Managing Your Four Pillars of Wealth Creation

You may have attended seminars that teach you different strategies on how to manage your financial wealth wisely.

Have you ever wondered what YOUR REAL WEALTH is? You may have become so caught up in earning money and making more profits that you have lost sight on the things that really matter in your life. These things include your health, your family, your contentment, and your happiness.

The four pillars to wealth creation includes your financial wealth, your physical health, your mental wealth and your spiritual wealth. In order to have a completely successful and happy life you need to keep these four areas of your life in balance.

Sadly, you may have noticed or know of a seemingly successful business person who does not enjoy and appreciate the real wealth in their life. They may drive the best cars that money can buy or live in houses that you might only dream of but what good is all of these things if they are suffering from poor health, their family life is falling apart, or they have been dishonest and lost their integrity in order to acquire them. They may be experiencing severe health or family problems that all the money in the world will not cure.

If you are a person who is constantly on the move to find a better business or better investment opportunities, if you are always in a hurry and you never have enough time, just take a few minutes to reflect on your life and make sure you are not compromising your health or your family to achieve these goals. For you who do not take this time to reflect, it is important that you to realize these three things.

The first is the fact that only you can manage your spiritual and mental well-being as well as your physical health because you are in control of your actions and your feelings.

The second thing you need to realize is that you need to let past failures go, if you don't they will continue to haunt you and you will suffer needlessly.

The last essential thing you should remember is that it is possible for you to lose sight in what is really important in your life when you concentrate too much attention on things that really don't matter when you are lying on your death bed.

Through it all what is most important is in knowing who you really are, being honest with your self and being able to examine your self properly so that you will know what truly makes you happy and satisfied.

I wrote this article not to tell you that money doesn't matter because it does. The real question here is "What are you willing to sacrifice to have more money?"

Here are two questions you need to ask yourself.

The first is to ask yourself whether you will allow stress from your work or business to hinder you from having the joy in your life you want. It is possible to become so caught up with problems involving your work that you might not notice that you are continually making your body suffer from stress and neglect.

Then the next thing you need to ask yourself is whether you will continue to give time to activities that will not provide a significant improvement in your way of life.

You may have heard of time management skills and its importance, are you allocating your time wisely to fruitful pursuits? Are you using your time to bring balance into your life? Charles Munger, Warren Buffett's business partner in Berkshire Hathaway said that he uses the first hour of his day on improving him self and the next 9 hours of the day he sold to the highest bidder to provide a living for his family and money for his investments.

It is important to answer these questions honestly to determine if you are really living a balanced life or has your life become out of balance? The key2wealth.net web site is dedicated to providing balance in your life using the four pillars of creating wealth in your life.

Treasure Hunting

Find new uses for the financial tools you have lying around the house! Life insurance, investments, and even your credit cards are all waiting for you to find a new purpose for them - one that will increase your wealth and get you on the road to financial independence.

I'm a financial educator by calling and by profession. But when you get to know me and my family, you will discover fairly quickly that we are collectors of old, fun or unusual things. Some people might call it junk, and in fact that's exactly where my husband finds many of our treasures - in the junk other people throw out.

Garbage to Gold 
We've all heard the saying, "One man's trash is another man's treasure." Well, in my family, we find so many treasures that we have turned it into a side business for my husband. He is very handy so it's pretty simple for him to take an old rusted, broken such-and-such and give it a quick sanding, glue and some paint and 'voila' - it's better than new.

Now it's not junk that I want to write about. Well, it sort of is. Treasures are all in the eye of the beholder, right? In other words, how you perceive something will give it either value, or not. The trick is to see value from multiple perspectives.

Let's look at junk for a minute more, then apply the concepts to financial items.

I'm looking around my office for an item I can use as an example of some junk that has been re-purposed, and realize there are too many items to choose from.

