Building Wealth and Managing Money

Managing Money

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Money will come to you when you are doing the right thing.
— Michael Phillips


Are you lost in the rat race?

If you are like the majority of people, then it’s most likely you are encapsulated within a reality that is known to most as the rat race. The rat race was a term used to great effect in the now very successful series of books written by Robert Kiyosaki entitled Rich Dad Poor Dad. Within this series of books Kiyosaki points out how many of us are trapped within a rat race, where we go through a cycle of weekly and daily struggles that never seem to end. We are teased with promises of quick and fast money, however for most of us this only leads to a dead-end of false promises and lies. It just seems as though there is no pot of gold at the end of the rainbow.

This wealth management IQ Matrix will not earn you an abundant amount of money over night. Instead it is based on sound principles that have helped people to create long-term and long lasting wealth.

Throughout this discussion we will talk about creating the ideal wealth mindset, we will touch upon some sound principles to get out of a debt crisis, we will pinpoint some effective wealth building strategies that will get you focused and moving on the right track, and finally we will identify what components create a poverty stricken mindset, and what we must do to avoid locking ourselves into this way of thinking and behaving.


Please use this information only as a tool to guide you along your journey towards your financial objectives. Please also seek the guidance of a professional financial planner to further clarify the points presented within this article post and mind map.


Wealth Attraction Mindset

No wealth building strategy would be complete without a discussion of the mindset that naturally and easily attracts wealth on a daily basis. We will begin with a discussion about the wealth mindset because it lays down the foundations for everything that is to come. Without the right way of thinking, acting and believing, it is very unlikely that you will build long-term and long lasting wealth no matter what strategies or tactics you utilize.

Our mindset is an absolutely critical component that we must develop and improve upon on a daily basis to naturally align ourselves with the process of attracting more money and abundance into our lives. Hopefully by the end of this discussion you will come to understand the ingredients that make up the mindset of the rich and poor, and as a result you will alter your thinking, beliefs, habits and behavior accordingly to help you reach your desired outcomes.

The Characteristics of Frugality

Dictionary.com defines the word frugal as:

Economical in use or expenditure; prudent saving or sparing; not wasteful; entailing little expense; requiring few resources…“.

In short, it basically means that you live a life well within your means.

Those who built their wealth over an extended period of time, are often not big spenders but rather tend to live their life frugally. Living frugally involves specific ways of thinking and some simple yet effective action.

  • A frugal personality always negotiates better prices.
  • A frugal personality always focuses on their net worth.
  • A frugal personality creates a budget plan and sticks to it.
  • A frugal personality does not buy designer made clothing.
  • A frugal personality makes purchases using cash.
  • A frugal personality buys in bulk wherever possible in order to save as much money as possible.
  • A frugal personality does not purchase a brand new car.
  • Finally, a frugal personality marries a frugal spouse who is responsible, loving, supportive, capable and honest.

You must therefore look for as many ways to save, to reuse things, to do more with less, to avoid following the lavish expenses of your neighbors and friends, and to get the most out of every dollar that you earn. Living sparingly, and investing wisely is the key to a frugal mindset and way of life.

An Indispensable Attitude to Cultivate

A wealth attraction mindset always proactively controls their life and circumstances. They create and control their life in ways that brings greater stability and security for the long-term. They are not swayed in their decision making by the crowd. Instead they aim to follow their own path, to create their own plans that are built around their deepest passions and desired outcomes.

A wealth attraction mindset also understands that the crowd mentality will always react to events and circumstances. This mentality leads to impulse shopping and spending, it leads to emotional management problems and ill-fated decision making.

More Indispensable Characteristics

A wealth attraction mindset also cultivates the characteristics of gratitude, discipline, self-sacrifice, hard work and an innate passion for living a full yet well managed, rounded and grounded life. They cultivate and grow these characteristics at every opportunity they get. And it is these characteristics that provide the foundations for strong habits that naturally build long-term and long lasting wealth.

Setting Clear Wealth Goals

Goals are critical and important aspects when it comes to building long-term success in business and in life. When it comes to growing long lasting wealth, goals become ever so important as they provide you with a carrot stick that is dangled out in front of you as you are progressing along your financial journey towards abundance.

