It’s not just in the books you read or the seminars you attend. While they may be a huge help, The Secret To Becoming A Property Millionaire; Effortlessly depends more on your understanding of and participation in two distinctly different financial worlds.
Many meander along and accept the status quo in life.
Others, hungry to find the shortest path to their financial success, often search long and hard for answers… everywhere but in the right place.
If I were a betting man I would back the person with the right attitude who lacked equity and cash flow, over someone with equity and cash flow… but wrong thinking. I believe it’s those with millionaire mentality that win financial marathons.
Two Distinctly Different Financial Worlds
There are two distinctly different financial worlds. While we all physically live in one, we need to be like mental squatters in the other… and refuse to be moved out.
The Cash World
I like to call the world in which we physically live “The Cash World”. This is where we daily transact… food, clothing, shelter, entertainment, transport and so on.
Everybody lives and transacts in this Cash World… but not everybody thinks there!
Many who venture into business do so with a wrong mindset. With a cash-flow-only focus, they lose sight of the bigger objective; building equity.
It could be more accurately said that while these people thought they were buying a business… they really bought themselves a job.
The Equity World
In saying that we all operate in the Cash World, not all have their thinking there. The business owner who thinks according to “The Equity World” tends to buy or build businesses for the purpose of creating equity.
It is this (significantly smaller) group that will one day enjoy choices that most will only ever dream of. They may choose to sell their business for many times the annual cash flow, perhaps list it on the stock exchange… or simply leverage against its increased value to invest further.
Cash World thinkers spend most of their time working in a business. Equity World thinkers spend the bulk of theirs working on a business.
McDonalds As An Example
McDonalds is a great example. Ray Crock may have started out working in his first store but he quickly developed systems that allowed his business to grow while he went and did other things.
The opening of a new McDonalds “restaurant” is not to help the Crock family improve their cash flow.
This family is not in the hamburger business… they are in the property business.
By finding a suitable site and whacking up a new “restaurant”, they immediately increase the value of their property holdings. Each time they do this, they create new equity which empowers them to leverage into yet another store… and so their empire grows.
The Interchangeable Value Of Both Cash And Equity
Did you know that cash and equity are interchangeable?
They are! We can work for cash and buy equity; by either purchasing new property or reducing the debt on existing property. Equally, using equity, we can set up lines of credit (or similar) to provide us with cash.
The Secret Of Wealth Creation
The secret is… there is no secret! I find that just about anyone who has succeeded in their chosen field; be it finance, business, sport, health, relationships or whatever; is happy to share their story if you were interested and bothered to ask!
When it comes to wealth creation the tools you need were actually taught to you at school; they are leveraging and compounding.
Albert Einstein once said:
“The most powerful force in the universe is compound interest”
It’s so very simple. Using a relatively small measure of your equity, combined with a large contribution from your bank, you can control an asset that increases in value over time. This in turn generates more equity allowing you to repeat the process over and over and become a property millionaire; effortlessly.
In essence, that’s it… anything else is simply superfluous noise!
Next week I will continue this topic, unravelling exactly how leveraging and compounding works.
I will show you specific examples of how to harness the powers of leveraging and compounding to become a property millionaire; effortlessly.
In life,we all desire to realise our dreams and goals and learning this stuff is something anyone can do.
To request a complimentary Financial Health Check… click here
To view last week’s article: “How The Wealthy Create Money From Thin Air”… click here
Happy Investing,
Nick Lockhart
mrd Customer Care Program… because investing is personal
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