- - my WEALTH program - -

My Wealth Program
I was down at the Esplanade having breakfast the other morning & reading from Jack Canfield's book:

The Success Principles:

how to get from where you are to where you want to be

Great read!!

In particular, the chapter entitled: You get what you focus on

Dr John Demartini said

"you must seek wealth for it to seek you"

You get what you focus on
Whether it is a new job, building a new business, acquiring money, wealth & a rich lifestyle

Canfield says that you must decide to be wealthy - to be wealthy is a decision that each person must make! The thought occurred to me:

- do you have to know what wealthy means?
- & do you have to know how to acquire wealth?

NO you dont! You dont have to worry about HOW you are going to become wealthy

According to Canfield (See the Secret)
- first you need to DECIDE what you want
- then you need to BELIEVE that it is possible
- you need to recognise that you DESERVE it
- then you FOCUS on it by thinking about it and VISUALISING that you already have it
- Finally, you need to pay the price to get it - disciplined EFFORT and PERSEVERANCE over time

NEXT: decide what wealthy means to you

Jamie MacIntyre helped me with this - he wrote an interesting book called:

What i didnt learn at school

but wish i had

Chapter 10 in particular is refers to establishing your financial goals. He begins by asking the question:- What is the true measure of wealth? He provides this as the answer:-

It is how many days from now you can continue to live
without the need to work!

Then he provides a way for you to figure out how to make your Personal Financial Dreams a reality!!

He discusses FIVE levels of FINANCIAL WELL_BEING to help clarify what financial dreams are important for you to achieve.

- - - the 5 LEVELS of a FINANCIAL PLAN - - -

1. Financial Protection
2. Financial Security
3. Financial Independence
4. Financial Freedom
5. Absolute Financial Freedom

After you define your Financial Goals:- short-term (3-36 months), Intermediate (3-10 years) & long-term (10+ years) then you can figure out what level of Financial Well-being you need to support your Financial Goals

First Level: Financial Protection
This is your liquid assets - this is the amount of money you need to cover your current monthly overheads: - for example

• Mortgage/rent
• Power
• Transportation costs
• Food
• Insurance and so on

Notice that it does not cover you credit card of debt repayments -- it is simply the amount of money you need to cover the basics & to survive financially for each month - then you DECIDE how many months of protection you want.

My financial protection plan
My monthly overheads:- - - $3000 (approx)
I decided that i wanted 6 months protection == $18,000

So, i need to put aside $18,000 to complete the first level in my Financial Plan


Second Level: Financial Security
This is the amount of money you will need to be independent of the basic necessities such as food, clothes & transport i.e Your Financial Protection figure

Thus, $Financial Security = $Financial Protection

So, if my $Financial Protection = $3000 per month
Then, for 12 months of security i need $36,000

So the Annual income i need from investments to achieve Financial Security FOR LIFE = $36,000


Third Level: Financial Independence
This is the amount of money you need to be Independent from work!

Financial independence is achieved when your investments produce an income equal to your WORK INCOME

My Monthly Income = $5000
Over 12 months = $ 60,000

So, my goal is to produce $60,000 per annum from investments to achieve Financial Independence


Fourth Level: Financial Freedom
This level of income is about LIFESTYLE - this is the amount of money you require to live in the lifestyle you desire:

So, besides your currently monthly income, you will need enough extra income to purchase the lifestyle, the 'other things' you would like to have but cannot currently afford!!

Perhaps:

• the hummer
• the beach side property
• the 35ft boat
• the regular holidays in exotic locations

and the list goes on!!

Here is how i worked it out:

1. Calculate the extra monthly income you need to buy the 'other things'
2. Add that to the amount you need for Financial Independence
3. This figure represents the monthly income you need for Financial Freedom

SO - for me

1. Extra income i would like =$10,000
2. Monthly income required to achieve Financial Independence = $5000 [see above]
   
3. Monthly income required for Financial Freedom = $15,000
   

Over 12 months = 6 x $15,000 = $180, 000 to achieve FINANCIAL FREEDOM


Fifth Level: Absolute Financial Freedom
This occurs when your investments provide you with the means to do whatever you want, whenever you want, wherever you want, and with whom ever you want!!

To work this out:

1. Create a list of all the things you would acquire if you were absolutely financial free & figure out how much this would cost you per month
   
2. Add this to the monthly amount you need for Financial Independence
3. Multiply the figure (monthly) in item 2 by 12 (annual)
   

For me:

1. Total additional income required = $25,000
2. Monthly Financial Independence figure = $5000
3. Total Monthly amount required for ABSOLUTE FINANCIAL FREEDOM = $30,000

12 months x $30,000 = $360,000 per annum to achieve ABSOLUTE FINANCIAL FREEDOM!!!



Back to Canfield discusses the steps towards weatlh as:

Step one: determine your net worth

Step Two: Determine what you need to retire

Step Three: Become aware of what you are spending

Step Four: Become financially Literate


Canfield also refers the WEALTH QUADRANT
This model was developed by Lee Brower who refers to weatlh as assets categorised into four areas:

• Human assets
• Intellectual assets
• Financial Assets
• Civic assets

Your human assets are those assets that enrich you:- it comprises of family, character, values, health, happiness, well-being, ethics & morals, habits, & relationships

Intellectual assets includes all of your accumulated knowledge & experience:- wisdom, formal education, ideas, life experiences, reputation, skills & talents, alliances

Your financial assets is the accumulation of cash, stocks & bonds, retirement plans, businesses, real estate and so on

Finally, your civic assets is your contribution to taxes, charities & scholarships plus private foundations and perhaps research & development

Something to think about
Hei kona
Urban