I have a rusted watering can holding silk roses on my desk, a post office sorter holding up my desk and organizing my papers, a carpenter's nail box holding my paperclips and sticky notes, an old lampstand holding my pen, a solid maple wooden kitchen counter as my desk top surface, faded drapes, remade into blinds, a very high-tech keyboard tray rescued from a dumpster, and one of my all-time favorite junk makeovers is my office chair covered with an old leather coat.

A Second Look at Everyday Items 
While I'm not suggesting you all become junk collectors, I'd like to share with you some of the questions we ask when we see something discarded at the side of the road or offered inexpensively at a garage sale:

What could this be used for? Who could use this? How could we re-make, or re-do this? Where could it be used? Why would someone want this? What would need to be done to re-purpose it? How much time and/or money would that take to accomplish?

Now let's look at financial things: credit cards, mutual funds, life insurance, real estate, your job or profession. Start asking some of the questions above, and rather than the usual answers, keep asking and soon you'll start to come up with answers like this:

· You can use credit cards to increase your wealth and help you reach your goals;

· Mutual funds are a fabulous way to expand your financial knowledge and learn investment savvy;

· Life insurance has wonderful applications for you while you're alive;

· You can purchase real estate for purposes other than providing the home you live in or an investment property you rent or flip;

· Your job or profession has multiple ways you can earn income from while still meeting the requirements of your employer and without you having to work overtime or pick up another job or contract.

Concentrate on the possibilities 
The key is to keep asking yourself and others and never let yourself answer the question with a 'can't' or a 'but' or an 'I tried that', or something similar that says, 'that will never work'.

How do you know? How important is your reaching your goals? I realize it is easier to look at your current situation and think it's all junk, that you've "wasted your money, your time, and coulda, shoulda, woulda done things differently if only..."

However, step number one is to start where you are. The past is gone and the future hasn't arrived yet.

Where you are is where you're supposed to be. The search for your treasure starts here and will take you on an amazing journey uncovering hidden gems along the way. You'll climb some mountains - maybe even climbthem sideways or backwards, and find new and interesting uses for the transactions you make every day.

You are treasure hunting for your goals and dreams so you need to learn to see the 'junk' in your life as beautiful jewels that all add up to your overall life's wealth. 

Hot Tips to Grow Your Super

The superannuation industry in Australia is going through a remarkable period of growth and media awareness. (We have all seen the recent frenzy of advertising activity, press and TV coverage.)

Today, ordinary people are now realising that a Government pension won't give them the lifestyle they want in the years when they are not earning an income. The need to save money for the future is more than a hot topic, it has become a big wake up call to millions of workers who have low superannuation savings.

The standard superannuation contribution by employers is currently 9% of your salary, but the reality is this is not enough to cover basic living expenses and bills in retirement, never mind that elusive trip of a lifetime overseas. 

So how about some easy ways to grow superannuation? Here are five top suggestions.

1) Regular contributions really add up.

Starting early pays off. By putting more money each week into your superannuation account, (in addition to the 9% employer contribution) the difference can be remarkable. For example: if you added $50 a week starting from the age of 25, this grows to over $160,000 extra by age 60.

2) Hold a garage sale. Turn trash into treasure.

No spare cash? Look around your house for old furniture, sporting goods and electrical items. Put the proceeds from your weekend sale into super. Your contribution will earn compound interest until retirement.

3) 3 million Australians have unclaimed superannuation. Are you one them? Go to http://www.unclaimedsuper.com.au

One in three workers have unclaimed super. It's a huge statistic. In total, there's AU$7.2 billion, or an average of AU$1,600 per account waiting to be claimed by Aussie workers. It may not seem a large amount, but if you dropped $10 in the street, you'd quickly pick it up! What's more, this is a no cost service and it also allows you to transfer old super into your current superannuation account.

4) Roll your super into one fund. Pay less fees.

If you have worked casually or moved around from State to State, you may have several superannuation accounts with low balances - and you're paying fees for each one of them. Fees are taken from any investment returns you have made which mean less money in your account. The higher your fees are, the harder your fund's investments need to work to provide adequate returns.

