Seven Secrets of Self-Made Multimillionaires

First, understand that you no longer want to be just a millionaire. You want to become a multimillionaire.

While you may think a million dollars will give you financial security, it will not. Given the volatility in economies, governments and financial markets around the world, it's no longer safe to assume a million dollars will provide you and your family with true security. In fact, a Fidelity Investments' study of millionaires last year found that 42 percent of them don't feel wealthy and they would need $7.5 million of investable assets to start feeling rich.

This isn't a how-to on the accumulation of wealth from a lifetime of saving and pinching pennies. This is about generating multimillion-dollar wealth and enjoying it during the creation process. To get started, consider these seven secrets of multimillionaires.

No. 1: Decide to Be a Multimillionaire -- You first have to decide you want to be a self-made millionaire. I went from nothing—no money, just ideas and a lot of hard work—to create a net worth that probably cannot be destroyed in my lifetime. The first step was making a decision and setting a target. Every day for years, I wrote down this statement: "I am worth over $100,000,000!"

No. 2: Get Rid of Poverty Thinking -- There's no shortage of money on planet Earth, only a shortage of people who think correctly about it. To become a millionaire from scratch, you must end the poverty thinking. I know because I had to. I was raised by a single mother who did everything possible to put three boys through school and make ends meets. Many of the lessons she taught me encouraged a sense of scarcity and fear: "Eat all your food; there are people starving," "Don't waste anything," "Money doesn't grow on trees." Real wealth and abundance aren't created from such thinking. 

No. 3: Treat it Like a Duty -- Self-made multimillionaires are motivated not just by money, but by a need for the marketplace to validate their contributions. While I have always wanted wealth, I was driven more by my need to contribute consistent with my potential. Multimillionaires don't lower their targets when things get tough. Rather, they raise expectations for themselves because they see the difference they can make with their families, company, community and charities. 

No. 4: Surround Yourself with Multimillionaires -- I have been studying wealthy people since I was 10 years old. I read their stories and see what they went through. These are my mentors and teachers who inspire me. You can't learn how to make money from someone who doesn't have much. Who says, "Money won't make you happy"? People without money. Who says, "All rich people are greedy"? People who aren't rich. Wealthy people don't talk like that. You need to know what people are doing to create wealth and follow their example: What do they read? How do they invest? What drives them? How do they stay motivated and excited? 

No. 5: Work Like a Millionaire -- Rich people treat time differently. They buy it, while poor people sell it. The wealthy know time is more valuable than money itself, so they hire people for things they're not good at or aren't a productive use of their time, such as household chores. But don't kid yourself that those who hit it big don't work hard. Financially successful people are consumed by their hunt for success and work to the point that they feel they are winning and not just working. 

No. 6: Shift Focus from Spending to Investing -- The rich don't spend money; they invest. They know the U.S. tax laws favor investing over spending. You buy a house and can't write it off. The rich, in contrast, buy an apartment building that produces cash flow, appreciates and offers write-offs year after year. You buy cars for comfort and style. The rich buy cars for their company that are deductible because they are used to produce revenue.

No. 7: Create Multiple Flows of Income -- The really rich never depend on one flow of income but instead create a number of revenue streams. My first business had been generating a seven-figure income for years when I started investing cash in multifamily real estate. Once my real estate and my consulting business were churning, I went into a third business developing software to help retailers improve the customer experience.

Lastly, you may be surprised to learn that wealthy people wish you were wealthy, too. It's a mystery to them why others don't get rich. They know they aren't special and that wealth is available to anyone who wants to focus and persist. Rich people want others to be rich for two reasons: first, so you can buy their products and services, and second, because they want to hang out with other rich people. Get rich -- it's American.

http://www.entrepreneur.com/article/222718

24 Easy Ways To Make Money On The Internet

So it turns out that the internet is good for more than just porn and video games – you can make money off it too! Think of the internet as a giant country called Imaginationland. By playing your cards right, you can make some easy money online doing things you’re already doing. Here are some lifehacks to start you off:

1. Website Building

If the internet is a country, then websites are like real estates. I’m hoping by now you have a general understanding that real estates are valuable in the physical world – digital real estates work the same way. By building a website, you’re creating your own plot of online “land.”

