Let's begin this lesson with a definition of the term "Virtual Millionaire". This is an expression, known to the CPAs, but unknown to the general public. Why? It's because the bank does not want you to know. Here is why...
Virtual Millionaire - An individual that has zero debt and a passive or near passive income of at least 60,000 a year.
For example, if you had $2,000,000 in the bank earning 6% interest, you would have $120,000 of yearly income. This income is known as "PASSIVE" income. It is called passive because you weren't active I the production of this income. In other words, you did not work to get it. Yes, you worked to save the $2,000,000, but the income from the $2,000,000 keeps coming in without work.
A person with $2,000,000 in the bank could spend 6 months traveling the world and they would still make $120,000 each and every year and still have their $2,000,000 in the bank.
Before developing this further, there is one other critical point to make. Most folks have ZERO concepts of millionaire and their lifestyles. If you were a retired multimillionaires with $2,000,000 in the bank and this money was your entire life savings, would you spend your $120,000 yearly income and ALSO spend part of the $2,000,000?
If you are like most folks, you might have the conception that millionaires that spend money hand over first as if there no limit to how much they could spend!
The person with the $2,000,000 in the bank knows that if they spend more than their $120,000 income, next year they won't have $2,000,000 to produce an income for future years. It will be less. Guess what? If they don't have $2,000,000 to produce income, then they will no longer have the $120,000 in income, unless the interest rate goes up.
For some time, I tried to get my mind around this while concept of wealth as it relate to quality of life. I have determined, without question, that it isn't having an immerse amount of money to throw away that provides a high quality of life. It is known that you would always have a very good income and that you could virtually anything you would ever want to do with your time and your life that produces the very highest quality of life (This doesn't take into account spiritual or health issues.)
My friends, that is true wealth, or as a mentioned in the introduction, this is "Financial Wellness". In my previous experience with my wealthy clients, I didn't appreciate the fact that multimillionaires, for the most part, don't spend all that much money in a year. Their FREEDOM come and go almost at will has a near- magical impact on quality of life. That's really living "Well".
Based on my observations and experiences of working with the wealthy, I made a decision to focus my business in a different direction. I decide that I would pursue the creation of passive. "INCOME", not the Creation of wealth or "Assets".
You see … if you can produce $60,000 in a year in dependable passive income, this would be the equivalent of having $1,000,000 in the bank at 6%.
I determined that it would be much easier to create the lifestyle of a millionaire by focusing on creating income. So, I have done my best to become an expert in this very different way of thinking about the financial independence.
There are four ways to achieve financial independence. There is the traditional way, which is to work and save in a attempt to accumulate assets that will one day take care of your income needs. Some inherit it from someone else. A handful will win the lottery. And, finally the Virtual millionaire or "income" approach.
I want to suggest to you that the Virtual millionaire approach is not only far easier, but much more enjoyable in the process.
Consider this for a moment. If you are going to stay in the traditional way of thinking about financial independence, recognize that as folks work and save, they far too frequently deprive themselves of enjoying their life NOW.
I have seen folks so obsessed with saving money for some future unknown use that they become slaves to the future and have virtually no life, here and now. However the vast majority of people can't save. They go deeply in debt and the high cost of interest makes it almost impossible for them to dig out of debt in order to finally begin a savings and investment program.
I want to suggest that for many of you it is far better to hire yourself and invest in your own company instead of buying stock in someone else's company. Instead of trying save and invest to grow assets that you can some day live off, build your own business to produce an income that you can live off NOW and later.
My contention is that it is far easier to become a virtual millionaire than it is to achieve financial independence the traditional way. When you make a serious effort, you can achieve the extremely fast. By fast I mean a few years.
The virtual millionaire advantages are many. At the end of one year you won't need any encouragement to continue. You will be so excited that you will be unstoppable.
In summary, I want to encourage you to concentrate on becoming a virtual millionaire. It is far easier to produce the income of a millionaire than it is to create the assets of a millionaire. Remember… millionaires DON'T spend their assets, they spend their income. It is the income that provides that quality of life.
