The key problem most people have is that they earn their main or sole income from a “job”.
Do you know what they say “job” stands for?
'J'ust 'O'ver 'B'roke
In my experience this is true. If you work for someone else then you are extremely unlikely to be financially free let alone rich. In fact, I found I was financially insolvent and pretty much broke despite a relatively high monthly wage.
Let’s first of all consider the definition of “rich”. I am really keen on Robert Kiyosaki’s (of “Rich Dad Poor Dad” fame) definition of rich:
He describes being rich as the ability to be able to stop working tomorrow and be able to maintain your current standard of living without eating into any of your savings or selling any of your assets.
So this means that your only sources of income can be “passive income”.
Passive income includes things like interest from savings accounts; rental income; dividends from shares in quoted companies and income from businesses which you might have a stake in but which you do not actively work in. Other things might include royalties from books or music , or perhaps commission from past activities in network marketing businesses.
You see, the key factor is that you no longer have to work and yet you continue to maintain your existing lifestyle or the lifestyle you desire. So on this basis we should all work out the level of income we need or would like and build passive income streams to satisfy this.
So ask yourself now: if you gave up work (your “job”) tomorrow, how long could you maintain your current standard of living before having to run back to get another “job”?
How long could the interest off your savings (if you have any?!) or rental income from your portfolio of properties (?!) maintain you in your current lifestyle, pay that mortgage etc? Not very long?
Now, hands-up who else is financially insolvent or broke according to this very revealing definition?!
We have some work to do and I will show you how in snippets via my blog - but at least you can hopefully now see where you (and possibly 95% of the rest of the population) are going wrong?......
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