It makes sense to consolidate all your balances into one account. One fund is easier to manage. Less paperwork to worry about. And of course, you save on paying fees. It is important to look around and select funds which charge low to reasonable fees.

5. Choice of Fund. Your personal situation.

On July 1st 2005, a major industry initiative took place with the launching of "Choice of Fund". Are you one of the many eligible workers who can make a new choice about which fund you belong to and where your super is invested?

A word of advice, do your homework. Don't just listen to your mate Bob!

Compare industry performance and past results. Look at the entry fees and exit charges you may have to pay. Review member benefits such as life insurance coverage. (Will you need a new medical to get the same coverage you currently have?) 

Changing funds could be a good move, or may not improve your returns at all.

The final tip. Whatever you do with your super, think super carefully.

A Different Way to Look at Debt

The majority of 'financial gurus' will advise that, in order to become rich, you should work hard and pay off debt. They believe that all debt is bad and that the less debt you have the better.

However, sometimes this is not the case and the advice of 'get out of debt' can be extremely limiting and can actually STOP someone (like yourself) from becoming rich.

In order to get rich you need to understand the different types of debt, and you then need to use the good kind to make yourself rich. The two types are:

1. Bad Debt - This is the one that you have to pay for, that takes money out of your pocket each month in repayments. Usually credit cards, personal loans, car loans or home loans.

2. Good Debt - This is the one that puts money into your pocket, that earns you money that you wouldn't have been able to earn otherwise. Eg. Debt from purchasing a positive cashflow property where rental income is great than all expenses.

The thing that determines the good from the bad is the effect it has on your cashflow. The good adds to your cashflow each month, the bad takes away from your cashflow each month. Good debt makes you richer and richer, bad debt makes you poorer and poorer.

In order to look at debt in a fresh way you need to look at your debt in terms of cashflow, not in terms of the overall figure or net worth. So instead of saying "I have $20,000 of debt" say "My debt costs me $100/week".

By looking at debt in this fresh way (looking at cashflow instead of the figure) you can begin to see whether your debt is good debt or bad debt.

For example if you think all debt is bad then when someone says pay off all debt you will agree with them. But if you look at your debt and you see that your $20,000 of debt is making you $1,000/month, then the advise to "pay off all debt" is stupid advice.

By looking at debt in terms of cashflow you can become financially free quicker and you can easily reduce the stress of your debt.

My wife and I had around $20,000 of personal debt from before we got married. That figure "$20,000" was quite overwhelming for us. But, by looking at debt in terms of cashflow, we can then see that our debt is currently costing us $100/week.

By looking in terms of cashflow I have shifted my thinking and am now looking at ways for our debt to cost us $0/week. Then it will have no effect on our cashflow and we can keep it as long as we want.

If I just looked at debt in terms of the amount of the liability, I could miss opportunities to make money while I was busy paying off my debt.

I am not a financial advisor and this email is purely to educated and to get you thinking. Don't take this email as advise for your personal situation. I am not saying that you should rack up loads of consumer debt if you can make it so that it costs you $0/month. I just want to offer an alternative to the way everyone thinks about
debt and money.

Let me share with you my method of getting rid of my debt so that I will become rich in the process:

1. Minimize bad cashflow from my debt - Lower the cashflow from my debt for $100/week to about $10 through different financing options and lowering interest rates. 

2. Use the money I would have used to pay off debt to buy assets - Instead of paying $100/week I am only pay $10 per week so I have $90 per week left to invest in assets that generate an income for me. For me those assets will be positive cashflow real estate. 

3. Allow my assets to cover the costs of my debt - Because my assets are making money each week I can then use that money to offset the costs of my debt. My debt now costs me $0. 

4. Allow my assets to pay off my debt - Inflation causes the income
from my assets to go up, while my debt repayments stay the same, so over time I can make extra repayments onto my debt from the income my assets are generating me. 

