How to Properly Manage Your Money Like the Rich
How to Properly Manage Your Money Like the Rich | Tom Ferry
Money is a tool. Nothing more, nothing less. Money is a tool and if you don’t use it and play the “game” right and follow the steps you wont get the results you desire.
It is not how much money you earn, it is all about what you do with the money that matters.
All of the studies show that five percent of the plant are generational wealth. Fifteen are middle class, and the rest of the eighty percent are lower class, poor people of the planet.
5% Are generational wealth: At least five million dollars, have their assets paid for so when the time comes, and they die they can pass their assets off to their next generation.
15% is the middle class: They have a house paid for, have a little saving and can splurge once in a blue moon. Go on vacation, x, y, z. These people are happy comfortable people.
80% Lower class, poor people: These people when they are older will still have to work to survive, will be dependent on the government or family members to help them live.
The 80% of people get their money and put in into their personal account. Not a business account. When they do this, they end up paying a lot more in taxes. This group of people should start an LLC or some sort of established business. Paychecks should be going to the business not you personally, this way they will begin to take advantage of all of the tax benefits.
POOR PEOPLE GET CHECKS AND JUST START SPENDING. THEY NEED A PLAN TO HELP THEM MANAGE THEIR LIFE. THEY BELIEF THEY WORKED SO HARD FOR THIS MONEY SO NOW THEY EARNED THE RIGHT TO OVER INDULGE AND NOT HAVE TO WORRY ABOUT THE FUTURE. THESE PEOPLE ARE HURTING THEMSELVES FINACIALY, MENTALLY IN THE LONG RUN.
The 15% of people who receive checks have those checks go directly to their business account. Leading to the having 3 different accounts all together. Your business account will be divided into its Tax account, Business expense account and its Home account
Now that you are established as a business you can write off all type of things from your business account. Cars, parts of your home. You should do much more research into this. This stuff is great.
Depending on what your growing goals are Home or Business you will define how much you put into each account. The numbers should be consistent annually, and not fluctuate from month to month.
- Business expenses account: This account will run your business this will pay for daily expense of operation, marketing, payroll and whatever else it takes the business to operate. (Marketing cost should be ten percent of expected gross revenue. According to Tom Ferry. Not me!)
- Home account: This account that money is being put in to is take care of all of your home life bills. The people who are managing their money through business accounts will be able to take advantage of way better tax advantages. May even have an account who will all advise you how to invest your money.
- Tax account, Put in 33% per check: this account will be where you put money into so at the end of the year you are not paying taxes. Well you will still be paying taxes Like it or not Uncle Sam is getting his cut. This way you will be prepared for what is to come at the end of the year and more than likely you will be coming out ahead at the end of the year.
THERE IS SMART DEBT AND THEN THERE IS DUMB DEBT.KNOW THE DIFFERENCE. CAR LOANS, CREDIT CARD WITH HIGH INTEREST RATES IS DUMB DEBT. GETTING A HOUSE OR ASSETS WITH A IS SMART DEBT.
This is how the wealthiest people of the world the five percent manage their money. They Do the exact same thing as the fifteen percent just a little bit differently. Their tax account is still at thirty three percent. Their Business account is pinged at thirty three percent. This is done lick this so the business will keep all profits in the business.
This next part is why the rich get richer. They have an account designated to investing. Their home falls into this category. They do not look at their home as a place to live but as an investment. Yes I did put my own spin on how I drew this money management map out. My Investment Account is broken down into Home(s), New Business, Stocks and bonds, Retirement, and the Happy Fun account.
- Home(s): Should be the place you live. Buy more and earn profit from renting out.
- New Business: Build a new stream of income. When you are at this new starting point your first business should be somewhat on auto pilot operating itself. Renting out one of your homes is a new stream of income. Never stop getting new streams of income. Be structurally stable in all areas before going in gun hoe buying or starting everything and end up losing.
- Stocks and Bonds: Talk to a broker or take it slow and steady.
- Retirment: Find somewhere that offers good interest
- Happy, Fun: Live Life. Enjoy what you have responsibly. Share it with others.
WEALTH IS MONEY. RICHES ARE WHAT YOU HAVE IN YOUR HEART.
MONEY GOES WHERE MONEY IS.
WHAT DO YOU DO WITH YOUR MONEY?