You can fill this land with whatever you want, but you have to promote it through social media (and anywhere else you can think of) for this to be successful. When you build traffic to your land, you can sell people whatever you have to offer. In order to build a website, you need a host (i.eGoDaddy), a template (i.e WordPress), and content.

The first two parts are easy to find, and content is only as difficult as you make it. You can post blogs, items for sale, pictures, videos, or whatever you want. Opening up your own website gives you the potential to make money from the avenues I’m going to mention.

2. B2B Marketing

An online business model I love is utilized by GetVoiP, an affiliate marketer based in New York. GetVoiP acts as an agent for business communication providers. They maintain updated listings of VoiP providers, including ratings, comparisons, consumer reviews, in-depth knowledge of market and end-user trends, and expert opinions from business professionals on a variety of topics related to business consumers. By not only keeping abreast of news, but providing detailed analysis of products being offered, GetVoiP is able to generate traffic to their site and increase their clout with businesses.

The more online clout you have as a business, the more money you’ll make. If you’re known for making lasting connections (as is the case with GetVoiP above), then you’ll have no issues building your online brand. You’ll be recognized in your community and begin to build a buzz in your industry. Tracking your numbers (how many people view your site, click each ad, and make a purchase from that click) gives you the leverage to expand this part of your business, enabling you to continue building your online rep.

3. Google Adsense

If that sounds like too much technical information for you, there is an easy button – Google’s advertising platform is as simple as signing up, enabling (on Blogger) or pasting a small code on your website, and allowing the advertisements to automatically roll in. The problem with this program is that you don’t get any commissions – and you don’t get to control the ad content. This is useful for some, but powerful users will want something a little more robust.

4. Amazon Associates

Amazon has an Associates program for site owners and bloggers. They offer a search tool to find the right products and services from their site and a variety of ad styles to display on your site, including text-based and banner images (digital billboards) like this:

Each item purchased through your Amazon links give you a commission. It doesn’t take high volume traffic to achieve results, either. I began making money with the program when I only had 1,000 hits per month on my site. They can apply your earnings to your Amazon account balance, issue you a check, or direct deposit into your bank account. If you love Amazon, you’ll love their associate’s program. 

5. Rakuten Linkshare

Amazon and Google are far from your only options for online advertising. Rakuten Linkshare is a great place to search for other affiliates for your ads. Through their program, you can get customized ad links, email links, and banner ads for Starbucks, Walmart, iTunes, and a slew of other popular brands. With this program, you can also find smaller companies, regional or specialized brands, and more. I run a combination of Google, Amazon, and Rakuten’s programs, and my monthly income is approximately $150 from these programs. It’s not a lot of money, but it’s also not a lot of work for residual (it means recurring…since the ads are permanent…) income.

6. Company Referral Programs

Speaking of the benefits of permanent ads, banners and links aren’t the only ways to earn a little bit of dough off your online endeavors. By having a website, you gain the power of emailing companies to ask them for things. I have no shame in letting the yoga company whose mat I’m looking into purchasing know that I have a blog and write for yoga publications – it sometimes gets me discounts.

Other times, I gain a valuable business contact in PR, advertising, or other aspects of corporate sales. Sometimes I just get a free drink. Either way, money in and of itself is worthless. Ditch the middle man and use the internet to barter what you have and can do for what you need.

7. Klout

If you have a social media account, try out Klout. The company tracks your social media usage, determines how big and what type of audience you draw based on the subject matter of your updates and posts. Using this information, you’re qualified to receive free items, tickets, etc. Check their website often to find ways of earning free stuff by doing what you’re already doing online…boring the rest of us…

8. EBay

If you have anything you want to sell, then EBay is the place you need to seriously consider doing it first. Personally I’m not a fan of the site because of the work it takes to build up a reputation. If you’re willing to grind through that process, you’ll be rewarded with many privileges – people have gotten rich selling books about how they got rich selling everything on EBay: 

9. Amazon

If you start getting too big for EBay or decide you want to try a different flavor, Amazon has a marketplace as well. I prefer using Amazon because I can depend on their shipping, have a Prime account, and trust their reviews (overall, not usually singularly, although occasionally that as well). 