5. Have no debt and a bunch of assets - At the end of it I have payed off all my debt without working hard for it, and I now how a bunch of assets that are STILL generating me money every week. So I am now richer than before.

If I was to just pay off my debt then I would have worked really hard and payed off my debt, but I would have nothing to show for it at the end of all my work. At least this way I end up with no debt AND assets that generate me income.

So think about your debt in terms of cashflow and think about ways you can cause your debt to cost you $0/week or even make you money.

Becoming financially free in just 5 years is possible for anyone. It doesn't matter what your current financial situation is, you can become rich and never have to work again in just 5 short years. You don't need a high paying job or a get rich quick scheme, you just need real training on creating real strategies for getting rich

How To Deal With Your Creditors

However far you are along the road of financial/debt problems, the same principles apply to dealing with your creditors.

However rude, intrusive, threatening the correspondence/telephone calls FROM your creditors, your correspondence/phone calls TO your creditors must be:

* Calm
* Brief
* Factual
* Relevant
* To the point

You must create the impression that you are efficient, knowledgeable and trustworthy. The person dealing with your correspondence is merely doing their job, which is acting on behalf of their employer -- to whom you probably owe money. This person probably has the opposite point of view from you, but it is not personal and you must not let it become so.

Just as you would, this individual will respond better to a person who appears to be calm, and believable, and know what they are doing.

How can you appear calm and believable, efficient, knowledgeable and trustworthy, when you possibly owe more than you can afford and have probably made past mistakes? The answer is that your past history is less important to the person dealing with your account than your present attitude and what that promises for the future.

That is not to say that what you have done in the past has no relevance, or that you can go on to make promises you don't keep - far from it. However, if you acknowledge your current problems, explain your past mistakes if required, and most important of all, do everything you say you will do from now on, you CAN improve your relationship and situation with your creditors.

If you react with anger, if you are agressive, if you fail to keep your promises, you will merely make your problems worse.

Be calm, be prepared, and make these all-important first steps work in your favour.

Mend Your Money Mistakes

Don't tell me you haven't made any money mistakes - better yet, don't tell yourself you haven't made any money mistakes.

Everyone makes them and I don't mean just the big ones - on a day-to-day basis, we are all guilty of making money decisions that are not supportive of our bigger vision for our life.

Let me start then, by sharing with you my big mistakes from last year because a big part of mending money mistakes is to know what they are.

Mistake #1 - Not Looking After Yourself 

I did not take enough time to look after myself. While I love my work and almost everything about it, believe it or not there are other things I enjoy doing.

Because there is always something fun and exciting and necessary to do, I did not take the time to exercise enough, go to bed early or take time out to just be.

I know that last year I was more a human doing than a human being, and that if I continue on this path, I will wear myself out and end up no good for anyone.

All work, even enjoyable work, is not a balanced life or sustainable lifestyle.

Mistake #2 - Neglecting Time With Family and Friends

I did not spend as much time with my family and friends just for fun.

I am extremely fortunate because I work from home and my family is around all the time.

We make an extra effort to plan travel together, and while we probably spend as much time together as we can given work, school and other social commitments, we did not take the time to just 'hang out' together and play a game, watch a movie, go for a hike, or bike-ride or putter around the garden.

Mistake #3 - Failing to Follow Up and Stay in Touch 

I did not communicate enough with my clients and prospective clients. And, I did not stay in touch with all the amazing people I have met throughout the year.

Throughout the day, there are always lessons and situations that come up that are valuable teaching opportunities.

For some reason, I have not taken advantage of all the amazing technology available to share these thoughts with you.

It is one of my commitments for this year - to be more consistent with the blog, audio, video and written communication.

Mistake #4 - Trying to Do Everything On Your Own

I continue to fall back on an old habit - trying to do everything myself.

This isn't because I don't have great people to help me, it's just that for most of my career it was me.

I was self-employed and if something was going to get done, it was going to happen because I made it happen.

Well, in a corporate environment, if something is going to happen it's because the team made it happen.

