5 strategies for increasing your wealth 2015

© 2015 Professional Education Institute2

5 Strategies For Increasing Your Wealth

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5 Strategies for Increasing Your Wealth

Introduction

Becoming rich doesn’t just happen.

Becoming rich is the result of purposeful planning, focused implementation, and constant refinement. However, those that struggle with building wealth fail to realize that this process must be accompanied with a set of strategies or mindsets that form the foundation for their work. They don’t understand that without these strategies—strategies which the rich consistently use—they’ll bounce around from opportunity to opportunity and fall back into the bad habits that put them in the Rat Race to start with.

The reason that the rich become and stay rich is because they use these strategies and they allow them to influence their investing, money, and life in general. They know that the way you think about money and life contributes more to financial well-being than anything else. Thoughts drive actions and actions proceed results.

So as you plot or refine your course to become financially free, know this: if you work to become rich while holding on to poor or middle class thinking, it is no different than trying to run a marathon while dragging a cinderblock chained to your waist. You can do it, but it will take longer and be more difficult than if you would just free yourself from the dead weight.

Think from the Right Side of the CASHFLOW QuadrantUnderstanding the CASHFLOW Quadrant and how each quadrant thinks is the foundational strategy for your plan to become rich. If you aren’t already familiar with this powerful mnemonic, the CASHFLOW Quadrant categorizes people based on where they derive their income. Each quadrant within the CASHFLOW Quadrant is unique, and the people within each quadrant share common characteristics in addition to how they make money.

The diagram below is the CASHFLOW Quadrant and what each letter in the quadrant represents:

®

E is for Employee

S is for Small Business or Self Employed

B is for Big Business

I is for Investor



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When it comes to becoming wealthy, those who are able to create and maintain wealth are found on the right side of the quadrant. They are the investors and business owners. They are those who think differently than those on the left side of quadrant—the employees and self-employed. Regardless of which quadrant you are presently in, becoming rich begins—and ends—with a commitment to take the necessary steps to move and stay on the right side of the quadrant.

Moving quadrants in terms of where you actually make your money can take time, but how you think about money can start today.

People on the right side of the quadrant think differently about money, investing, risk, and security. For example:

E and S Quadrant Thinking B and I Quadrant Thinking

“Go to school and get a job.”“ Educate yourself financially and create income.”

“Save your money.” “Put your money to work for you.”

“Investing is risky.”“ Investing isn’t risky. Being financially illiterate is.”

“ [The government, My company, etc.] will take care of me.”

“ I’m responsible for my own financial well-being.”

“Money isn’t everything.” “ Money isn’t everything, but it provides me opportunities to do what matters most to me.”

Take time to listen to how those around you think about money. To what quadrant do you think they belong? What about your own internal dialogue? Do you think more like the E’s and S’s or the B’s and the I’s? Where you are in the CASHFLOW Quadrant today isn’t as important as how you think; because today’s thinking will create tomorrow’s reality.

All of which leads to the next strategy for getting rich.

Eliminate “I can’t” From Your VocabularyIf becoming rich was easy, then everyone would do it. However, people make becoming wealthy more difficult than it needs to be and most do it without even realizing it.

Henry Ford said, “Whether you think you can or you can’t, you’re right.”



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The main reason that E’s and S’s stay in their respective quadrant is because they hold on to the phrase, “I can’t.” This phrase and its variations, like “that’s too risky,” “that won’t work here,” and “I don’t know how,” all are an excuse for taking responsibility for one’s financial future—and for that matter, responsibility for one’s life.

The real problem stems from the fact that most people don’t realize how quickly they discount their own ability. Years of listening to nay-saying friends and family, bosses who strive to keep employees under their thumb, and an overall fear of failure lead to an internal dialogue of doubt. This doubt manifests itself verbally with “I can’t.”

The truth is that you can! Through education, trial and error, coaching, and good old fashioned hard work, you can make your financial dreams a reality. But if you don’t even think it is within the realm of possibilities, then just like Henry Ford said, “you’re right.”

When you eliminate “I can’t” from your vocabulary, an amazing thing happens. You begin to start thinking beyond your mental ruts and begin to think more creatively. Without the autopilot reaction of doubt, you ask, “How can I?” You see possibilities and options begin to open up for you.

All of which leads to…

Become a Problem SolverSuccessful investors and entrepreneurs don’t sell a product or a service. They sell a solution. In fact, some of the greatest entrepreneurs have sold solutions to people for problems they didn’t even know they had. Stop and think about the days before Facebook. Was anybody really upset that they were unable to keep up with the daily minutiae of their high school classmates? And yet, Mark Zuckerberg is worth over $33 billion.

Successful investors and entrepreneurs are problem solvers. Problem solvers look beyond obstacles and barriers and see solutions and opportunities. They think creatively and visualize something better where the majority only see what currently is.

So how do you become a problem solver?

