It’s not your fault…
Seriously, it is not your fault that you were NOT taught how to be rich.
There is a reason why the majority of the people in the world are poor. It is because they are not taught how to be rich.
They don’t know the principles that the rich already know and implement in their lives. If you knew the principles of the rich, you could change your life and be rich as well.
Over the years of investing, learning how to be rich, and understanding what other rich people do, I found the path how to be rich.
There are 8 simple steps how to become rich and wealthy and never need a job again.
Now, they are NOT easy. In fact, if it were easy, everyone would be doing it. How to be rich takes dicispline, hard work, dedication, and time. This is not a get rich quick scheme.
This is a get rich plan.
How to Become Rich is All About Financial Independence and Retire Early
I wanted to learn how to become rich so I learned as much as I could about being rich. Then, I found real estate investing and became both rich and wealthy.
A big thing is knowing the difference between being r. I wanted both, to be rich and wealthy.
There is a lot of talk right not about people being “Financially Independent” and “Retiring Early”.
The acronym for this is FIRE.
But if you want to know how to become rich, you need change the way you think. I learned how to become rich and now I live the life of my dreams.
To learn how to become rich, you need to start thinking like the rich.
Well, first you need to know how the rich think, right?…
Watch the video on how to be rich here:
This is what we are going to be looking at today. How to think like the rich and how to become rich? You see, the rich do not have a different set of rules than the rest of us. They just know how to have those rules play in their favor.
In America, we all have the same laws that govern everyone.
Here is an example of what the rich know that most do not:
Did you know that you can differ taxes over and over again to avoid paying them until MANY years in the future?
The tax code allows for an investor to differ their taxes with a 1031 exchange. Usually when you sell an investment property, you are taxed on the profit you make on the property.
So, if the sale of the property puts $20,000 in your pocket, then that $20,000 is taxable income.
The IRS will tax you on this.
Using the Tax System To Your Advantage How to Become Rich
Now, the rich know how to become rich so they use a 1031 exchange that will allow them to differ (not evade) taxes until a later date.
To do this, they take the $20,000 and use it to buy another property that makes them even more money without being taxed on the $20,000.
They can do this over, and over, and over again. It is only when the rich person sales the final property and takes the proceeds from the sale. Then, they are taxed on that property only, not all previous property profits.
So, there are many laws that we (poor) people have no clue about and are never taught that in government schools.
How to Become Rich – Government Education Has Failed
You and I have both been lied to.
We have been conditioned to think that the only way we can make money is to have a job.
All our lives, we are taught the only way to make money is to follow these steps:
1. Go to school
2. Go to college
3. Get a job
4. Buy a house
5. Invest money in the stock market
6. Retire when you are 68 years old (if you can)
Now, to be fair, this plan provides a person a fine life for the majority of the people out there.
The problem is that I don’t just want a normal life.
I want a fantastic life.
Think about these questions:
1. Why follow these rules? Why not retire at 58, 48, 38, or even 28?
2. Why can’t it be YOU that owns the business and has other people make money for you?
3. Why can’t you be an investor who makes money with money?
4. Why can’t you be the author that makes money passively doing what you love?
How to Become Rich | Rich vs. Poor Mindset
The Poor Think Like The Poor:
- Buy liabilities that take money out of your pocket
- Take out a car loan for a car they cannot afford to buy with cash
- Use credit cards to purchase things they do not have money for
- Buy the newest items like iPhones, tablets, etc.
- They do not invest their money rather they spend their money
The Rich Already Know How to Become Rich:
- Buy assets that puts money into your pocket
- Can pay cash for a new car
- Spend less than they make in a month
- Wait until those new items are discounted or lower priced
- They invest their money instead of spending it
A New Way of Thinking About Money
To be honest with you, there is absolutely NO reason why you can’t do the things the rich do. It is time that we un-condition ourselves in the belief that the only life we can have is an average life.
I say, average is good for some, but not for me. I want amazing!
This is why I worked hard for 9 years to build my real estate rental property business enough so I could quit my job.
At age 37, I worked the last “job” I will ever have. Gone are the 9-5 daily grinds. Replaced by spending time with the wife and kids, lots of 6 week vacations, and doing WHATEVER I WANT! 🙂
6 Ways Real Estate Makes You Money
A rental property that you purchase today will make you money in 6 different ways:
- Cash Flow – Money going into your pocket
- Equity Capture – Money made when you buy the property
- Equity Buildup – Money made as your tenants pay down the mortgage
- Market Appreciation – Money made over time
- Forced Appreciation – Money made when you fix up the property
- Tax Advantages – Money saved when you have a rental property business
The Steps Wealthy People Use How to Become Rich
There is a reason why the majority of the people in the world are poor. It is because they are not taught to be rich. They don’t know the principles that the rich already know and implement in their lives.
If you knew the principles of the rich, you could change your life and be rich as well.
