The article "Are You Wealthy Yet?" is about entrepreneurialism, it has been released by A Walker.
Here's a real simple way to bceome wealthy.Marty and his wife live at home with their 2 kids. They own
a 3 bedroom house in a middle class neighborhood and try to live
within their menas. Marty works full time in the Printing
Industry, while his wife is in charge of the home and looking
after the kids.They've accumulated credit card debt and have 2 years left
on a automobile loan. They try to stay out of debt as much as possible
and together they've managed to cotnribute a total of $32,000 to
their own Retirement Fund. It is kept in term deposits receiving
5% interest annually.Two years prior, the couple bought an older hosue that they
fixed-up and rent out for $850 a month.
After paying the
mortgage and taxes $300 is left over each month.
This goes into
their savings account each month.At Christmas, the family bought themselves a new comptuer and
decided to start a home-based business.
Things started out
fairly slowly but after 8 months they were receiving a steady
check of $400 a month which also goes into their savings
account. This part-time business will continue to grow with the
effort they dedicate to it.This business also offers them really lucrative tax savings.
By taking advantage of these Tax Strategies they are able to
save an additional $300 a month on tax that was normally
deducted from Marty's paycheck at work.
This monthly income is
also added to the couple's savings.Marty has just bgeun writing an E-book about his "production
expertise" at work.
His plan is to market that book on the
World Wide Web for profitEvery Sunday the couple takes a drive to stay familiar with the
Real Estate market in thier area.
They're searching for another
property, a "handyman's special" to fix-up and rent out. They
have saved enough for a down payment and their credit with the
bank is well established.The family's toatl monthly expenses are $2000. Now, here's the
question:Does Marty's family have Wealth yet? To answer that question properly you first have to understand
exactly what "wealth" means.You achieve wealth when: *Your
Passive Income is the same or greater than your Expenses.* So
what does that mean?First, what is Passive Income? Passive Income is money that you are paid over and over again
for work that you only do once.
(This excludes using a gun or
finding cash on the street) Some examples of that would be
royalties for writing a book or a song, commissions that you
receive for sales that others make and interest from bank
savings or dividends on stocks/options that you own.Second, what Expenses are we talking about? This one's a little
easier to understand.
Expenses are the total amount it taeks to
run your household and your life. This includes, rent, mortgage
payments, automobile insurance, food, credit card and loan payments,
etc………Let's look at Marty's family a little closer…………. Does Marty
have any Passive Income? Yes he does. Marty's salary is not
considered Passive Income. That's because he has to work 40
hours a week just to get the basic amonut.
If Marty doesn't go
to work then he doesn't get paid.
His overtime also doesn't
count as Passive Income.The interest from their Retirement Fund does tohugh. It's paid
to him month after month as long as it's left in that account.
So, $32,000 at 5% is $1600 a year. Divided by 12 mnoths equals
$133 a month in interest.
Ok…..What else? After the mortgage and expenses are paid with the rent money
they receive on their rental real estate they are left with $300
every month. This is Passive Income. Just as long as the tenant
stays and pays his monthly rent.How bout that $400 from the home-based busienss and the Tax
savings. Is that Passive Income? Well, Marty's wife made sure
that she chose a copmany where she could sign new business
accounts and get paid commissions on those accounts over and
over again. They've made a 5 year commitment to bulid this
business part-time. So yes, both the $400 and the $300 in Tax
Savings would apply as Passive Income. Let's add up Marty's
total Passive Income.Interest $166.00 Rental Income $300.00 Home Based
Business$400.00 Tax Savings $300.00 Ttoal $1166.00Not including Marty's salary from work, his family's Passive
Income is $1166.00. Not bad.
Every month that amount flows into
the family's bank account, regardless of anything else they do.We said that Marty's monthly expenses total $2000.00 a month.
And we also said………… You have Wealth when: *Your Passive Income
is the same or greater than your Expenses.*$2000 Expenses subtract $1166 Passive Income = $834 monthly
balance needed to have Wealth.Marty's Expenses are still more than their Passive Income so
they're not wealthy just yet. But they're well over half-way
there. With that kind of knowledge a family can know exactly
where to focus their financial attention.Maybe when Marty writes that ebook he could get slaes and
royalties from it. Also the new Real Estate and more work on
their Home-based business would ceratinly help them to attain
more Passive Income.
Once Marty's Passive Income is more than
the family's Expenses then Marty colud start to have much more
freedom.
He may even choose to quit his job and continue
developing his Passive Income streams.Take a look at your own finances.
What are your monthly
expenses?
Do you have more Passive Income than your Expenses? If
you do Congratulations. You're Wealthy! !!
If you don't. It's
time to get started and start adding Passive Income from other
areas as soon as possible.When you truly understand that principle, you'll be well on your
way to becoming wealthyAl Walker, makes it not hard to launch a successful online
business and rapidly build your wealth to a six-figure
income. Learn the 5 essential keys to olnine success.
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