How to Create and Preserve Wealth that Lasts Generations

Power Ideas to Achieve Your Money Goals

Praveen Kumar, Prashant Kumar

• Publisher: Praveen Kumar
• eBook ISBN: 9780473454111
• Edition: 1
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

Have you ever wondered why some people have all the time in the world to play golf, go on holidays and spend time with their loved ones whilst others struggle with two jobs and have no time or energy to enjoy life? Have you also read stories of lottery winners, rich and famous people who had all the money in the world only to lose it and become bankrupt?

We live in interesting times and this book will show you not only how to create wealth but also preserve it so that you and your loved ones can enjoy life with peace of mind. Most people want to become rich quick. The trick is to create sustainable wealth even if you are not rich. There is a huge difference in becoming rich and being wealthy. Once you understand the difference and embark on the journey of wealth creation life will never be the same again. This book will lead you to the Promised Land.

Steps to Creating Sustainable Wealth

The best part is that you don’t have to be super rich to create sustainable wealth: anyone can do it with some knowledge, self-discipline and perseverance! The process involves conversion of earned income into passive income as efficiently as possible.

It is important to understand the mindset required to succeed in each stage of financial growth. If you wish to graduate to a higher stage of financial success, your mindset has to evolve and change or you are doomed to fail. Eighty percent of new start-up businesses or investments fail primarily because they are started by people who have the mindset of an employee. If you wish to become a millionaire then you have to develop the mindset of a millionaire. To become a billionaire, you need to develop mindset of a billionaire.

Reality Check if you are an Employee

If you are an employee and want to start investing then you will need to accumulate funds to buy assets. In the majority of the cases people find themselves in ‘job trap.’ They barely make enough to make their ends meet with little or nothing left for investing.

There is nothing to despair because almost everyone starts at this point. There are only very few lucky ones who start with a silver spoon in their mouths. If you are not one of the lucky ones, then you must seriously analyze what a job entails and how it holds you back.

As an employee, your cash flow comes from trading hours for money; you are a one-man army. This imposes huge restrictions on your cash flow growth prospect. You can only work X number of hours in a day. It is also highly risky. If something happens to your health or you get fired from your job, your cash flow ceases. What happens to your loved ones who depend on you? This is an extremely unhappy situation.

The worst part of being an employee is that you get taxed before you get paid. There are hardly any tax incentives. These are mainly reserved for those in business, which reduces your limited cash flow even further.

Gone are the days of job security but unfortunately, people still hold on that idea. In this knowledge based, rapidly changing economy, jobs become redundant faster than you learn a skill. For instance, there are no jobs today for COBOL and Pascal programmers that were high in demand merely a few years back. In the current economy, companies make more profit by laying workers off than hiring them.

Advances in automation are shrinking workforce and the middle-class. In the next two decades, robotics and artificial intelligence will further create pressure on jobs and redundancies will be on a rise at a pace never seen in the history of mankind. Taxi, bus and truck drivers are likely to become jobless in the next decade or so as driverless cars hit the road. Industries will opt for part-time workers and consultants as compared to offering full-time employment. Most people will be engaging in several part-time jobs just to make their ends meet.

This is the reality of our times and no amount of government intervention, closing borders or trying to bring back jobs by introducing isolationist economic policies will reverse this trend. It is only through re-educating and adapting that one can survive in this ever-changing and technological, accelerating world.

Job security is the relic of the industrial era; when a person joined a company and remained there for life. The company also looked after you in your retirement. The faster you realize and start making adjustments, better it will be for your financial future.

There is nothing riskier than a job. Relying on a job to fund your cash flow is stupidity in today’s world – don’t be fooled by a few high paying jobs at the top of the corporate ladder. Wages, in real terms for the mid-level jobs, have been declining since peaking in mid-seventies. Only the top one percent of the one percent in the highest pay bracket will have adequate cash flow to invest from their salaries for comfortable retirement. Don’t envy them because they are brilliant and have sacrificed a lot to reach pinnacle of success. Path of an employee to wealth creation is very thorny and a difficult one. There are better and easier ways to become wealthy.

Jobs in most cases provide a false sense of security till the axe falls. The most problematic part is the mindset it produces: it kills the risk-taking ability of an individual. To survive, most people keep their heads down and avoid rocking the boat that may endanger their livelihood. They will suck up to unreasonable demands of their bosses and keep their creative ideas locked within. After a few years, this becomes a habit resulting in a total lack of initiative. Employees will nurture dreams and talk big about breaking free from the stifling environment but in most cases, they lack the courage to start afresh.

Most employee conversations go like this: “Who do you work for?”, “How much do you earn?”, “where do you live”, and “What car do you drive?” … Lest I sound rude, I call this “Looking good, going nowhere.”