Yes, indeed we are very much like donkeys, and we therefore need both long-term and short-term goals that will motivate us and propel us forward no matter how difficult the road ahead may get. The only difference is that your carrot stick is always within your reach and under your control. There is no one sitting on your back going for a ride. It is just you, the world and the temptations/opportunities that present themselves. This is where self-discipline comes into the picture and becomes one of the most indispensable characteristics towards helping you build long-term wealth and abundance in your life.

Ask the Right Questions and the Answers will Come

It seems no matter what topic we discuss that we always mention the importance of having the ability to ask effective questions.

When it comes to building wealth, questions are no doubt the keys that open the doors to many abundant opportunities. However, we must first come to a realization that questions must be asked. Once we accept this realization, we must then discover means and ways to ask the most effective questions that will stimulate efficient creative thought to bring forth the answers that we are after.

Create a set of wealth creation questions that you will ask yourself on a daily basis. Some examples include:

How can I earn more money this week?

How can I earn a passive income while I sleep?

How can I earn an extra $20,000 this year?

Focus on how questions over why questions. How questions will stimulate creative answers, while why questions usually only stimulate an ever growing list of excuses.

Wealth Creation Habits

Once you have cultivated the wealth building characteristics into your personality and lifestyle, it will be naturally easier for you to develop some key critical wealth attracting habits that will keep you on track and moving in the right direction towards your financial goals.

Paying Yourself First

The habit of paying yourself first will help you to prioritize what is most important in your life. However, keep in mind that paying yourself first does not mean spending your money. It rather means investing this money into the appropriate wealth building buckets we will discuss a little later.

Delay Gratification

Delaying gratification is another essential habit that will keep you under control and in charge of your financial decisions.

It is so easy for us to be influenced by advertisers to purchase items that are digging us into an ever deeper ditch of financial burden. Always control yourself, your emotions and your expenses. Don’t get sucked into making emotional purchase decisions that you know you will regret.

As a strategy, always delay making a purchase decision until you go home and have a good long hard think about it for a few days. Talk to your most frugal thinking friends and ask them to justify why you shouldn’t make this purchase.

Focus on What You Want

Another habit that you must cultivate is the habit of focusing on what you want. Always focus on the things that you want that will have the greatest impact on your future long-term financial success.

And finally, get into the habit of being patient with your money because often things don’t happen over night, and often you must work diligently and think strategically in order to experience the wealth and abundance you desire to have in the future. Be patient and all will come.

Wealth Creation Beliefs

There are quite a number of beliefs that we could discuss here that will assist you in building a wealth mentality. However, for the purpose of this discussion let’s touch on two of them.

Expect to be Rich

You must expect that you can and will be rich. Expect that riches will come to you by following these sound strategies on a daily basis.

No Limits in Your Ability

You must believe that there are no limits to what you can do. You are in full control of your life and destiny, and you will therefore bring anything you imagine into reality. However bear in mind, that anything you imagine might not come about the way you imagine it be. So be wary of this, be patient, apply what you learn on a daily basis, and things will eventually go your way — most probably in unexpected ways that you may not even have imagined were possible.


Digging Your Way Out of Debt

The statistics are staggering when you consider that the vast majority of people are riddled up to their necks in debt. It is so easy for us to get caught up in the spur of the moment when our emotions just overwhelm our intellectual decisions. However, there is no need to regret the days gone by, or the ill-fated decisions that have lead to this moment of your life. What we must do instead is learn from our past mistakes, and work today to effectively manage and pay off our debt once and for all.

Once you have successfully adopted a strategy to reduce and pay off your debt, only then will you be ready to move onto wealth building strategies that will grow and compound your money.

Here are a few debt management suggestions to get you started along your journey towards a debt free life:

Get on Top of Your Debt and Track Spending

The first place to begin when it comes to taking control of your debt is to determine what you owe, how much you owe, and to whom you owe it. Once you have moved through this step, your second task will be to develop a means to track your spending. Simply create a system and process of how you will be tracking how much money you are spending, where you are spending this money, and what you are spending it on. Only after these steps are fully complete should you move on to the next stage of debt reduction process.

Negotiate Your Credit Card Interest and Repayments

Visit all the banks, people and institutions that you owe money to and negotiate better interest rates and lower monthly repayments. You may be surprised how flexible some of these banks and institutions are if you are honest in presenting your case about your current financial circumstances. Remember, that everything is negotiable for the smart and savvy person. Once you have negotiated down the lowest possible repayments and interest rates, you are then ready to move onto the next step of the debt reduction process.

