of us need at least a plan for security that caters to our basic physiological needs. These include things like healthcare, shelter, food, children’s education, utilities, etc. That’s the bare minimum that we all need.
The other two plans are for the finer things in life and different strategies are required for each one. The second plan is to be comfortable and have more comforts beyond the security plan. This could include having the capacity to take an annual family vacation, perhaps living in a fine neighbourhood, and eating out at fancy restaurants. Most people are content ending at this stage and it’s not bad at all as it’s a big blessing. The ultimate plan is to be rich and have total financial freedom.
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With the plan to be secure often entails getting a job or working for yourself. You exchange your time for money so you can make a living to meet your and your family’s basic needs. That’s the route the majority of us take to get started in the pursuit of our life’s goals. In the time I’ve been employed that’s been the case where the majority of resources have gone towards paying bills.
I must say, however, that despite the level you’re playing at it’s important to develop a savings culture. In so doing, I’ve been able to invest in the stock market and raise capital for other things. It’s not so much dependent on how much you earn but the principle behind saving. If you spend all your earnings on paying your bills, you’re never going to make it to the next level. I make it a habit to at least save something every month as well as having an emergency fund.
Besides saving only for basic needs, save towards investing in something that will benefit you later. That could be saving towards housing or short-term investments that will help you raise capital for business projects. It’s about building line upon line and precept upon precept which is how life works.
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With the plan to be comfortable this often includes investing in your education so you can increase your earning potential. While more qualifications aren’t a guarantee for getting a better job, they give you that advantage to get better opportunities. With more income you’ll be in a position to do more than pay your bills. At one time, I shifted to a new job that paid a lot more than the one I had left.
With the additional income, I was able to do at least one holiday every year and see beautiful places. I also had the capital to try out some business ventures which exposed me to great business education and networks. The only problem was that I didn’t have a solid savings plan that could have helped me acquire property. I realise today how much of a difference it would have made had I invested in a home.
Anyway, that’s how some of us learned though what I’m sharing now would have helped me at the time. What I love however is that God is gracious and always willing to give us second chances. In terms of being comfortable my plan now involves increasing my income through freelance work. The goal is to replace my job income ultimately and have more flexibility. Though that won’t mean financial freedom, it would be a step in the right direction.
If you can increase your value no matter where you are right now, you’ll have more options in life.
The ultimate plan to be rich entails having money-making assets that work for you where you don’t have to work. This is what you call financial freedom and what I aspire to and I believe you do too. The vehicles you need to get to this level are systems in the form of well-structured businesses and investments. The businesses I’m referring to are those that don’t require your involvement in day-to-day operations.
Most of what we call businesses like my freelance work aren’t businesses in the true sense. If I stopped working on my freelance business, the money would stop coming because I exchange my time for money. A true business makes you passive income through a system that includes employees and systems that make the business work. Even if you’re earning a large cheque, you’re not free until you can invest in something that makes passive income.
From my observation of wealthy people and interacting with them I’ve seen that they have multiple income streams. Some of them are through real estate investments, multiple businesses, and venture capitalism. The great thing about this day and age is how the average person can start a business online. Setting up an online business is more cost-effective and profitable than a traditional brick-and-mortar business. You just need to find your niche and run with it when you get the right guidance. The world is changing so much that relying on a single income from a job is risky business.
The great thing about this day and age is how the average person can start a business online.
Over the years, I invested in financial education and continue to do so even today. I know with most people education beyond college is something they are not interested in. Part of that is because of the negative experiences they had with formal education which put them off to an extent. Ongoing education is important, however, to achieve bigger things in life. What got you where you are today won’t take you any further.
The more you learn, the more you increase your earning capacity though I acknowledge the importance of learning the right things. Robert Kiyosaki has a game called Cash Flow which is a form of edutainment where you learn about money and get entertained. I’ve played it multiple times and play every so often for fun and learn the lessons again and again.
This game forms the basis of all the books that he’s written to date. One of the main things I’ve learned is that you should understand the difference between an asset and a liability. An asset is something that puts money into your pocket while a liability takes money out of your pocket.
Knowing the difference has helped me in the financial decisions I make and put me on the path to freedom. It’s all about following the plans you’ve laid out and not your emotions. Though you might encounter setbacks you’ll win in the long term if you stay consistent.
An asset is something that puts money into your pocket while a liability takes money out of your pocket.
When you’re young and have no guidance it’s easy to miss some important things that cost you later. That was the case at certain points in my life which could have been avoided with the right guidance. As I have mentioned, I could have done certain things better at the time so I learned from those experiences. I find that time if not used wisely will leave you with some regrets later in life.
Unfortunately, I can never go back to my younger days and do things differently but I can start again today. You can do the same as well and maximize the opportunities that you have today. The Bible after all tells us in Romans 8:28, “In all things God works together for the good of those that love Him…” Who knows, maybe your mess was designed to become your life’s message.
God can use anything for good. For a long time, I had a difficult time narrowing down a career that I could pursue. I went through various roles that weren’t quite the right fit. Today I see why it’s important to have a purposeful plan for your career development.
Most people are frustrated with themselves and others because they aren’t fulfilled in their lives. These are things I’ve observed and being around people like that can sap the life out of you. You don’t want to become a grumpy old man or woman in your later years.
Find something you’re passionate about with God’s guidance to ensure you’re going the right way.
Find something you’re passionate about with God’s guidance to ensure you’re going the right way. Without passion, you have no energy which makes it difficult to create any positive impact in your line of work. Some people have reservations about working on things you’re passionate about and emphasize money over purposeful living. While making a living is important, in the long term it does more harm than good for your development.
When I got to that point, I decided to start all over and while it wasn’t easy in the beginning; it put me on the right path towards fulfilling my potential. Sometimes it’s scary, I’ll admit, as you wonder whether you’re going to be successful at something new. Contending with negative thoughts and anxiety is one of the biggest battles you’ll have to face. My biggest battle is in my mind where I have to consciously remind myself of who God says I am.
I get encouraged to listen to other successful people’s stories and apply the lessons they learned. I was so blessed to get in touch with someone successful in freelancing and who taught me a lot. I’m constantly learning and moving closer to my dreams. Without taking that leap of faith I may never have come across and missed out on a great opportunity. Find the right support if you’re considering starting over as you’ll need it.
Making money is a team sport and ask God to surround you with the right people to help you in your quest.
I hope my experience has helped you and you picked up some valuable lessons. Whatever level you want to play at, get the help you need to create a plan you can follow diligently. Making money is a team sport and ask God to surround you with the right people to help you in your quest. If you haven’t read Rich Dad’s Guide to Investing, I urge you to do so and it will open up your mind.
Despite the challenging situations in the world today, there are still opportunities available that you can find with God’s help. His plan for your life is not determined by how good or terrible the economy is. God owns everything after all and can do the impossible because He loves and cares for you. Don’t look at where you are and feel as though you’re never going to break out of your situation.
NB Even if your goal is to become rich, having the first two plans in place is critically important. I and many other people have made that mistake of just focusing on being rich. While some have done it before it is not the norm.
Thank you for taking the time to read this post, I hope it has helped you. Remember to share your comments below as well as to share the post on your social media profiles. Stay tuned for the next post and until next time,
Be all you can be!