The difference between Amazon and EBay is that EBay (though still filled with new items) is seen as a used marketplace between individual parties, whereas Amazon (which is filled with offers for new and used merchandise from the 3rd parties) is viewed as a Wal-Mart-type superstore. As a consumer, this difference leads me to use Amazon, so it only makes sense to target on my own demographic.

10. Etsy

If you’re crafty (and I mean that in more than one way, wink wink), you’ll enjoy Etsy. Handcrafted items are the bread and butter here. Plenty of people make decent side money on the site, which is basically an EBay for crafters and artists. Set up a sellers account with Etsy, and you’ll be asked to set up your virtual storefront and put up at least 5 goods for sale.

Once you have this down, you’ll be a budding Etsy entrepreneur. Provide great quality to your customers, and they’ll often return. Many people are willing to pay a premium for quality handmade designs. Etsy (like EBay and Amazon) takes a cut off the top for selling items through their site. PayPal takes another cut, and you have to be careful with taxes on all income, so be diligent while building your online business.

11. Craigslist

Craigslist is the modern equivalent of the classified ads that dominated the days of newspapers. These quick ads are easy to navigate and use, and they’re geographically linked. Whether you’re selling something or offering a service, this lifehack is a great place to start learning the intricacies of Craigslist.

Posting ads on Craigslist is technically easy, but people often have fears about posting their personal information on the site. I communicate mostly through email when doing business on Craigslist, and I’ve never run into any issues. I’ve never been ripped off, nor have I been murdered or raped for using the site. It takes common sense, so use your best judgment, but don’t assume someone is a thief just because of their preferred communication method. For an extra bonus, google “funny Craigslist ads” to see some delightful examples of guerilla and grassroots marketing.

12. Indeed

Maybe what you need is a job. It doesn’t matter which job search site you prefer using (even Craigslist) – Indeed tracks them all, and then some. You can find jobs posted on company websites, through temp agencies, and more at Indeed. If money is something you really need, Indeed is most definitely the place you want to visit to browse career opportunities.

13. Elance

Where Indeed excels at finding job postings across the web and acting as a search crawler for employment, maybe a full-fledged career is too big of a commitment at this point in your life. Elance is a site to find freelance work of all types. I’ve used it for quick writing, editing, copywriting, resume building, and other odd jobs and temp gigs. The experience has been great.

Elance offers a wide array of technical, data entry, accounting, and other freelance and temp gigs. If you’re just looking for something short and sweet, log in, input and showcase your marketable skills, and begin searching through their job database, using any parameters you desire. Once you submit a bid, you’ll receive an acceptance or denial – you may get a few rejections, but don’t sweat it. Negotiate the terms of your bid, and get to work. You have money to make.

14. Mturk

If you’ve heard of crowdsourcing (and even if you haven’t), Amazon’s Mechanical Turk program is a great place to get involved. Much like at Elance, you input your info and skills. You then are able to search for different menial tasks ranging from identifying inappropriate web content to transcribing audio recordings to basic data entry work.

Just like at any other job, the more work you do, and the better your quality, the more opportunities you’ll have to make money. The payouts are often small, and your payment is received in Amazon credit, but Mturk is a great place to make mindless money while veg’ing on the couch watching TV.

15. LinkedIn

LinkedIn is a social media site for professionals. This isn’t a direct way to make money, but it’s a great way to connect to your current and potential peers, customers, clients, vendors, and more here. You’ll build a reputation and get in the loop on important developments in your chosen career path and/or industry. One day an old college buddy may hit you up for a dream job you never considered at the exact moment you are looking for a new vocation. Whether you like it or not, keeping your LinkedIn profile current is a great way to get surprised with new work opportunities out the blue.