Consolidate Your Debt

Take the lowest interest bearing credit card (including monthly repayments) you negotiated within the previous step, and identify the process you could take to consolidate your entire debt onto this card. Speak to your financial institution or bank as they may have low interest introductory credit card offers available when you transfer your debt over to them from another financial provider.

Live a Fulfilling Frugal Lifestyle

Again we touch upon the subject of frugality as it is one of the most important fundamental aspects of long-term financial wealth.

Here are a few more suggestions for living a frugal lifestyle that will at the same time assist you with reducing your levels of debt.

Create a Weekly Budget

Create a weekly budget and stick to it rain, hail or shine.

Become a Savvy Shopper

Become a savvy shopper who makes purchases based on price rather than on brand perception. Look for specials and negotiate better prices at every opportunity you get.

Once you have completed your discount shopping adventure, simply return home and spend some pleasurable time in the kitchen churning out a sumptuous home cooked meal that will wet the appetite. By cooking and eating from home you will effectively save at least half the money you would normally spend on eating out.

Make Purchases with Cash or Debit Card

Make purchases only using either a debit card or with pure hard cash. Get into the habit of keeping cash in your wallet and using only this money to make your purchases. By spending only what you have and nothing more, you will set yourself on track towards ridding yourself of your debt.

Eliminate Unnecessary Expenses

Eliminate all unnecessary expenses from your life. Unnecessary expenses simply don’t fall under the category of needs. Ask yourself before you purchase something:

Is this something that I need?

Or is it something that I just want and can do without?

By being careful with what you spend your money on, and by following these simple guidelines, you will have more money at the end of the month left over to pay off the repayments owing on your credit cards and other liabilities.

Find Ways to Earn More

Simple, yet effective. There are always opportunities out there to make a little extra money that can go into paying off your debts. Look for these opportunities, however be very careful not to dip your feet into get rich quick schemes that ask you for a financial investment with a little time and effort.

If you are neck high in debt it is probably easier to look for a stable source of income that can guarantee you the highest possible hourly wage. Keep your eyes open and always add more value to what you do. In this way people will credit you for your work and as a result you may end up earning more in less time.


Wealth Building Strategies

The following wealth building strategies are not designed to make you rich and successful over night. Instead they present some sound and grounded principles that will progressively build your wealth over an extended period of time. Patience, discipline and dedication towards learning and implementing these strategies on a daily basis will be the factors that will make the most difference to your long-term financial success.

Take Charge of Your Income

By now I’m sure we all understand how important it is to take charge of our expenses. Here for this step, it is also very important to take control of your income earning ability. It is critical that you track where your money goes, and that you spend less than you earn. However, it is even more important to value your worth and time.

If you give more, than you should receive more. Simply ask for a raise if you sincerely feel that your efforts deserve to be rewarded. You must however be confident and secure in your own ability to negotiate your worth no matter what obstacles stand in your way.

Take Charge of Your Investments

Many of us are so caught up in the idea that we need to have a lot of money before we can start investing. This simply isn’t true. In fact, you can still be in debt and make money through the right investment opportunity.

Compound Interest

Begin first by utilizing compound interest to your advantage. For example, put aside money into a high interest bearing account on a weekly basis. Over time this money will grow and provide you with a low risk high return investment on your hard earned dollar.

Invest with Experts

If you are going to invest, make sure to invest with experts, with people who have a proven track record of success within the investment sector that you have chosen.

Invest in Assets

You should only be investing into assets and taking calculated risks that are within your means. Speak to your financial advisor for further information.

Utilize the Wealth Bucket Principle

The wealth bucket principle is a simple means of managing your income that will provide you with long-term security; open up the possibility for quick earnings, while eventually guiding you towards the affluent lifestyle you have always dreamed of living. However, be warned that this strategy requires diligent effort and discipline. There may be times when you could be tempted to try and cheat by taking shortcuts, and the moment you do, could be the moment the buckets crack open and threaten your financial security.

Let’s quickly discuss what the wealth bucket principle is all about.