Employee time is structured by the needs of the corporation leaving no freedom or initiative to the individual. Most jobs are so draining that it leaves no time or energy for an individual to explore new ideas, explore and analyze new investments and wealth creation opportunities.

The problem for most employees is that they make decisions based on fear of what can go wrong rather on vision; trust and what can go right.

The most important aspect of wealth creation is to get rid of the employee mindset that holds most people back; it is this mentality that keeps a person trapped in a job. They find it difficult to break free. You can be working a job but you have to get rid of the mindset that holds you back. There has to be a fundamental change in your thought process from fear to that of trust.

Every great endeavor in life requires a leap of faith – greatness lies in taking a step into the unknown. It takes courage and self-belief that things will turn out right. It also cannot happen till the time you take an action.

The best way to foster a new mindset is to found a small part-time business in your spare time. It can be something small like network marketing or internet-based business: these require very little capital outlay and have time flexibility. Running a small business will teach you about leadership qualities, communication skills, marketing, accounting and importance of networking.

The most important skill you will learn is sales. No money is ever made in business without a sale. You will learn how to overcome objections and rejection. Most people hate selling because of the fear of rejection. To become truly successful, you have to overcome rejection and gain the self-confidence that these small business ventures will provide.

The best part about running a part-time home business is that it will give you tax breaks that will provide you with extra cash flow to start investing. The biggest companies in the world today like Microsoft, Apple and Amazon were founded in garages.

The only two reasons to be an employee are: accumulation of some capital and acquisition of skills to get to the next level. Of the two, gaining knowledge is more important than accumulating capital. Learn from other people’s mistakes. Get a job under someone who is a great mentor. Work in a field that will give you the experience to launch your own business.

It must be remembered: income does not equal to wealth but it is what you do with your income that determines your wealth. As an employee, you may have limited spare cash but you have to tighten your belt and take first tiny steps to start investing. Don’t buy unnecessary stuff that you don’t need and invest instead. I keep repeating this……a march of thousand miles starts with the first step.

“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

Warren Buffet

The first important financial challenge you should take in your life is to create adequate passive income to cover your monthly expenses so that you can quit your job. It will allow you to feel secure and give time freedom to explore new creative ideas. This will lay the foundation to become truly wealthy and financially secure.

If you are really smart, you will be able to reach this stage by your mid-thirties. In most cases, couples reach this stage sometime in their forties so that one person in the family can quit their job and start their business. Real cash flow begins only once you successfully launch a business—all businesses are not equal. There are various stages to growth in business and each stage requires a different mind shift and skill set.

Self Employed/ Small Business – The Stepping Stone Financial Freedom

Being self-employed or starting a small business is the first step on the entrepreneur ladder. Most people get excited and fired up when starting out on their own. They want to be their own boss.

The emotional trigger of an employee is security. For a small business owner/ self-employed person, the main driving force is to control their own destiny. In most cases, people start out with just one employee: themselves.

In the majority of cases, the impulse to start their own business comes when people are unemployed or between jobs. They get a flash idea that they can do a much better job than their boss. Without much preparation or thought, they start their own business. Their mindset is still that of an employee. They feel they are the experts in their field. This is the first major mistake. They start a business on what they can make rather than starting a business on based on what product they can sell.

This is the starting point of self-employment trap.

They don’t have a vison or know how to grow the business. Their business is centered on their particular skill. A TV technician will start a TV repair shop and will be satisfied if he has enough work to keep him busy. In most cases, small business owners are worse off than those employed because they find it difficult to even go on a holiday. They are still trading time for money but without the perks of an employee. Their attitude towards money is same as an employee. They have to “make money” in their business which is the same thing as “earn money”.

Most people have little or no knowledge about cash flow. They think advertising is a waste of money. They lack the skills to put systems into their business so that it can operate without them. Their entire business is centered on them, and they do not trust or delegate authority.

This is also true for self-employed professionals like lawyers, accountants, and medical practitioners etc. who try and set up their businesses.

Most small business entrepreneurs become frustrated sooner than later and give up at this stage, which is why 80% start-ups fail within two years of their launch.

Being an entrepreneur is like walking through fire, whereas being self-employed or owner of a small business is the most robust stage of financial growth. When starting out, you are a one-man army and don’t have funds to hire best people to advise or support your busine...

Table of contents

• Introduction
• How to Create Sustainable Wealth?
• Steps to Creating Sustainable Wealth
• How to Generate Massive Cash flow to Fund Investments
• Why Create Multiple Streams of Passive Income?
• Preserving Wealth
• Transfer of Wealth
• Other Books by the Author
• About the Authors
• Appendix