It doesn’t take a weather report to convince the average person that life is full of surprises and challenges.
So, how do you prepare to weather a financial storm? Here’s how in four steps:
Solution #1: Take Control of your Personal Income
Research confirms that those who are entrepreneurial-minded are more likely to accumulate significant personal wealth.
Bert Whitehead, a financial specialist and writer, conducted a study which found that only 20 percent of our working population are self-employed or business owners. However, three-quarters of millionaires who work are self-employed or business owners.
Successfully self-employed people also learn valuable money-making skills and principles out of necessity. They develop an aptitude for sales and service, attracting customers that return. They learn how to tough out the slow growth times, and bootstrap when necessary.
Solution #2: Develop Multiple Streams of Income
Smart, business minded people diversify their income. Rather than trading dollars for hours doing one thing, they leverage their time and do not rely on only one business or investment alone. Many wealthy people own investment real estate (even if it’s not their primary business), receive dividends from participating whole life insurance and make investments such as bridge loans, peer lending, or businesses with which they have expertise. They put their money to use and concentrate on cash flow rather than accumulation.
Solution #3: Save Money Like a Millionaire
Well, according to the work of Thomas Stanley and William Danko which formed the basis of the book, The Millionaire Next Door Many millionaires and multi-millionaires describe themselves as honest and frugal, squirreling away on average more than 15 % of their incomes every year. Most could live on their savings for 12 or more years at their current standard of living.
Interestingly, Stanley and Danko discovered that most millionaires did not inherit their wealth, and don’t reside in homes in the most expensive neighborhoods, and don’t drive fancy cars. Self-made millionaires prefer to save their money rather than spend it on high-priced status symbols.
Solution #4: Grow Your Money Safely
Those with wealth don’t rely on luck or subject their dollars to the whims of the market. They don’t confuse saving with investing.
Prosperous people don’t hand their assets over to someone else’s control without knowing they can expect predictable, even guaranteed results. The truly wealthy leave little to chance.
Unfortunately, too many people don’t save enough, so they try to make up for their lack of savings by taking larger risks, chasing unrealistic rates of return. They try to “beat the market” (even though the professionals rarely can).
The wealthy choose solid investments over get rich quick schemes or the ups-and-downs of the stock market. They choose consistent savings, solid growth, and the principles of prosperity over market hopes and promises. Often, their portfolios consist mostly of business assets, real estate, and guaranteed assets such as cash value life insurance. In fact, most millionaires don’t go near the stock market with more than 20% of their assets, according to Stanley and Danko’s findings.
Those who live by the Principles of Prosperity don’t cross their fingers in the hopes that a stock doesn’t fall or that they’ve chosen just the right moment to sell high. No, they spend their energy creating value, which leads to wealth, not worrying about the Dow Jones or the prices of commodities.
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