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
------------------------------------------------------------
This article focuses on generating cash as a full time... Read More
For most of us, the idea of retiring simply on... Read More
Compounding: The Ninth Wonder of the WorldBy Nicola Cairncross Compounding... Read More
In today's unpredictable global economy, you obviously never know what... Read More
We all go to school for about twelve years, kindergarten... Read More
This 4,000 acre sale (now a marina and resort town... Read More
At any time in history, no matter what the current... Read More
You can learn the secrets of world monetary flow if... Read More
When I look around at all of my friends, and... Read More
Building wealth is as simple as saving a little bit... Read More
I'm constantly reading articles on the internet and in financial... Read More
Everyone wants to be wealthy, but most of us do... Read More
Wealth Secret 1 - Decide Your Outcome Right Now.Unless you... Read More
Bottom line. No exaggeration. No hype. If you want to... Read More
The word 'diversity' is a unique one. It can represent... Read More
When young men ask me how to succeed, I tell... Read More
SCENE 1: Pharaoh has just woken up from a very... Read More
Although there are advantages to selling other people`s products and... Read More
It is with great pleasure of having you here at... Read More
Is the ghost of "Money Past" haunting you? Do you... Read More
There are plenty of people who are in love with... Read More
In his best selling book, "Rich Dad, Poor Dad, Robert... Read More
As you sit in traffic, inching along between irate drivers,... Read More
Financial freedom is the power to do what you will... Read More
Do you ever get this in your email box: Find... Read More
limo O'Hare Bonfield ..In today's unpredictable global economy, you obviously never know what... Read More
You can't build a house from the roof down, and... Read More
OK, this article will start with the cheapest piece of... Read More
I have a good friend who works in an area... Read More
This is a true story about a homeless man from... Read More
I recently came across startling figures about the average American's... Read More
How many people search Google, Yahoo and MSN each day... Read More
Living on credit is fashionable. Indulging oneself is fashionable. Saving... Read More
Let's quickly review the principles discussed in the first part... Read More
Most people work hard all their lives only to "retire"... Read More
Vacation season is upon us and it can be tempting... Read More
This retirement account is so new and unique that you... Read More
In my last article on Creating Residual Income I mentioned... Read More
Recently I was reading a book called The Millionaire Mind.... Read More
In theory the idea of generating additional (and passive) business... Read More
Many people don't realize how much money they spend on... Read More
Parents must give serious thought to protecting their family through... Read More
Let me ask you a very simple question. Do you... Read More
As a woman Netpreneur, I sat down via e-mail with... Read More
AS THE MARKET FLIES HIGHER, GOOD BUYS ARE BECOMING HARDER... Read More
It's the beginning of a brand new year: a time... Read More
Bottom line. No exaggeration. No hype. If you want to... Read More
The cashflow board games, Cashflow 101, Cashflow 202, and Cashflow... Read More
So you want to become wealthy? While there is no... Read More
It's no secret that the market goes UP...the market, goes... Read More
Wealth Building |