People mistakenly think great problem solvers have been blessed with that innate ability. They think it is something that just comes naturally. While that may be the case for some, problem solving is more of a skill than a gift and anyone can develop it.

Knowing how to solve problems comes from one’s ability to effectively draw on meaningful experiences. By knowing why certain approaches have or haven’t worked in the past, one can develop their own intuitive ability for problem solving.



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To gain this experience, there are two paths. The first is through your own direct experience. By trying new things and learning from the results you collect a wealth of firsthand knowledge. You also receive the benefit of making—and learning—from your mistakes. While these can be painful at times, they will develop your problem solving ability exponentially.

The second way to gain experience is by learning with or through the exploits of others. Experience doesn’t have to be solely from your projects. Networking with fellow investors and entrepreneurs at Investment Club meetings or at Chamber of Commerce luncheons are just two ways that you can converse with other problem solvers and learn from them. Reading trade journals, biographies, blog posts, etc. can also help you learn from experts and see a problem and solution from beginning to end.

The more you can immerse yourself in problems and push your way through to creating solutions, the more you will develop your ability to solve problems. With your ability to solve problems, you will then be better able to…

Properly Invest in Your Chosen Asset ClassIt isn’t just enough to decide where you will invest. You must also decide how you will invest in your chosen asset class. Your decision will not only influence your investment decisions, but how you’ll direct your educational pursuits.

While there are as almost as many opinions on what and how to invest as there are investment opportunities, certain approaches to investing will help you exit the Rat Race more easily than others.

For example, when it comes to investing in real estate, there are two main approaches to which investors can subscribe. One is investing for capital gains and the other is investing for cash flow.

Investing in capital gains operates under the hope that the value of a property will rise or appreciate. This rise in price will allow the investor to sell the property for more than he or she paid for it and pocket the difference as a profit. The problem with investing solely for capital gains is what happens if the price stays the same or goes down? It doesn’t take a genius to quickly realize that the investor is stuck with the loss. This is why the real estate crash of 2008 left so many speculative investors in financial ruin. As soon as the property fails to appreciate, as was anticipated, an investor’s options are severely limited. This is not the Rich Dad way.



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Investing for cash flow, on the other hand, operates under the idea that rents for a property will cover expenses—including the mortgage. You receive income AND your tenants pay down your debt. It is a double win. Also, with a positive cash flow, it becomes somewhat irrelevant as to whether or not the selling price of a property goes up or down. If it goes up, that’s all the better because one then has the option to refinance and pull money out. If it doesn’t, that doesn’t matter. You’re still receiving checks. It was this approach to real estate investing that allowed many investors to make it through the real estate crash.

Another example of investing the right way is in starting your own business. While doing so is very appealing to those wanting to exit the Rat Race, many go about it the wrong way and end up trading one Rat Race for another one.

Part of the appeal of starting your own business is being your own boss and having the perceived freedom that it brings. What most would-be business owners fail to understand is that if a business is not set up with the correct and necessary systems, they will find themselves owning a job and not a business.

The overarching question you need to ask yourself when building a business is whether the business can still run and grow without your presence. For example, if you are the only one that can bring in clientele and fulfill your product or service—like an auto mechanic—then the business will rise and fall with how much you work. On the other hand, if you record and sell videos of yourself showing how to repair a car for the do-it-yourselfer or patent a tool that helps thousands of other mechanics, then you can be making money while you sleep.

The point is that it isn’t enough just to invest, you need to be clear on how your approach will open the door for your exit from the Rat Race.

Do Something!!!Finally, a bias for action is one of the key strategies and mindsets of the rich. Action for action’s sake isn’t necessary, but the sooner you can apply what you are learning, the faster you will internalize it and make it your own.

Some people put off taking action because they don’t know everything. They fool themselves into thinking that if they just got a little more information, then they would be ready to move forward. They fail to realize that with any investment there will always be the unknown.

The rich understand that sometimes the unknown will lead to mistakes. However, while sometimes costly, those mistakes can be priceless in terms of lessons learned. They know that by taking action and doing something, they help themselves understand how to invest better than any book or seminar could.



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The Bottom LinePoor strategies and mindsets can derail even the best plans. If your plans are the computer program, then the strategies listed above are the speed and efficiency at which you are able to run the program. Poor strategies will be like the out-of-date computer that takes forever to load.

Change your strategies to those of the rich and you will be able to achieve your financial goals faster than you ever thought possible.

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Discover the power of working one-on-one with your own certified Rich Dad Coach to help you invest smarter, build and protect your wealth, and create the cash flow you need to live the life you desire. Remember, Robert’s Rich Dad was his first coach and helped him become successful by teaching him how to make his money work for him, who’s helping you? Get your free introduction to Rich Dad Coaching and learn how a Rich Dad Coach can help you do the same. Call 1-800-240-0434 and mention extension 3187 to receive your FREE introduction to Rich Dad Coaching and to get 6 months of FREE Coaching with any new program.

5 strategies for increasing your wealth 2015

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