I want you to think what your life would be like if you were totally debt free and you have at least $60,000 a year coming in year after year. You would be amazed at how much more joy you would have in your life.
The exciting thing is that there is nothing to stop you from working as hard as you choose to continually grow your income. With my approach, you still get to enjoy your life NOW while also preparing for early retirement.
Just for the record, if you develop your own business to the point that it is providing with a dependable $60,000 annual income then YOU ARE ALSO AN "ASSET MILLIONAIRE".
The reason that is true is that, in the world of accounting, you don't just place values on things; you also place value on "stream of dollars".
This is exactly what annuities are all about. Every day millions of dollars are given to annuity companies in exchange for an income for life. These people purposely save their savings for an income the they can't outlive.
The virtual millionaire approach places all the emphasis on creating a "Business Annuity" Let your business produce the income stream you will need for debt elimination and for early retirement. When you do you will join the ranks of those who have achieved true financial wellness.
That's it for today. I hope you've learnt the basic concept of financial planning.
I will be in touch if you enroll to my monthly newsletter.
Resource Box:
------------------------------------------------------------
Want to stay healthy and live wealthy?
YES, it can be done!
Grab THOUSANDS worth of health products &
start a health related business today, both online and off!
http://www.pushbuttonhealthguide.com ------------------------------------------------------------
Alone: Looking for Love Are you afraid you will be alone the rest of your life? Some people are and when that happens, they often develop dating distortions. Read on to discover how ...
Help Your Marriage Survive The Rough Spots Every marriage has its ups and downs. Here are some tips to help get through those difficult times and come out with a stronger, healthier marriage.
Boy Scouts of America and Leadership Coaching The Center for Management and Organization Effectiveness talks with Dennis St. Jean, Assistant Director Professional Development Division, Boy Scouts of America...
9 Ways to Keep Clients Coming Back For More A lot of effort is put into getting new clients. But we also need to get more business from existing clients. Here are 9 ways to keep your clients coming back.
Three Amigos Direct Answers - Column for the week of February 23, 2004 I feel rather foolish writing this letter, but I need help. I am a 67-year-old man living on social s...
Professional Organizations: Join or Fold? All of us join professional organizations for a reason--a friend belongs, we need to for credibility, etc. Many times we let years slide by and we don't stop a...
The Holiday Army Grieving is so much more difficult during the extended holiday season. Here are some suggestions for making that time a little easier.
Saving Private Ryan in Iraq - Stop the Bleeding I propose that we give soldiers an ultra thin material, which will either be an undergarment to their uniform or incorporated as a liner within that uniform. T...
Creative Marketing for Home Businesses Okay, so you're working from home and you need a way to effectively market your products or business. Likely, you don't have much money to really put into an a...
Texas Exotic Hunting Texas Exotic Hunting is a popular sport in this state. Hog hunting in Texas and dove hunting in Texas are both considered exotic.
Biweekly Mortgage This is a simple explanation of the Biweekly Mortgage that allows homeowners to pay off their mortgage more quickly saving thousands. As much as $50,000 to $60,...
Interesting… (but unnecessary) A brief exploration of our relationship to the present moment, and how our conditioned or habitual resistance to 'what is' causes suffering.
World of Website Promotion Website promotion is a big and ongoing process. Every person who has website should have little knowledge about various elements involved in website promotion e...
Dry Skin Prevention Tips If you suffer from dry skin your probably always looking for different ways to help improve your condition.
A New Paradigm Shift In Earthly Wealth Its a grass roots movement, quietly sweeping the face of the planet. Simply, our observations can be called a revolution in monetary distribution for all mankin...
The Benefits of Owning Wood Mini Blinds Wood mini blinds are one variety of wood blinds for covering doors and windows. The smaller increments of a narrow slate dimension, wood mini blinds are better ...
Print this page