16. Care.com

If you’re an experienced nanny or babysitter, Care.com is the place you want to make money. By listing yourself on the Craigslist of Childcare, you’ll broaden your reach and increase your odds of finding the right gig at the right time. You can be pickier with what kids you watch when you have the reputation and traffic to pull in more customers. Join Care.com and start making money by investing in the future of our youth.

17. ThePirateBay

I support bootlegging – I don’t see it as being immoral or unethical in any way. I used to bootleg quite a bit in my youth, and I still do on occasion today (although not yet today in particular, I more meant “in the present”). If you want to hustle for your money, do what you must, baby. Download some software, music, movies, or other assorted digital goodness here and start slangin. It’s not an easy life, but sometimes you gotta do what you gotta do.

18. iTunes

If you’re a musician, writer, artist, tech nerd, pundit, or can produce any type of audio, video, or text worth consuming, you may be able to sell some stuff in Apple’s flagship iTunes store. By selling your work here, you’re able to stand next to the marketing clout of big business. You can make a healthy living off the iTunes store, and there’s no better time than now. 

19. Yelp!

If you have a business, you want to get listed on Yelp! You may not use the software, but some people do, and they use it religiously (and I don’t mean they’ll kill you over it). By listing your business on Yelp!, you’re putting yourself on the map. From here, you also need to start using Yelp! Write reviews of places you go. It’ll be worth it in the long run.

Soon, you’ll have a dozen or so reviews under your belt and can hire yourself out as a Yelp! reviewer. There are ethical and moral questions to doing this, but the title of this piece is “ways to make money,” not “ethical ways to make money,” and I am a former Bank of America/Countrywide employee, so what’d you expect?

20. Wikipedia

Another seemingly free site you can make money from is Wikipedia. People who say it’s easy to edit Wikipedia have clearly never tried editing Wikipedia – it’s a pain. Thankfully it’s a pain for companies as well, so many of them are willing to pay editors to assist them in the editing process. You’ll become a bounty hunter in a way, choosing your own lines to cross and keep. If editing is something you like to do, and you’re willing to put in the work it takes to learn Wikipedia’s dispute process, roll up your sleeves and try this one out.

21. Blogging

I make the bulk of my money from blogging. In addition to the advertising revenue streams mentioned above, I also receive flat rate payments for blogging from various blogs throughout the web. I’m paid to write as a whistleblower, financial analyst, reviewer, commentator, and more. Writing for other sites builds traffic to my personal blog. The traffic for this blog gives me clout to present to advertisers.

To create your own blog, you don’t even need a web domain. You can start a completely free blog on either WordPress or Blogger. Each of these sites has its ups and downs, but you can’t beat the price. You generally want to keep blog posts between 150-500 words until you have a few dozen under your belt. Links between your blog posts encourage people to stay on your blog once they find it, increasing traffic. Once your blog is up, promote it on social media for the greatest effect.

22. Kickstarter

If you have a passion project, Kickstarter may be exactly what you need to get it off the ground. Celebs like Zach Braff and Melissa Joan Hart have used this site in attempts to fund their movie projects. Some crack dealers in Canada inspired a “crackstarter” campaign from Gawker for pictures of the Toronto mayor smoking crack with them. All you need is a dream, a goal, a budget, and a great pitch to convince people to come to the site and donate to your Kickstarter campaign. Panhandling isn’t dead – it’s gone digital…

23. Extreme Couponing

If you’ve never heard of extreme couponing, check out this lifehack on the subject. Once you’re versed on the idea, what you have to do is a bit difficult at first, but it’s a great way to both save and make money: go to hip2save.com and get a feel for the types of deals that are out there (both online and in the physical world). Once you’re comfortable with the process, start searching for the best deals in grocery, retail, and online shopping. After a month or two of extreme couponing, you’ll have enough cleaning, hygiene, and food supplies stocked up to save a noticeable amount of money. Now maybe you don’t need to make as much…?

