MAKING YOUR MONEY MAKE MONIES- Keys to Wealth Creation

“I have a friend that from high school. I hear from him about every five years, and he is always excited because he has found the perfect Job. He is ecstatic because he has found the company of his dreams. He loves the company. It’s doing exciting things. He loves his work, he has an important title, the pay is great, the people are great, the benefits are great, and his chances for promotion are great. About four and a half years later, I hear from him again, and by this time, he is dissatisfied.




The company he works for is now corrupt and dishonest, in his opinion; it doesn’t treat its workers with respect; he hates his boss; he was passed over for a promotion, and they don’t pay him enough. Six months go by and he’s happy again. He’s ecstatic because he’s found the perfect job…again.

His life’s path looks something like a dog chasing his tail. It looks like this. His life pattern is going from job to job. So far, he lives well because he is smart, attractive and personable. But the years are catching up with him, and younger people are now getting the jobs he used to get. He has a few thousand dollars in savings, nothing set aside for retirement, a house he will never own, child support payments, and college yet to pay for. His youngest child, 8, lives with his ex-wife, and his oldest child, 14, lives with him.

He used to always say to me, “I don’t have to worry. I’m still young. I have time.” I wonder if he’s saying that now”.

This is an example of a man’s search for Financial Freedom, narrated by Robert Kiyosaki and excerpted form his Best selling book “CashFlow Quadrant”.

The CashFlow Quadrant represents the different methods by which income or money is generated. For example, an employee earns money by holding a job and working for someone else or a company. Self-employed people earn money working for themselves. A business owner owns a business that generates money, and investors earn money from their various investments—in other words, money generating more money.

Different methods of income generation require different frames of mind, different technical skills, different educational paths, and different types of people. Different people are attracted to different quadrants. Each quadrant is different. To generate income from different quadrants requires different skills and a different personality, even if the person found in each quadrant is the same. Changing from quadrant to quadrant is liking playing golf in the morning and then attending the ballet at night.

Wealth Defined.

Wealth to most of us, just like the man in the example above is, getting a comfortable and well paid job, having money enough to answer to all your life necessities, acquiring cars as a form of assets and so on.

Robert defined wealth as “The number of days you can survive, without physically working (or anyone else in your household physically working) and still maintain your standard of living.”

For example:  If your monthly expenses are $1,000 a month, and if you have $3,000 in savings, your wealth is approximately 3 months or 90 days. Wealth is measured in time, not dollars.

Most of us spend our lives making money rather then building wealth, we spend money on things that require us to make more money. While we all want a home and a car, preferably a home and car that we love we must also make sure that some of our money gets to work making money for us building wealth for us to enjoy.  The only way to become free of the necessity of daily work is to make your money work, by working on wealth creation we can build a more full filling life.  Life should be about fulfillment, enjoyment and satisfaction. In order to do that you need to be free of the need to provide for the basics.

Building wealth for yourself is not about working harder, it’s about making choices that will get your money working.

The Keys to Wealth Creation

We shall briefly just state the Keys to Wealth Creation, and discuss them extensively in our next articles.

INVESTMENT – In order to make money you need to put some money down.

TIME – Time is a strong ally in making money. A small amount saved now is worth much more then a larger amount in the future. This is because once the money is invested it starts making money and this money it makes can then in turn make more money. This is known as compounding and for most extremely wealthy people compounding has been a key to their wealth.

RATE OF RETURN – How much your money makes is also important. If over time you can achieve a better rate then the compounding effect will be stronger then with a lower rate.

Ultimately, it is not how much money you can make that matters, but how much money you keep and how long that money works for you.

Financial Intelligence is not so much how much money you make, but how much money you keep, how hard that money works for you, and how many generations you keep it for. Stay Informed!

Reference: Rich Dad’s CashFlow Quadrant by Robert Kiyosaki

Making Money Monnies