The Wealth Formula

Attaining great wealth is very simple. The creation of wealth can be explained with a very basic formula. Although it requires a lot of hard work, consistency and struggles to build a fortune from nothing, the formula behind it is very easy to understand. Any simple minded person can understand this formula, whilst all the smart people are looking for complicated strategies and solutions.

Instead of spending a fortune on advisors, courses, books and lottery tickets in the hopes of cracking the code to financial freedom, you can simply follow the universal formula and put 110% into it.

There is NO magic pill. There are NO secrets. There are NO qualifications that will bring you a fortune. There is NO course that will make you rich. And there is NO one you can pay to build wealth for you.

The Wealth Formula = (Income – Expenses) + (Assets – Liabilities)

Maximise Earning. Minimize Expenses. Invest in Assets. Avoid Liabilities.

Earn More than you Spend, then Invest Wisely.

This is all you need to know if you wish to obtain a great fortune in your lifetime.

You must focus on increasing your income whilst simultaneously keeping your expenses low enough so as to allow you to accumulate enough cash flow in order to invest in income-producing assets. You can then focus on building multiple streams of income and passive income.

Cash is simply a tool to purchase assets.

The wealthy use money to buy assets that make them more money (long term gain).

The poor use money to buy toys and instant gratification (short term pleasures).

The rich know that money is not real.

The poor believe that money is real and are scared of it.

The rich know that real wealth is Time, Energy, Health, Resources and Family. They simply use paper and numbers to buy real wealth. Having financial freedom gives you the time to pursue anything you wish. A man with money can come and go as he pleases. A broke man is a slave to his boss and is one mistake away from financial ruin. 

A smart man will build financial wealth in order to create an abundance of time, energy and freedom in his life. Don’t fear money for it is not real. It is simply a big, global game. Whether you play to win or play to lose is up to you. Or you can waste your time crying about how money is the root of all evil and then go back to your job.

Steps to Building Wealth:

  • Maximise Your Income
  • Minimise Your Expenses
  • Save as much of your income as you can
  • Build a business/businesses
  • Invest Your income into Assets and Businesses
  • Build multiple streams of incomes
  • Minimize liabilities
  • Avoid Debts
  • Enjoy the freedom of having a consistent stream of cash flowing in
  • Use the money that you earn from your assets/businesses to do whatever you want to do and own whatever you desire.
  • Invest in good health and your family and friendships

Remember, as all great things in life, it requires consistency and discipline to build wealth. Nothing worth having comes to you overnight. Just as building a body and maintaining good health requires consistent daily effort, so does building and maintaining material wealth.

4 comments add yours

  1. Great reminder! Simple equation, but people tend to forget the saving and reducing expenses part.

    • People miss the simple answers right in front of their face. Just as the path to health is very simple, it is also the same with wealth. However, you must actually follow the path to get to the destination.

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