secrets to wealth

Money Management: 10 secrets to wealth creation (that they're not telling you)

Rule 1 - Change your mentality.
Forget all that you know today, including negative thinking about money. Keep a positive energy and attitude, showing gratitude at all times.
Rule 2 - Money in and of itself has no value
It is affected by inflation and depreciation. Additionally, earning more does not translate into wealth. Instead of focusing on money, look at the value of the assets which you own or can buy,
Rule 3 - Learn and understand the value of assets
Make sure you are not putting value on items that depreciate faster than money itself.
These items include clothing, cars and cellular phones.
A car is not a valuable asset, as the day you drive it off the lot it loses 30 per cent of its resale value.
On the other hand, if you use items to generate income or if they appreciate in value then you have discovered something to focus on and keep.

Rule 4 - Understand the difference between assets and liabilities
Assets appreciate in value and generate income. Borrowing money to purchase a car creates a liability, not an asset.
Rule 5 - Understanding types of income.
There is earned income which is more or less static, portfolio income which comes from your investments and passive income which is your money working for you through assets acquired which can result in unlimited earnings.
Passive income can be earned from rental of real estate, royalties from creations, such as a book you have written, or commissions earned if you are self-employed.
You should also note that earned income (received while working for others) falls in the highest tax bracket; portfolio income is less taxed; and passive income experiences the least taxation of all.
Rule 6 - It is okayto work for free
At least, when the goal is success of your own business. Some 90 per cent of small businesses fail because their owners depend on them to keep them alive and not the other way around.
When starting a business, you should have enough saved so that you do not drain the business before it reaches the point of solvency.
Rule 7 - Know good and bad debt
It is okay to borrow when you know the difference between good debt and bad debt.
It is how you use monies borrowed which matters.
If loans are used to acquire assets including real estate or a small business, that is good.
If loans are used to acquire liabilities (things that cannot earn an income for you) including clothes, shoes and for shopping and traveling, you are headed for the poor house.
Stay away from borrowing money to buy liabilities.
Rule 8 - Understand the power of leverage
Rich people work less and make more money by using their capital and the people they hire to gain positional advantage.
The money used is often other people's and the talent also often belongs to others.
Consider hiring competent people to run your business and using other people's money to make your asset base grow.
Rule 9 - Think rich,not poor.
Always focus on how you can make more money instead of worrying about debt. Get good mentors and follow them.
Look for opportunities in every crisis.
The poor think risk but the rich think returns. If returns can be higher than the risk, then you are on your way to earning passive income.
The poor are afraid to fail but rich people take chances, fail and try again. The poor hate debt, but the rich see it as a necessity.
It is okay to acquire a true asset through borrowing.
Rule 10 - Learn tosee opportunities
Some people see too many cars on the road. You should see the opportunity to open a car wash at competitive prices. Think of a problem that you have and find a solution. It may be the next big idea to hit the market.