Survival Bucket

Considering that your income (after tax) comes to a total of 100%. Let’s now take 70% of this income and place it into the survival bucket. The survival bucket is for your everyday expenses, your everyday needs without the luxuries. If you can easily manage on less than 70% then by all means add the remainder to the other buckets. However, 70% is a good figure to begin with.

If on the other hand you feel that you need more than 70% of your income to survive, then adopt the frugal mentality and read through the debt section of this mind map for ways to earn more and cut back on your expenses.

Security Bucket

This is your 2nd bucket into which you will be placing 15% of your income. This bucket is for long-term low risk security investment opportunities like the compounding strategy we discussed earlier. It is also for purchasing bonds. Any money that goes into the security bucket you will never touch, ever. Let it grow and grow. It will provide you with a secure and confident feeling that your wealth is increasing on a daily basis.

Growth Bucket

Place the remainder 15% of your income into this bucket and invest into higher risk endeavors such as mutual funds, real estate, business opportunities, options and stocks. Be diligent with your investment decisions and take time to study and learn about the best investment opportunities that can grow your money long-term.

The great thing about the growth bucket is that once you earn money from here you will distribute the profits evenly (33.3%) into three buckets. The first 33.3% goes into the security bucket, the second 33.3% goes back into the growth bucket, and the third 33.3% goes into your dream bucket.

Dream Bucket

This is the place where you make all your dreams come true. Whatever money gets placed into this bucket goes to purchasing your dream car, home, yacht, jewelery, holidays, and anything else that your heart desires.

The wealth bucket principle works, and can effectively set you on track towards living the life you have always dreamed about. Try it, live it, adopt it into your lifestyle, and most of all be patient. Great things take time, and when that time arrives it will be well worth waiting for.

Attract Wealth by Using these Simple Strategies

While you are preoccupying yourself with the process of growing your wealth, why don’t you also align yourself with wealth by doing things that will attract more of it into your life on a daily basis. Habits like constantly carrying cash in your wallet will provide you with a sense of abundance.

Write Out a Future Cheque

Writing out a future cheque to yourself for an amount of money that you desire to have at a future date, will provide you with the motivation to keep moving forward.

Value Your Personal Worth

Valuing your personal worth is another strategy that we already touched upon a little earlier on.

Socialize with Wealthy and Successful People

Socializing with wealthy and successful people may provide you with the insight you need to steer you on track towards your financial goals.

Contribute to Charities

Contributing to charities and helping those in need will bring a sense of contentment and satisfaction that will encourage an attitude of gratitude for your current life circumstances.

Absorb Your Mind in Wealth

Attract more wealth to yourself by continuing to absorb yourself with information about wealth building subjects on a daily basis. Read the financial section of the newspaper, pick up a book about an investment topic that interests you most, or simply have a conversation with financially minded people, or just spend time watching the financial news. Alternatively you can download the wealth creator mind maps and refer to them on a daily basis. ;)

All these suggestions may seem small and insignificant, however over time they can and will have a huge impact on the person you eventually become. :)


The Poverty Attraction Mindset

Just as we have a wealth attraction mindset, there is also a poverty attraction mindset that many of us are completely unaware of.

Simple things we do on a daily basis — seemingly innocent habits, beliefs and behaviors — all combine to create one powerful cocktail that repels money from our lives. By being unaware of this, we simply do not understand the impact that our everyday behavior has on our long-term financial success.

The quick discussion that follows isn’t by all means conclusive, however it does provide some guiding principles of a poverty stricken mindset that you must be aware of and work to remove from your daily behavior, habits, thinking and activities if you seek to achieve long-term financial abundance.

The Habits of a Poverty Stricken Mind

Those who are stuck within a poverty stricken mindset don’t realize or understand the impact that their daily habits are having on their ongoing financial burdens. If you catch yourself absorbed in any of the following habits, then immediately break yourself away, change your actions, thinking, emotions and look towards cultivating the wealth attraction mindset characteristics, beliefs and habits we discussed a little earlier on.

Easily Influenced by Others

If you are easily influenced by others, while continuing to hang around other people who constantly complain about their financial problems, then your financial journey is over up until the moment you make a decision to remove yourself from their presence. You have no chance of reaching a point of financial success in your life because others will just hold you down to their levels of thinking.

Be aware of this and remove yourself from these people immediately. Move away to another city, state or country if you have to. Just move away and get yourself out of their circle of influence.