24. Social Media

No matter what you do to make money online, promote it on your social media accounts. You have a base of people who are already interested in you and have a vested interest in your brand – why would you not want to take advantage of that? By promoting yourself and your projects on your social media accounts, you’re greatly increasing the chances of people actually giving you money in exchange for your goods and services. Stop being shy and get out there.

http://www.lifehack.org/articles/money/24-easy-ways-make-money-the-internet.html

Wise Money – 5 Tips From Billionaire Investor Warren Buffett

Want to make investment decisions that lead to wealth in the long term?That’s just what billionaire Warren Buffett has been doing for years. Whether you have $5 or $50 million, Buffett’s wisdom will ring true as you work to make the best choices for your situation.

From the master himself, five tips you can take to the bank:

1. Fear in others is an opportunity for you

It’s been an ideal period for investors: A climate of fear is their best friend. Those who invest only when  commentators are upbeat end up paying a heavy price for meaningless reassurance.

Keep your head about you when others decide with fear and you’ll find value at every turn. From the common market thrashing over quarterly earnings to the small business owner who just wants to get out, learn to smell fear and welcome it as an opportunity.

The irrational fear of the herd is a dear friend to the value-minded investor. When everybody else stampedes, quickly work through your own fear and get back to business.

2. Invest in what you understand

It doesn't matter how good a deal you've found or how cool an investment opportunity seems. If you don’t understand how it works, steer clear. You probably have at least one friend who is always rushing from one “perfect investment opportunity” to the next. Unless you can afford to burn money in a barrel (which you shouldn't), steer clear of investments that you don’t fully understand.

3. Maintain a healthy margin

We pay a steep price to maintain our premier financial strength. The $20 billion-plus of cash equivalent assets that we customarily hold is earning a pittance at present. But we sleep well.

For most individuals, the idea of even $5,000 in the bank seems like a far-fetched dream. Keeping 6 months worth of living expenses in a separate account is good personal finance sense. Holding enough cash to get you through times of uncertainty in your business has the same result of keeping you free of fear-based blunders.

Figure out the number you need to keep safe in order to sleep well at night. Buffett needs his $20 billion, I need enough to pay for my friends’ drinks for a few months. What do you need?

4. Concentrate on long term results

In the end, what counts in investing is what you pay for a business – through the purchase of a small piece of it in the stock market – and what that business earns in the succeeding decade or two.

Once you've put the first 3 tips into practice it’s important to remember that tremendous value is most often gained over the long term. Look at what might happen over the next 15-20 years and invest accordingly.

You've got your cushion so you’re not afraid of dips in the market. You’re working within the bounds of what you understand well. You also have the ability to operate calmly when the rest of the world has gone nuts. Putting some focus on 4 tips should be no big deal for you!

5. Take full responsibility for your investment decisions

If Berkshire ever gets in trouble, it will be my fault. It will not be because of misjudgments made by a Risk Committee or Chief Risk Officer.

Make the success or failure of your investments personal and take responsibility for all your decisions. You might have the smartest consultant of all time but that’s no excuse to shirk your responsibilities. If something goes wrong at Berkshire Hathaway, Warren Buffett takes responsibility for the mishap and works to fix the problem as quickly as possible.

He’s famous for treating the latest recession like a mother of 20 stocking up on groceries for 50% off. You probably won’t be in a position to purchase entire companies any time soon though. In the meantime, Get more of Buffett’s advice by perusing his annual letters to Berkshire Hathaway shareholders (quotes excerpted from 2009 letter).

http://www.lifehack.org/articles/money/wise-money-5-tips-from-billionaire-investor-warren-buffett.html

How To Start a Business With No Money

In the world of entrepreneurship many people can see the potential of it. It’s one of the major growing markets, and with the recent economic crisis it’s a great way to really handle the problem and make money without having to slave at a 9-5 job. However, there is a small problem to that.

