Written by Warren Black
Warren Black explains why people can't build wealth and how they maintain the status quo.
In this current climate, and time of great financial challenge, having the right mindset to build wealth is absolutely critical. So my tongue firmly in my cheek', here's 7 tips that will enable you stay broke (if you follow them!).
1. Always look for something for nothing. Don't go for excellence and high quality of service. Go for 'cheap and nasty'.
If you can get something for nothing (free from the internet, or a mate's rate), always do it. Avoid anything to do with paying top money in exchange for top quality service. Make sure you get the lowest price you possibly can. Look for the cheapest product or service in the market. Ignore quality at all costs. Price is what is important. The 'feel good' factor is irrelevant.
2. Always spend more than you earn, and pay your tax without question.
This is especially important. Never think about how to increase your income or reduce your tax. Just pay your tax without question. Don't be creative with your tax planning, no matter what. If you want to buy a new car, and can't afford it, just get a personal loan.
If you want to buy that new $5,000 super-duper vacuum cleaner and don't have the money, put it on your AGC credit card.
After all you want it now, you should have it now …
3. Maximise 'bad debt' and ignore 'good debt'.
If you have a mortgage for your family home, and a mortgage for your investment property, don't pay off the family home. Pay off your investment property loan.
Better still, if you have money sitting in your bank account earning 3% interest, keep it that way. Don't put it against your home loan to reduce your interest payments by 8%.
If you have personal credit cards, keep building them up. Put your savings into a term deposit. Don't pay off the credit card. After all, to go broke, you want to ensure that you are paying 18% interest into your credit card, and only getting 6-8% from your savings.
4. Don't get educated in how to invest your money wisely. That is the job of the experts ...
Put your total trust in your financial adviser or accountant. Do no research for yourself at all. The fact that the fund managers have all had terrible results in the recent stock market crash, well these things happen. Hopefully it will all come good. Don't educate yourself. It is too much hard work.
Don't get any wealth education. This is dangerous, because once you start understanding how to invest and make money, you might just start doing it.
5. Never ever protect your assets! If you own property or shares, just put them all in your own name. Do not put them in a trust or use any other strategies to protect them.
Live your life on the philosophy of the ostrich, ie. put your head in the ground, ignore the fact that the average person in Australia gets sued three times, and say "it will never happen to me".
Maybe it will. Maybe it won't. But it doesn't matter. After all, it saves you money …
6. Ignore insurance of all kind.
Take the attitude that insurers are rip off merchants and nasty people. Pay them as little money as you can get away with. Ignore insurance on your life, your car, on your income (for sickness and accident), on your health, because it will save you money today. Keep living your life on the philosophy of the ostrich.
7. Always give back less than you receive.
If you are doing business with someone, make sure that you give them the lowest level of service or quality of product possible, for the highest price.
If you are a car mechanic for example, use the cheapest parts, don't clean their car, and charge the highest price that you can get away with. This way will you make a profit.
Summary
Follow the above rules, and I give you my personal guarantee that you will achieve the desired result of never getting ahead financially. On the other hand, do the opposite if you want to forge ahead financially and build wealth during these challenging economic times.
Warren is a motivational speaker, and coach, investment advisor, lawyer and accountant. He has presented in Australia and internationally at many seminars, including investment seminars, tax seminars, and empowerment and transformation seminars, with a particular focus on seeing people have mental, emotional and financial success. www.warrenblackonline.com
