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One problem with our society as it relates to building wealth, we do not train our children in personal finance. Most schools do not have mandatory finance classes, even though everyone will use it at some point. We need to make sure that we are teaching our children these skills.
In this chapter, Robert lists a series of “steps” to becoming wealthy. I am going to list them here as there really is no better way to write about these.
Find a reason greater than reality: The power of spirit
Determine why you are doing anything - without a good reason you are going to fail. You need to know your wants and “don’t wants” to help drive the motivation to do it.
Make daily choices: the power of choice
You can choose to waste time or do something - if you want to build wealth choose activities that further that goal. He recommends investing in education - perhaps buy key books on a topic, or attend a seminar related to your wealth strategies.
Choose friends carefully: the power of association
This one is easier said than done, but make sure you surround yourself with like-minded people. If you have friends wasting money at the club every weekend, you may find yourself there as well.
Master a formula and learn a new one: the power of learning quickly
Always be learning new skills, and once you have something master, move on to something else. It keeps you moving forward and your mind sharp.
Pay yourself first: the power of self-discipline
You need to be able to control yourself and your spending. Make sure you are paying into your savings (401k, indexes, rental properties, etc.).
The best ways to pay yourself first are simple. Don’t get into large (unproductive) debt and keep expenses low. If you find yourself stuck, find ways to make more, don’t sell assets that make you money.
Pay your brokers well: the power of good advice
A good broker earns their keep and should make you more than they cost you. Ask them what their holdings look like, make sure you are on the same page. If they are not willing to show you, they are probably not worth hiring.
Be an Indian giver: the power of getting something for nothing
Know how fast you get your investment back and the expected ROI. These are key elements before allocating assets.
Use assets to buy luxuries: the power of focus
Again, if you can’t afford it, don’t buy it. If you want something, find a way to take what you have and turn it into assets that produce enough to buy what you want.
Choose Heroes: The power of myth
Heroes and mentors are important, you would be surprised how charitable people can be. If you look up to someone reach out, and they may even answer a few questions.
Teach and you shall receive: the power of giving
Once you have achieved your goals, give back. Be a mentor, donate to valuable causes, find a way.
I am just a regular guy who does far to much research on financial independence and early retirement (FI/RE). I look forward to sharing my journey with you all.