After watching "The Secret" I began researching the contributors in the movie. One of which were Loral Langemeier author of the book "The Millionaire Maker". I absolutely loved the book and use Loral's techniques in my own life.
Here is what Loral has to say about building wealth:
Wealth cycle investing isn't a scheme, a plan or even a strategy. It is a system that produces results when followed. Because it is a system and not a strategy, it encompasses and allows for a wide range of investment ideas and strategies. For example, one person can become a millionaire by investing in single family rental properties, another person might create new cash flow businesses: while a third person may opt for both real estate and business creation. By following the 12 building blocks of wealth cycle investing, you are increasing your chances of success. Here is a brief summary of the 12 building blocks of wealth cycle investing:
1. Establish a Financial Baseline- This identifies where you are today-your income, expenditures(and net income), and net worth (your assets minus your liabilities). It's surprising how many people can't tell you their net worth (or don't want to).
2. Establish Your Financial Freedom Day- This is your goal- the result you will obtain by following the wealth cycle. You identify your expected net monthly income and net worth within a particular time frame. This is the lighthouse that guides you through the investment seas.
3. Conduct a Gap Analysis- Wat's the gap between where you're going and where you are today? The gap analysis helps you to determine which of the remaining nine building block you'll do next. The process varies from individual to individual, so your sequence may differ from what I show here.
4 Create a Cash machine- Your cash machine is not necessarily your job. Ideally, this is a business you create (possibly in addition to your job) that will produce additional cash flow for your investments.
5. Entity Structuring- You'll need to protect your assets and reduce your taxes to increase your wealth. Entities (LLC's and Corporations) protect you and your money.
6. Forecasting- Start living your life like a business. Forecast your revenues and expenditures so that you can make steady payments from your cash machine into your wealth account.
7. Build a Wealth Account- You purchase new assets from the money you have in your wealth account. You can manage your debt with other funds, but your wealth account money is strictly used to buy assets (which increase your monthly cash flow and your net worth).
8. Manage Your Debt- Reduce your debt-not first, but a long with building your wealth account and buying assets. Often, your debt payment can be made from the money you can earn on your assets, instead of from your paycheck.
9. Buy Assets- Become an asset junkie (I know you will). Invest directly in real estate, businesses, and even oil wells. By doing so, you'll increase your monthly cash flow and/or your net worth.
10. Lead Your Wealth Team- Work on your leadership skills so that you are leading your accountant, real estate agent, attorney, assistants, and others. Your wealth is up to you, so don't leave it in the hands of others.
11. Mental and Emotional Conditioning- What keeps most people from becoming wealthy isn't a lack of opportunity- it's how they think. Start thinking like a millionaire, and you'll soon find yourself acting like a millionaire. Before long, you will BE a millionaire.
12. Work With a Team- There is no such thing as a "self made Millionaire." Thee are only team made millionaires- people who know they need a strong team, including field partners, mentors, and professionals.
The wealth cycle is designed to make anyone wealthy, regardless of your starting point. Follow the cycle, but do it with a team. You will be well on your way to becoming a millionaire.
Loral Langemeier is founder and CEO of live Out Loud and the author of "The Millionaire Maker." Learn more at liveoutloud.com
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