I want you to be rich. Scratch that. Not just rich, but wealthy. The principles of the rich apply to everyone, today, tomorrow, and far into the future.
No matter if you read this 20 years from now or 200 years from now, these principles will still help you become wealthy and rich.
How to Be Rich Step 1: Pay Yourself First
The first principle of the rich is probably the simplest to do, but the hardest to implement. To start growing your wealth, you must pay yourself first.
This sounds a little counter intuitive because when you get your paycheck from your job, you actually receive your money from your employer and it’s yours. In reality, your paycheck has already been spent.
How to Be Rich Step 2: Increase Your Income
The second principle of the rich is to find ways to increase your income. When we were young, we went to school to learn different subjects.
When we are older, we choose which subjects we want to learn.
The poor do not continue to educate themselves but rather work a job and stay the same place their entire life.
Self-education and continuing education are the key to success in life and wealth for your future.
As you educate yourself more, become wiser and more skillful, you will be able to reach higher heights and go beyond your natural limit.
When you do start to increase your abilities, you should put them to good work.
You do this by applying your skills in a way that helps you to earn more money so that you can invest in your future.
This is how the rich think. They buy investments that help them to buy other the items that they desire.
How to Be Rich Step 3: Control Your Expenses
The third principle of the rich is to control your expenses. This principle teaches us to live below our means and not over spend.
The key to this goes with the first principle.
Make sure you don’t spend more than 90% of your earnings because the last 10% is to pay yourself first.
As in the previous example of $1,000 per paycheck, if your expenses are $1,000 per pay period, you are not making any money but are just living paycheck to paycheck which most Americans do.
Your goal should be to cut out expenses so you have more money to save for future investments.
Listen to the How to Be Rich Podcast Episode:
|Current Monthly Expenses||Possible Monthly Expenses|
|Rent Large House – $1,600||Rent Medium House – $1,100|
|Rent Large House – $1,600||Rent Medium House – $1,100|
|Verizon Cell Phone – $75||Go Phone $40|
|Cable Television – $100||Free Over the Air TV + Hulu and Netflix – $16|
|Car Payment – $300 – $15,000 Value||Sell the car for $15,000 and buy a $3,000 beater – $0|
|Eating Out – $600||Make meals at home – $200|
|Entertainment – $250||Red box movie rentals – $15|
|Gym Membership – $50||Work out at home – $0|
|Total Monthly Expense – $2,975||Total Monthly Expense – $1,371|
|Savings of $1,604 Monthly!|
Take time today to list out monthly expenses and get very detailed.
Once you have a list of all the items you spend your money on, go through the list and figure what you can actually cut from your life to save more money for investment.
I suggest cutting out as many expenses you can, almost to where it may actually start to hurt.
How to Be Rich Step 4: Buy the Home You Live In
This principle is about buying your home and not renting it. When you are a renter, you are giving your money away to someone else.
The home you are renting right now may cost you $1,200 a month in rent.
The landlord of the property is not in business to lose money so he is probably making money each month from the rent you pay.
If his expenses are $900 a month, and your rent is $1,200, you are giving him $300 dollars of your income for the “privilege” of living in his home.
That is another $300 that could be in your pocket every month, or $3,600 per year!
Find a home you can afford, while keeping the 10% to pay yourself first, purchase it and cut your expenses that you would normally have in renting a property.
How to Be Rich Step 5: Make Passive Income
Passive income is the most important thing you must learn if you want to know ho to be rich. Passive income is all about working one time and getting paid over and over again.
Learning how to be rich is to learn how to NOT make money. The rich do NOT work for money. They buy assets that make them money even though they don’t work.
I personally invest in real estate rental properties. With over 30 properties, the passive income keeps coming in even though I don’t work.
When you buy one rental property, you should be making $250 or more each month in passive income. That is $3,000 a year in passive income!
They, if you buy 10 properties making you $250 a month, you will make $2,500 a month in passive income. That’s $30,000 a year in passive income!
Insurance protects yourself from damages to the property the tenant causes and even liability issues from the tenant.
How to Be Rich Step 6: Make Your Money Work for You
The sixth principle of the rich is to make your money work for you.
After you have started saving 10% of your income and cut out your expenses until it hurts, then you are ready to look at what to do with your money.
Now is the time to buy rental properties with your money. Those rental properties will make you money every day you own them.
How to Buy A Car AND A Rental Property With the Same Money
The first time someone told me I could afford anything by changing the way you think, I thought they were pulling my leg.
But then I tried it. And you know what? It works.
When you change the way you think, opportunities and solutions present themselves to you.
Let me give you a personal example. I wanted to purchase a new Dodge Ram Truck to replace my old Nissan Titan. Also, I didn’t want to pay any more money than what I could sell the truck for.