Mistake #5 - Starting Something New Before the Prep Work is Done

And, the big one, I started something before something else was done.

This mistake needs to be written into an entire book.

Let me summarize by giving you an example, because in 2007, I experienced the money mistake that I see again and again and again with my clients and the people I meet, just in different circumstances:

I put a budget together, but before the money was completely pulled together, I marched forward.

That single mistake has cost me stress, money, lost opportunities and the most valuable thing of all - time.

Starting something new before completing something else is a common money mistake.

It's the mistake that people make when they start saving for something - they buy it because it goes on sale, not because they have the money for it; and it's the mistake people make when they retire - they leave work because they have reached a certain age - not because they have arranged their finances to live a financially independent life.

Find the Right Sequence 
This mistake could be the biggest of all that needs mending for most people - to do things in the right sequence.

We have to look after details in the right sequence.

We have to look after ourselves before we can look after others, and we have to look after the details before we can realize the big picture.

Don't Slip into Crisis or Windfall Planning 

The out of sequence financial plan is everywhere with the constant tendency to jump the sequence and go right for the quick fix and to do the urgent and immediate activities rather than the not urgent but important ones.

It's constant and yet we all know the sad statistics of lottery winners who end up with very little money left, if any, within a few short years of their winnings.

That same lure is what we call windfall planning.

It's why people who receive inheritances, divorce settlements, and debt consolidations continue to struggle with money.

Take Stock of the Good You Have Done 

When we focus on what we did wrong and at the same time try to set goals, we are just creating a bigger gap between where we are and where we want to be where the bridge to connect the two is a flashing light telling us "we'll never make it because we're no good - look at all the bad things you did before, what makes you think you can get to the other side and have those goals?"

So while it's extremely important to be aware of your shortcomings when mending money mistakes, and setting and writing new goals, it is even more important that you take stock of what good you have.

And that good becomes the first step of the sequence that connects your current situation to your goals and dreams.

To start the year off and mend your money mistakes, take stock of these important first 3 steps - in sequence:

1. Where are you today (what is good and what can you do better?)

2. Where are you going (what are your goals and dreams and why?)

3. What do you have to work with (specifically, what financial and non-financial resources do you have to build your bridge with and mend your money mistakes?)

And lastly, step 4 would be to ask for support... so, how can we help? 

16 Simple, Everyday Ways to Save Money

Here are 16 of the simple, everyday changes that have worked for us.

1. Use a coupon, absolutely whenever possible. I was really surprised by how many money-saving opportunities are out there when I knew where to look.

For local purchases, get an “Entertainment Book” each year and you will save on those inevitable everyday expenses ranging from dining out to accommodation and admission to movies, theme parks, etc.

For online purchases, stick to the reputable retailers. You certainly will not save any money if you are the victim of fraud or if you are simply unable to return an item. And before you start shopping, always look for a coupon code that will allow you to save on your purchase. In the past, many online retailers sent out promotional codes as a series of letters or numbers that could be entered at checkout. Now, many retailers use a button or text link that automatically activates your coupon when you click through, so it is often a good idea to find the coupon first, before you start to shop.

2. Shop around. The internet is an amazing tool for researching products and retailers, as well as for comparison shopping. We make nearly all of our large purchases online. It is also important to know where to shop. For holiday gifts, plan ahead and check out the big online discount stores. Many offer significantly reduced prices on trusted brands. And you can get great delivery rates too, even on large gifts. I once had an enormous game table shipped to me for $2.50.


3. Keep a running list of gift ideas for your loved ones. I have found that when I am confident that a gift is perfect for the recipient, I am much less likely to overspend. But that kind of inspiration rarely hits me during the pre-Christmas rush, so I need to keep a list going the whole year through.

4. Budget. Of course, it is important to know what you are really spending. For years, the budget I had in mind was really more of a “wishful thinking” budget. But this quickly led to debt. It pays to get realistic. Whether you use a computer program or a simple ledger book, make sure you know where your money is really going.