Focusing on What Don’t Want

A poverty stricken mindset focuses on the things that it doesn’t want. Is it really surprising that these types of people end up getting what they focus on?

Seeking Instant Gratification

A poverty stricken mindset seeks instant gratification at every opportunity. They seek those little short bursts of pleasure to avoid immediate pain. On the other hand, the wealthy mindset focuses on long-term pleasure and they learn to manage short-term pain.

Making Constant Excuses

You will find a poverty stricken person always making excuses about their predicament, circumstances and position in life. Let go of the excuses once and for all. You are where you are, so live with that but decide to move forward in a better direction that will lead you to financial success.

If you really think about it, no one really cares about excuses, they are simply a way to draw sympathy from others. And if you have a habit of being around other like-minded people, then there is no doubt, they will give you all the sympathy they can muster in order to keep you feeling sorry for yourself for as long as possible.

Constantly Worried About Losing Money

People with a poverty stricken mindset always worry about losing money and their possessions. It is of course understandable that if you don’t have a lot that you will more likely worry about losing it. However, this is exactly what keeps people within their current life predicament, and is a pivotal reason why they will never achieve financial abundance.

Not Being Realistic About Money

A person with a poverty stricken mindset is often not very realistic about their money. They tend to dream a little too much and don’t back-up those dreams with the necessary actions that will make their dreams come to fruition in the real world.

Not Making Money Important

A person with a poverty stricken mindset simply does not make earning money a high enough priority. Yes they want money, and they want to earn it as quickly as possible, however when it comes to the amount of time, effort and energy they put into taking the necessary steps and actions towards earning this money, it simply pails in comparison. There is after all a big difference between just wanting something and doing whatever it takes to bring those wants into fruition.

Characteristics that will Keep You Poor

The characteristics of being undisciplined, ungrateful and having a dispassionate attitude towards money are pretty self explanatory. They will keep a person in a poverty stricken mindset for as long as they continue to cultivate these low level qualities within their psyche.

Limiting Beliefs that will keep You Stuck in a Poverty Mentality

It is important for us to fully realize the impact that our limiting beliefs can have on our earning power and long-term financial success.

For example, if you believe that money is difficult to obtain, then that belief will rule your money making decisions for the rest of your life, and as a result will sabotage your earning power and pull you away from the financial abundance you desire to obtain.

A Simple Lack of Financial Knowledge

Finally, a simple lack of financial knowledge keeps most people in a poverty stricken mindset. There is a saying that goes:

“What you don’t know cannot hurt you”.

Instead it should say:

“What you don’t know may not hurt you, but it could very well keep you where you don’t prefer to be.”

It is better to know then to live a life of ignorance and despair. Begin by reading one book, attending one workshop or seminar. Hopefully this will wet your appetite for more. Patience is the key, and discipline is the lock that will help you to stick it out for the long haul.


Final Thoughts

Financial success is definitely something that is within everyone’s reach no matter how dire their current life circumstances may be. Slowly, but surely we can all learn to master these simple strategies and potentially adopt a mindset that will naturally attract wealth and abundance into our lives. Stick with these principles, turn them into consistent daily habits and actions, and your time will come. Sooner or later opportunity will turn your way, however first, it is up to you to get that wheel turning in the right direction towards your ultimate financial goals and objectives.

I hope you enjoyed this post, and if you have any further thoughts, ideas, reflections or suggestions about this topic, than please feel free to comment below.


Time to Assimilate these Concepts

Managing Money

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Gain More Knowledge…

Here are a number of highly recommended free articles and online resources that will further help expand your understanding about this topic:


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9 Responses to “Building Wealth and Managing Money”

  1. Paloma CHR August 13, 2008 at 5:07 am #

    This is a wonderful website and even more wonderful the knowledge and skills you provide. Congratulations, really, congrats and thank you so much!

    Yours truly

    Paloma

  2. Adam Sicinski August 13, 2008 at 11:19 pm #

    Thank you for your kind words Paloma. Updates haven’t been regular of late due to a number of factors that have somewhat been out of my control :( However, I plan to get back into the content side of things shortly. Thank you for visiting the site.

  3. FunFastDebtElimination August 24, 2011 at 7:11 am #

    This is a very informative and extensive blog. I have the content to be invaluable.

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