10 Wisdom-Based Wealth-Building Strategies
by: Gala Gorman
"It's the business of your life.
Imagine that you're Noah and God is telling you
that you need to build the ark. You might suspect that Noah was a bit
skeptical. Could it actually rain for such an extended period of time
that a small ship would be required to survive the storm? According to
the Bible, the answer is "Yes!"
So, when I suggest you build an ark of your own
- one of the financial variety - how much convincing will you need? Fortunately,
this ark won't require a that you assemble a seemingly useless structure
in your backyard and it won't require a 1,000 year flood to come in handy
either. This ark will be something you can be proud of and it will provide
you with financial security every day of your life.
While any approach to creating financial security
must suit the values and needs of the individual, these are the Top 10
Wealth-Building Strategies that I believe will ensure that you can weather
any storm life sends your way.
1. Use the A-R-KTM Technique.
A. A is for Accumulating Assets. This may seem like
a simple concept but in today's challenging circumstances it is much too
easy to spend everything you make and more.
B. R is for Retiring Debt. Debts aren't called liabilities
for nothing. You need to work towards reducing and eliminating debt when
everyone else is focused on using every ounce of equity.
C. K is for Keeping Commitments. Once you make a
commitment to yourself to apply the A-R-K TechniqueTM, you need to keep
it! You build confidence in yourself and others this way.
2. Prepare for the inevitable rainy day.
A. Understand life's cycles. It is a fact of life
that you will experience challenging times - in a way times like these
are meant to adjust your course. Life's challenges are much easier to
face with financial security.
B. Maintain a positive AND realistic attitude. It
might not seem like positive thinking to plan for a rainy day. I believe
planning and preparation are the most valuable tools you can use to deal
with life's problems.
C. Develop plans for your A-R-K. You need a plan.
God gave Noah a "blueprint" to build from. You need a financial blueprint.
What will your ark look like when it's completed?
3. Acknowledge where your wealth comes from.
A. GUS is the source. Some call it "God", some "Spirit",
others "the Universe", and still others have developed their own term
to relate to. The acronym GUS (God's Universal Spirit) honors all the
B. Give back to those who gave to you - spiritually
and otherwise. You might consider this tithing. Tithing is your way of
demonstrating your faith in an endless supply.
C. Subscribe to the Universal Law of Use. This universal
law applies to every department of your life. Get rid of clutter and anything
else that isn't serving a purpose. One person's junk is another's treasure.
4. Develop sufficient liquid resources.
A. Cash is King! I can't stress enough the value
of having funds readily available that can be accessed without a significant
reduction in value. This is the "hull" your ark is built on.
B. Calculate your cash reserve requirement. Do you
know how much you would need to meet your minimum financial responsibilities
for a period of six months?
C. Define "liquid". Liquid resources are assets
that can be converted to cash without penalty or market fluctuation. You
need a six month cash infusion plan that is easy to execute in an emergency.
5. Understand real estate investments.
A. Own your home "free and clear". Mortgage brokers
encourage you to borrow every dollar you can - especially with interest
rates at historical lows. With this approach, you'll forever make house
B. Use conservative values for planning purposes.
With real estate, values can fluctuate dramatically based on factors completely
out of your control. How much would you realize if you HAD to sell?
C. Are you prepared to run a business? Owning real
estate (unless it's your personal residence) requires you to run a business
that you may not consider a valuable use of your time.
6. Understand equity market investments.
A. Evaluate your risk tolerance. Investment advisors
typically discuss the concept of risk with their clients, but don't face
reality. Investments come with a significant chance that value will decrease
B. Accept that the stock market is illogical. There
are many "systems" available today that purport to make the market predictable.
The truth is there isn't much logic behind market values.
C. Fund managers are paid even when they're wrong.
Most mutual funds underperform the market by 3%. This is in part due to
the fact that fund managers are paid handsomely whether they perform well
7. Know the value of your income stream.
A. Build a sellable business. When you're ready
to "retire" will the work you've done to build your business have lasting
value, with or without you there? With proper planning, your business
is a valuable asset.
B. Create lasting value from your career/job. If
you aren't working in your own business, you can make the most of the
income stream from your paycheck and benefits. Take advantage of employer-sponsored
C. Supplement with investment income. Your investment
strategies can generate additional cash flow if required. Depending on
the phase of your financial plan, you have the option of adding to useable
8. Limit your "use" assets.
A. Depreciating assets are necessities or luxuries
- maybe both. In most geographical locations, a vehicle is a necessity.
Does your vehicle meet your transportation needs or does it satisfy a
B. Know the hidden costs of expensive "toys". We
all have them - assets that are nothing more than grown-up toys. You need
to know what those toys really cost to maintain.
C. Money buys experiences. When people are surveyed
about what makes life more satisfying, the answers vary. Consistently,
people agree that they enjoy traveling, dining and the outdoors. It takes
money to have fun!
9. Set goals.
A. Have a target you're moving towards. Without
a comprehensive plan, you will have difficulty adjusting when you face
life's challenges - financially or otherwise.
B. Define your wealth-building strategy. Once you
know where you want to end up, you can determine which strategies should
be implemented to meet your goals.
C. Embark on the journey. Just get started! Realize
that you will have setbacks, but you will never get there unless you start
rowing in the direction you've determined you want to go.
10. Protect what you've built.
A. Buy insurance for predictable losses. Property
insurance protects some of your assets, but you should also consider the
risk of losing your income stream. Life and disability insurance can provide
B. Add layers of protection for unpredictable losses.
There are many ways to protect assets from the uncommon disaster - a lawsuit
or other occurrence. Asset protection tools can help you rest easy.
C. Create a succession plan. Whether you own your
own business or want to provide for your family in the event you are unable
to do so, any effective financial plan should consider succession.
You might be feeling like a sound financial plan
leaves no room for fun or enjoying life's pleasures. On the contrary,
your plan should serve your individual needs and put you on the path to
financial freedom. If you dream of driving a luxury vehicle or taking
a cruise around the world, your plan should factor in the costs so you
know you are creating a financial future that is real and lasting - not
just a "mirage".
Albert Einstein (1879 - 1955) called compounding
interest the 8th wonder. It can work for you, or against you. When you
invest it works for you. When you borrow it works against you! There is
a reason God told Noah to take a male and female of each species aboard
the ark.to multiply. That is what compounding interest does for you and
your financial ark. Creating a wisdom-based financial plan can help you
put the 8th wonder to work for you.
The Top 10 Wisdom-Based Wealth-Building Strategies have been developed from the A-R-K TechniqueTM (ARKTM) which is at the center of Gala Gorman's Wealth Management services. Your FREE ARKTM Assessment is available at http://www.GalaGorman.com.
Gala Gorman, PhD CPA CFP is committed to assisting entrepreneurial individuals in building and managing their organizations and wealth. Gala is a certified public accountant, certified financial planner, published author, executive development coach and business consultant with over 25 years of experience.
Call today for your FREE initial consultation to discuss how Gala and the A-R-K TechniqueTM can help you build and manage your wealth.
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