5. Save for the future. Take 10 percent of your income and put it in savings, right off the bat. Now you know what you need to cut back on (or how much more you need to earn) to shore up the deficit.

6. Plan ahead. You will want to make sure you have money in the bank for emergencies. Experts say you should have three to six months of living expenses set aside, for those just-in-case times. It sounds like a lot, but start socking away money each month, and it will add up fast.

7. Get organised. When your home is organised, you will be less likely to spend money on items that are already hiding in the nether reaches of your closet and drawers. The same goes for your refrigerator and kitchen cupboards. Purge and organize before you shop.

8. Simplify. There is a certain romance to the “simplify your life” movement. And having too much stuff really does weigh us down. Take a look at everything in your home. If it does not add joy, beauty, meaning, or usefulness to your life, give it away. And when you are tempted to buy something new, it must pass the same test.

On a quarterly basis, go through your house and ask yourself these same things again. Go through your closet, attic, garage, and basement and purge those items that do not add genuine joy, beauty, meaning or usefulness to your everyday life.

9. Reduce, reuse and recycle. A simple lifestyle, for me, is about reducing my urge to over-consume. It is about being kind to the environment. It is about spending less money on material things, so that I have more time and money to spend on memories with my family. Make changes that will help the environment and your purse at the same time. Install water saving kits on your toilet. Write on the back sides of paper. Use reusable containers in your lunches. All these little things really do add up, and it is important to show our children how we can all be part of the solution.

10. Shop without your kids. I know that if I get a shopping cart at Coles and I do not have a list, I will spend $150. If the kids are with me, I will spend even more. This is another reason it makes sense to do your shopping online. You are less likely to purchase the incidentals.

11. Make sure that your credit card is paying you back via an incentive program. I found a credit card that allows me to earn points on my daily purchases toward our annual vacation trip, including airline miles and hotel accommodations. Since most of my expenses each month are incurred at the grocery store, I found a card that rewards specifically for these types of purchases. Of course, you will need to make sure that you are paying off your balance each and every month. Paying a high interest rate on your credit card will quickly negate any savings you accrue on your incentive plan.

12. Lower your interest rates. If you are carrying a balance on a credit card, give the credit card company a call to see if they will give you a lower rate. Sometimes, it is just that easy.

13. Shop around for insurance. The money you pay for car, home, life and health insurance can vary greatly. Do some research to find out if you are getting the best rate.

14. Be wary of the influence of TV commercials and print ads, especially on your children. We hear fewer cries of “I want that!” when we keep our kids programming to those channels rely less on advertising dollars, such as the ABC and some pay TV channels.

15. Play “Time Warp.” This is a technique I first learned from “My Monastery is a Minivan,” by Denise Roy, and I use it quite a lot. It goes like this: When you are tempted to make a purchase, mentally fast-forward through the life of the item. For example, in her book, Roy thinks she needs new candleholders. She imagines spending time at the mall to find them, soon having to clean them, and then, years down the road, packing them in the giveaway box. She shirks the purchase and soon rediscovers the heirloom candleholders that are packed away right in her own home.

I like to play this "fast forward" technique in reverse, too, asking: What new clothes did I buy last season? (Sometimes, I can not remember). Where are those "I have to have it" items now?

16. Keep your mind on abundance. When you are thinking about money, it is really important to get out of the poverty mindset. Too often, when we are focused on saving money, we are living from a perspective that focuses on lack and scarcity, which tends to bring about more of the same. It has been really helpful for me to make a conscious effort to see the world as infinitely abundant and to rest in the notion that my needs will be taken care of. This is generally a simple matter of thinking more about what I *do* have than what I do not have.

All my days of penny-pinching have certainly proven to me that it truly does not take money to make us happy. Many of my fondest memories have occurred in the smallest homes. My child’s favourite playthings tend to be the inexpensive items that were never designed to be toys at all.

And it is the simple, everyday pleasures that are the sweetest, when enjoyed together.