 

One of the things is many people don’t think they have the money to do so, so they don’t go and follow their dreams and instead sit around and wish that they did that. Well the problem with that is despite the fact that wishing can be a great thing if you are not really trying to get something, in the world of business it’s frivolous. You have to actually DO something in order to achieve a product. There is a way to start a business with no money, and it doesn't require a whole lot of skills and it’s very easy to do. You will learn how to start a business with no money and how you can grow it to the size you've never even dreamed of before.

 

The first way to start a business with no money is to have an idea. If you don’t have that, you can’t go anywhere. There are many different ideas out there, such as things to help people or even food companies if you’re savvy with cooking. Just look at your own set of skills and go from there. Are you a dress maker? Well starting your own clothing company is a great way to start. You have to have the idea in place before the magic happens. If you run into any issues, you can even look online and check different forums to see what people need and want based on your interests. You can generate an idea from there and produce it, thereby starting you on the way to successful entrepreneurship.

 

The next thing to start off a business with no money is to find people and sell it to them in order to get people to be part of the partnership. This could start off as maybe a group of friends and you have an idea to start a hair company. You want people with the same interests in the area so that you’re not working with cross-purposes in the vicinity of the production.

 

You want to find people who are actually going to be remunerative not just in the form of money, but also in the form of ideas, help, and even organization of the company. You want to go in with people on your side, and ones who will actually be there for you so that you’re able to have a successful business partnership and you’re not just a lone wolf.

 

The next point in starting a business with no money is that actual selling of the idea to people who maybe have more money than you do. There are some investors looking for the next big thing in the world, and they may like what they see with you. Some people are willing to take the financial risk, and those are the ones you should be looking into.

 

When you do go to sell them however, tell them straight up what your product is, what it can do, and how it can help others. Don’t try to appeal to them by using overdone clichés or other jargon that has no place in an atmosphere like that. Instead, appeal to them through your own personal ideas and through that you can shine.

 

As you start to sell to people you will make connections. When starting a business with no money, these connections can be the most crucial things ever. These can be people who may not be able to completely invest in you, but they might have connections to other people. Remember, the world is a very small place, and one little guy you really appeal to may have that connection to the big cheese you’re seeking to win over. It’s all about appealing and winning and showing what the best is, and that’s the game you’re going to have to play when you get into this business.

 

Once you start having connections next is to actually start promoting your company. The first thing to do is start to spread it as a sort of word-of-mouth campaign. If you’re doing it online, use social media. Social media pages are a great and free way to really promote yourself. Put those 1000 friends you have to use and actually get them to like and share some of the things. The more likes and shares that you get, the more people will be interested and will frequent to your page.

 

It’s not just Facebook however, there are other great social media outlets. Tumbler blogs have been a great way to really promote a company and get things moving without having to shell out a ton of money. You can get friends to share a blog or you can even post stuff on blogs so that you can get noticed by others. This also works with Twitter, and another cool thing about Twitter that you can use if the ability to tell people about any sales and specials you may have later on. If you’re looking into the health and beauty aspects as a business, the Pinterest is a great tool.

 

It’s able to let you pin some of your products to various boards, and it’s a great way to generate attention. Just get your word out there, and start to really promote yourself as a business and you will get the attention you need.

 

Another key thing to start looking into as well is SEO optimization. What that means is that you start to really get traffic to your page. This can be used by keywording and backlinking. All of the material on this is found online, and that’s the beauty of it. Even though you’re starting a business with no money, the internet is a helpful and a great tool to have in order to really find out more about various things.

 

You can learn all about it through some of the articles that experts put out on SEO, and you can start to write content and backlink to your page as well. SEO is a great way to really start a business with no money, and it has resulted in very affluent companies that are doing great.

When working with SEO a great way to really get attention is by using keywords in articles. Many people may be looking for the right product or solution to their problems.

 

The beauty of articles, is that you can post them on different sites and then you can backlink to your own web page. This can be a great way to really get traffic, and the more you do this, the more people will really want to know more about it. Even though keywording can sometimes come off as a bit oversaturated, ti’s a great way to really start off a business with no money and really get the traffic and attention you need.

