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Our Philosophy About Wealth Creation

Most of us have limited resources.  Even those that have millions of dollars in assets have limited resources.  In other words, a person can spend or lose everything they have, even if it seems like they have a lot.  Because we have limited resources we have to have our money do all it can do.  We call this Velocity of Money.  The more uses a person has of their money, the greater the velocity.  Not surprisingly, financial institutions try to get people to participate in “single-use” products or accounts, such as 529 Plans, 401(k)’s, IRA’s, and so on.  These accounts are designed for a single purpose, and cannot be used for any other purpose without being penalized.  

We encourage our clients to retain control of their money and get as many uses of their money as possible throughout their lifetimes.  Highly successful people do everything they can to stay in control of their money.  They aren’t looking for the easy path to wealth, because they know the easy path doesn’t lead there.  Wall Street is selling a lie to people.  The lie is that creating financial independence simply requires you to “save” a portion of your income into mutual funds (in all their varieties) and “compound” your way there with “professional money management”.  And what are they saying you need to know?  Nothing.  You don’t need to know anything.  Give up control, give up expertise, and constantly invest, no matter what the price of the investment is (that’s what “dollar-cost averaging” is).  That’s the formula they are trying to sell to the masses as the path to financial success.  Really?  How is that possibly going to work out?  It won’t, and it doesn’t.  The opposite does.  Wealth creation starts by saving money in liquid, accessible, guaranteed accounts.  From there, the money should be invested in things that the client is an expert or is willing to become one.  In other words, we believe work and effort is required in order to create long-term wealth.  The money should be invested in real assets, ones that create cash flow back to the client.  Then, the cash flow is added to the client’s savings.  It’s the savings that compounds in this process!  As the savings compounds, so does the client’s ability to invest in more opportunities.  As cash flow from assets increases, financial freedom becomes more and more of a reality.  

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Principle #1Save 15% or More of Your Income

It all begins here.  If you don’t save, or if you don’t save enough, you will never create wealth.  Saving systematically and automatically is the first habit that leads to wealth creation.  

Principle #2Maximum Protection

What kind of protection would you want if you knew you were going to get sued, knew you were going to have major health issues, knew you were going to become disabled, or knew you were going to die tomorrow?  That’s the kind of protection you should have now, because what you have at the time of the event is all you’re going to have.  You can’t change it at that point.  We help our clients know what their maximum levels of protection are, encourage and help them find a way to obtain it.  

Principle #3 – Full Asset Replacement Upon Death 

Why are retirees so afraid to use their assets in retirement?  Because they don’t have a guaranteed way to replace any of the assets they might use and they don’t know how long they are going to live or what sorts of expenses might come their way.  If retirees had a system in place to replace any and all assets they might consume, the fear of running out would dissipate.  

Principle #4Six Months to One Year of Income Storage

Liquidity is essential to avoiding debt, and it is essential to taking advantage of the best investment opportunities in the world.  Cash truly is king when it comes to the game of wealth creation.  

Principle #5Velocity of Money

Don’t do what financial institutions want you to do.  Do what they do.  Get as many uses of your money throughout your lifetime as possible.  Retain control of your money throughout your lifetime.  Invest in assets that produce cash flow back to you.  Don’t give up control and expertise for decades, just hoping things will work out well for you.  Take the steering wheel, use the gas pedal and the brake, and control your financial destiny versus giving all of the control to someone else.  We teach our clients how to take greater control of their financial present and future.