So, my requirements were:
- Purchase a new Dodge Ram Truck
- Pay no more than what I could sell my Nissan Titan
- Try to make money in the process
I know, right!? How can I make money buying a new truck?
Now, here is where we change the way we are thinking to get what we want.
I paid $11,800 for the Titan 4 years prior and sold it for $10,200. With the $10,200, I was able to purchase an inexpensive home in Ohio for $10,000. Yep, that’s correct. $10,000. (You can see the Pro’s and Con’s of buying cheap homes on my blog here.)
With this one rental home, I make $550 a month in rent.
Instead of paying cash for the truck like I usually do, getting an auto loan for the new truck allows me to pay for it in monthly payments.
The auto loan for a $30,000 truck is $500 a month. The one rental property is able to cover the bank payments every month!
The best part is after the truck is paid off in 5 years, I still own the truck AND the rental property that makes $550 a month!
Do you see how by just changing the way you think, you can afford anything you want? Think of it like a problem you need to solve.
Whatever you want to buy, do, have, all you need to do is change the way you think. If you want to be free and independent from a job, change the way you think.
How to Be Rich Step 7: Guard Yourself from Losing Money
The seventh principle of the rich is to not lose money.
After you have worked hard to save 10%, cut your expenses until it hurts, and then look for an opportunity for your money work for you.
When you invest your money in rental properties, you have placed it in a safe investment for the future.
I prefer to invest in a business I can control and the real estate rental properties that my company owns are completely under my control.
The main reasons why I invest in rental properties have the lowest risk and highest return of all other investments.
Here is an example of the types of returns you can see with a single-family rental property.
|Single Family Property|
|Purchase Price: $100,000|
|Down Payment: $20,000|
Closing Costs: $2,500
Carrying Costs until rented: $800
Rehab costs: $12,000
Mortgage Payments: $4,800
First year maintenance: $600
|Monthly Rent Amount: $900|
|First Year Expenses: $ 49,700||Total First Year Rent: $10,800|
|Cash on Cash Return: $10,800 / $49,700 = 22%||Yearly Return for year one: 22%|
It would be very unlikely to get a rate of return of 22% in a mutual fund but 22% is actually a low number for rental properties.
Imagine if you put no money down, which is possible, to buy a rental property and have the same monthly rent.
Your rate of return could not be calculated because it would be infinite since you had no money out of your pocket.
How to Be Rich Step 8: It Is Better to Give Than Receive
This last principle of the rich is that it is better to give than receive. I have always been taught that is better to give than receive, and I have found that be true.
This lesson seems counter intuitive but the more money I give, the more money I receive.
The money that we are given from God belongs to Him. We are just stewards of His money and His possessions.
We are just blessed to be stewards of it. He allows us to keep 90% of his money that we receive and give back to him only 10%.
I have found that the more I give, the more I receive in return from God.
These principles the rich live by will change your life if you implement them into your daily living.
I encourage you to implement these into your financial mindset. Move yourself from thinking as the poor do and start to think as the rich do.
I have implemented them in my life which has helped me to get to where I am today.
These principles are not rocket science, they are however hard to follow though.
This is because of the many years of living life without the knowledge and experience, and not applying these principles to assist us in our life.
If you start today and apply these to your life, you will see many changes in you that will help you in your future.
Learn How to Become Rich to Start Living The Dream Life
When is the best time to plant a tree?
The best time would have been 20 years ago.
Then you would be enjoying the benefits of the tree. The fruit it produces, the shade it gives, the less attention you need to give it, and the less resources from you it requires.
When is the second best time to plant a tree?
The second best time to plant a tree is TODAY!
Starting a passive income business is just like planting a tree. If you would have started it 20 years ago, you would be financially independent AND never work a job again.
Likewise, the second best time to start a passive income business is today.
After just 6 years investing in rental properties, I had enough money coming in every month that I replaced the income from my job with it. I really didn’t need to work any longer.
Now, years later, I don’t have to work at all on my real estate business. Just like a tree planted 20 years prior, it produces for me, takes none my time, and none of my resources. I live in my business and do not work at all.
Now, I have more time to spend with my amazing wife and kids. I also travel the world and best of all, do only what I want to do.
That’s one of the many reasons why I love the fact that I started my own business. You may have your own reasons for starting a business, so really think about what those reasons are. Reflect on that, and use that as motivation as you move forward.
I quit my job with passive income. You can too!
Give it a try – you might be surprised!
Change Your Mindset, Change Your Life and Become Rich
If you want be rich, you need to learn how to become rich. More importantly, you need to start THINKING like the rich. Implement all these things into your life and you will learn how to become rich.
- How to Find a Profitable Income Property Investing In Real Estate
- Invest Now Before the Real Estate Market Crash
- How to Get Business Credit with BAD Personal Credit
- Pay Yourself First If You Want To Be Rich
- How to Prepare for the Housing Market Crash Coming Soon
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