Hi ric ,
In the prior two lessons I explained the two situations where
wealth planning can be accomplished using exclusively paper assets.
The shocker is that most people who want to build wealth don't
fit either of those two situations; yet, traditional financial
advice offers no other tools to help them.
I believe it is one of the main reasons so many people aren't
reaching their retirement goals. It is why I got in this business -
to provide the alternative education you need to understand how
the wealth building game really works.
Too many people are not being served by traditional financial
advice. They can only sell you paper assets (which are fine to
preserve and grow the wealth you already built but don't work
well for building wealth in the first place.)
You may need to consider adding business ownership and real estate
to your wealth plan. These are the two wealth building asset
classes financial advisers typically don't talk about (because they
can't sell them) even though they are essential components to many
wealth plans.
Just to be fair, however, business ownership and real estate aren't
for everyone either. These two asset classes have their own set of
issues (there is no perfect solution) and require far more active
involvement to create excess returns.
You must have entrepreneurial skills and a deep commitment to your
vision to compete. Additionally, the risks are much higher and the
outcome is less certain. Finally, both of these asset classes
require a higher dedication of your scarcest resource - time.
With that said, if you have what it takes you can gain huge
leverage and tax advantages. There is literally no practical limit
to the mathematical return you can make on investment.
Some entrepreneurs and innovative real estate investors have gone
from zero to financial security in under 5 years starting with
little or nothing - something you can't do with paper assets.
With real estate and business ownership you are limited only by
your dedication, abilities, and creativity. It is a higher reward,
higher risk path that can be good if you have entrepreneurial
dreams and skills.
One of my favorite ways to manage the risk (something you will
learn more about in future lessons on risk management) is to work
the two paths simultaneously and hedge your bets.
For example, one of my coaching clients has a passion for real
estate and his spouse has a high earning career she loves. He is
building the real estate portfolio for wealth while she supports
current lifestyle with her earned income. They keep their their
expenses below her earnings and max out retirement plans with paper
assets each year.
With this plan they are working two simultaneous paths to wealth -
one through traditional savings and paper assets, and the other
through real estate. Because of other risk management tools we've
implemented their risk of failure is so small their ultimate goal
is a question of "when"... not "if".
Another client is building his wealth through growing two separate
businesses. He also purchased the real estate that his
companies rent and contributes massive amounts annually to
his wife's and his retirement savings. Each component - his
business, real estate, and paper assets - are individually
sufficient to provide financial security. It is really just a
matter of which one will get there first - not whether he will
reach the goal at all.
Notice how these paths are not mutually exclusive but can be
creatively combined to increase synergy and reduce risk.
You homework is to build these concepts into your wealth plan. Do
you fit one of the two profiles where you can use paper assets
exclusively? If not, how are you going to implement business
ownership with real estate while applying risk management?
Map out your wealth plan. Commit it to writing.
Again, don't worry about perfecting it. Just get something down on
paper and we will continue to improve on it in future lessons. The
main thing is to just get started somewhere.
In the next lesson I will begin to bridge these teachings from
theoretical wealth plan design to practical implementation. We are
close to converting your plan into action so that you produce
concrete results...
Tell your friends about the cool stuff you are learning in these
lessons, and I'll see you in a few days...
Todd R. Tresidder - Founder
FinancialMentor.com
CreateCorp Business Solutions, Inc.
DBA FinancialMentor.Com
14085 Raider Run Road
Reno, NV 89511, USA
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