Personal Goals

     In my opinion, working hard and saving money are important if you want to be secure and comfortable. But if you want to be rich, working hard and saving money will probably not get you there. On top of that, people who work hard and save money are often the same people who say "investing is risky." But most people I talk to are simply too busy working and they do not "have" the time. I often hear "I'm not interested in learning to invest. It's a subject that does not interest me." Yet they fail to see that by saying that, they become slaves to money, working for money, having money dictate the financial boundaries of their life, living frugally and within their means, instead of investing a little time, following a game plan, and having money work for them.


     At work, I am constantly reminded about what money actually is. I think of money as simply a medium of exchange. In the world we live in, money by itself has very little value. As soon as I have money, I want to exchange it for something of more value such as a knowledge in the world of finances, or simply a real estate investment that will create more money. For this reason I have put together a few of my personal reminders I must remember every day to follow my financial game plan:

1)      Always focus on building my “asset” column to produce cash flow.

2)   Be careful when I take on debt. If I take on debt personally, make sure it's small. If I  take on large debt, make sure somebody else is paying for it. 

3)   Ask myself: “How soon do I get my money back, and how much income will I receive for  the rest of my life, after I get the initial investment money back?”  

4)   Remember, for every liability I have, I am somebody Else's asset. 

5)   Always invest for CASH FLOW, not capital gains  

6)   If luxuries are bought, only pay by the means of cashflow.    

 

One more thing: One of the basic rules of investing and financial intelligence is to always know what kind of money you are working for. Simply put, there are three difference kinds of income: 

1) Earned income: generally derived from a job or some kind of labor. In most forms it's a pay check. I also think it's important to note that it's the highest taxed income, so as a result, it's the hardest to build wealth with. 

2) Portfolio Income: generally derived from paper assets such as 401(k)'s, IRA, stocks, bonds, mutual funds, etc. This is by far the most "popular" form of income, due to the simplicity and lack of knowledge needed. 

3) Passive Income: This is my favorite. Generally derived from real estate related investments. I guess it can also come from royalties of patents or license agreements of some sort. But, most of the time, this income is generated from real estate. Here are many tax advantages available which makes me really excited! It is here where the magic happens. By simply being smarter with your money, and maintaining the life long goal of turning your "earned income" into "passive income," your building your financial future, free of stress and hard ache, leaving time to do what your ultimately love doing.