 

Now that you know quite a bit of the basics of how to start a business with no money, go out and start doing it. You can do this if you have the drive and the time and effort to put into it. If you really want it, you will work toward it and make it a reality not only for yourself, but others as well.

 

Starting a business with no money can be a reality if you’re ready to get off of your hands and start working on it, and it can be a whole lot more profitable than you imagine.There are many great things that can come out of it, so start your own business today, and may your life never be the same again.

http://frugalentrepreneur.com/2014/07/how-to-start-a-business-with-no-money/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheFrugalEntrepreneur+%28The+Frugal+Entrepreneur%29

10 tips for financial freedom

Financial freedom is directly linked to wealth creation, and cannot be achieved without elaborate planning, first to reach the goal of being financially independent, and second to maintain that level. The goal is to achieve an amount of capital which not only provides enough regular returns to meet ongoing lifestyle expenses, but also that the composition of capital is such that it is likely to increase in value over time, so that future returns are generated on the increased capital base and are able to take care of the future increase in expenses due to inflation.

While for the majority of families it would seem very difficult to reach such a level, it is certainly not impossible, and can be achieved with some discipline and sacrifices.

Below are some of the rules which from my experience are paramount in wealth creation and consequently, in achieving financial freedom:

Decide upon your level of wealth required for financial freedom – This will be directly proportional to the lifestyle you wish to follow after becoming financially independent. If one is used to living and dining in Five Star comfort regularly and expects it to continue after becoming financially independent, obviously a much higher level of wealth has to be targeted than for someone who is happy eating out once or twice a month. Hence scaling down one’s lifestyle can lower the threshold required for financial freedom.

Know where you are before you start – It is essential to make a complete list of one’s Assets and Liabilities, Incomes and expenses (both current and expected in future) and cash flows before one starts. One cannot reach a destination without knowing where he or she is starting at.

Give priority to protection of what you have – Insure all your assets as well as payment of liabilities against unforeseen circumstances which have the potential to destroy your wealth.

Know your attitude to risk - This depends upon one’s personality, age, commitments, current level of assets/liabilities/income, etc. Attitude to risk is not fixed, and may change over time or due to changing personal or external circumstances. Generally, higher the capacity and willingness to bear risk, higher is the return, but this is not always true.

Get your finances under control – This implies stopping money leakages, however small or insignificant they may seem. Most money leakages are through unnecessary tax and interest expenses, wrong spending and wrong investments. Money leakages are the most common reason for inability to create wealth.

Pay off debts on priority - Unless the debt is incurred for creating an asset which is expected to increase in value or for business purposes, it is not advisable to incur debt. Any other debt, if incurred, should be paid off on priority.

Keep the taxman at bay – Apart from interest, tax expense is the highest expense item which prevents long term wealth creation. Be prepared to pay for expert tax and financial advice. It may seem expensive at first, but the benefits will far outweigh the costs in the long run.

Understand that there is no such thing as free advice – Advice given by many financial product sellers may seem to be free (as they do not charge you fees but earn from product commissions), but in the long run it must align with your financial goals. If not, it can be very costly indeed. There are only two mantras that ultimately work – spend less than you earn, and buy low and sell high.

Understand that gaining wealth is a slow process – Earning it too quickly (say a lottery or inheritance) may make you rich, but it does not give you experience in acquiring wealth, which is vital for keeping and growing that wealth.

Understand and implement the power of compound interest - Albert Einstein called it the Eighth wonder of the world. Interest compounded over a long period of time has a tremendous capacity to create unimaginable amounts of wealth.

Lastly, understand and accept that money is not the solution to all problem - It makes life easier, but does not solve all problems. It is the oil that smoothens the engine. It is not the engine. So take it easy and do not be consumed by the exclusive desire to earn more and more, as it will destroy peace of mind and defeat the objective of being financially independent.

                             

http://www.business-standard.com/article/pf/10-tips-for-financial-freedom-114042800185_1.html