How To Become Wealthy

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How to make money using the stock market and the internet -


<ul><li><p> A guide from </p><p> MAKEONLINEMONEYINFO.NET </p></li><li><p>1 Please turn over... </p><p>CONTENTS </p><p>1. Shock Warning2 2. Income is not wealth 3 3. No debt is a good debt4 4. Do things differently 8 5. Find out what your boss earns 9 6. Make sure you love what you do for a living 10 7. Recognise the value of time 11 8. Ideas are the new hard graft 9. Invest from your surplus13 10. Get a good broker 15 11. Be tax smart 16 12. Invest in money-makers, not flashy pipe dreams 17 13. Diversify, Diversify, Diversify 18 14. 'RQWLJQRUHJOREDOPDUNHWV 19 15. Invest for income 20 16. Understand how to recover from losses 25 17. Avoid Investment/Trading Seminar Scams 27 18. Understand that conflicting advice may all be correct 29 19. Investing on news 30 20. Understand the jargon and the charts 31 21. Do not under-estimate your life-expectancy 32 22. 'RQWIRUJHWJRRGROG-fashioned saving 32 23. Enjoy without addiction 33 24. All bulletin boards are positive 34 25. Aim for multiple income streams 35 26. You never know enough 36 27. $QGILQDOO\ 37 </p></li><li><p>2 </p><p>SHOCK WARNING This Guide is not going to make you rich overnight (at least not tonight, unless you are extremely lucky). This guide is not for those who are hoping for a get rich quickVFKHPHbecause, although it is unfashionable to say it there is not really any such thing. No, this guide is different. You have not just wasted money on yet another scheme or system which will ultimately fail despite the claims made in the advertising. What is it then? Well this is a guide to help you accumulate wealth steadily and sensibly. You may indeed have great rises in financial wealth in short periods of time. You may also have to take some losses. That is all part and parcel of this experience. What we are aiming for is that in the long term, your gains will outweigh your losses by some considerable distance. You should also avoid some of the mistakes that many people make. In fact, you should be able to avoid making the mistakes that MOST people make. </p></li><li><p>3 Please turn over... </p><p>Secret Number 1 </p><p>Income is not wealth </p><p>Your biggest barrier to attaining wealth is yourself. It is no use blaming everything and everybody else if you are actually living your life in a way which is not helping you to build your wealth. </p><p>Ultimately, you will only become wealthy if you spend less than you make each month. Most people think that you need to have an enormously high monthly income to be considered wealthy. Actually there are many people who have lower level incomes but act more sensibly with their money and so overall are wealthier. Any fool can get a high income but the same fool will spend it all so that there is nothing left when that income ceases. </p><p>Please understand Income is NOT wealth. </p><p>In financial terms (for there are other types of wealth), your wealth is the part of your net worth that makes you money (either income or capital growth) without you needing to work hard for it. So for example, whilst a teacher may work hard each week to get their monthly salary, somebody with a property portfolio can be paid each week in terms of rental and capital gain on their houses, for doing relatively little. If they were to add to this some high dividend paying stocks, and maybe some regular returns on sales of a book they wrote some time ago, you can see how they would be considered wealthier than the teacher. They could actually continue to live in the manner they have become accustomed for as long as their portfolio paid out which would normally be longer than a normal salary. Even better, they would not have worked themselves into an early grave in the process! </p><p>Ask yourself this question. </p><p>How long could you continue with your normal spending habits, if your regular monthly pay were to be stopped? Your aim should be to make it so that a regular monthly salary from an employer becomes a nice bonus! </p><p>,I\RXGRQW- you will forever be bound by the lie that it takes a high income to become wealthy, and it requires working all the hours in the day and night to achieve that salary. Believe that - and financial independence and security will always be just out of reach. </p></li><li><p>4 </p><p>Secret Number 2 </p><p>1R'HEWLVDJRRG'HEW </p><p>Although most of us will go through life needing to borrow money at some point or other, be it to ease cash flow by the use of a credit card, or by taking out a mortgage on a family home the paying of interest will of necessity mean that we have paid back much more than we borrowed. This is a sure fire way to eat at your wealth. The more debt you take on, the more difficult it will be to get out of it. It is like a drug, and it can destroy you in the same way. Any debts you take on need to be targeted and cleared as soon as possible Yes, even your mortgage. </p><p>What should I do first clear the debts or invest? </p><p>As I said, we all have some debts at some point in our lives. It may be that we are still faced with a student loan after university. It may be that we needed to take on a loan to buy a new car (more on that later), or it PD\EHWKDWZHKDYHVRPHIXUQLWXUHRQDEX\QRZSD\ODWHUGHDO$OPRVWwithout exception, we will have a mortgage. And then comes the quandary: If all my money is pumped into paying off the debts, I will not be doing any saving for a rainy day or for my life when I have retired. Thankfully, this dilemma can be solved with a fairly simple calculation. </p><p>The answer depends on two variables: </p><p>1. How much interest you are paying on your debt, after tax. 2. How much interest you expect to earn on your investments, after tax. </p><p>Please note that there are two types of debt. At one side we have the worst kind - very high-interest debt that comes from things like credit cards and store cards. This kind of dead is lethal and should really be avoided unless absolutely necessary. It should only really be used to aid cash flow, and it should be paid off each and every month if at all possible. The second kind of debt is the lower interest variety; things like the mortgage or student loan. Often, the interest on this kind of debt is low enough that it may worth holding onto the debt for its full term. </p><p>The bottom line is: </p><p>If you can guarantee a higher after-tax return by investing than the after-tax interest rate you would pay on your debt, you should go ahead and invest. If not, you should clear the debt first. </p></li><li><p>5 Please turn over... </p><p>Here are some examples for you: </p><p>Example 1 Imagine you have a 30 year, 150,000 mortgage with a 4 percent rate. If you expect to earn an after-tax return higher than 4% on your investments (the odds are reasonable that you will if you have a long-term view), then you should invest rather than pump additional funds into the mortgage. </p><p>Example 2 Imagine you have a 10,000 credit card debt with a 22% interest rate. You should only invest if you think you can earn a 22% after tax return on your investments. The average return on the stock market has been somewhere around 11-13%, so this seems a risky proposition. In this case, it would be foolish to invest and you should instead work on clearing the debt first. </p><p>KEY POINT: </p><p>You need to do what is best for building wealth long term. Many people cannot see that paying off a debt is actually saving them more money than they would be able to make any other way. Do the calculation and work out what is best for you. </p><p>Credit Card Debt is Deadly </p><p>How to find the money get out of credit card debt </p><p>Many people struggle to pay more than the minimum balance off each month, and as such, they never eat into the debt. Here are a few tips about how to get rid of the most deadly debt of all. Until this has gone, \RXGRQWVWDQGDFKDQFHRIEHFRPLQJZHDOWK\ </p><p>1. Do you have any investments you can use at this stage? </p><p>As you will have seen from the last calculation about whether to invest or pay off the debt with credit cards it is always better to pay it off first. Therefore, if you have money in savings accounts or invested in bonds or stock, it is more than likely in your best interests to use that investment to clear your debt at this stage. Remember, if your investment is not inside an ISA, it is taxable. It is subject to capital gains tax and you will pay tax on the dividends. As pointed out earlier, it is debateable whether you will ever beat the 25-29% needed to make it worth keeping the investment rather than paying off the debt first (even if it is inside an ISA). Cash in the investment and use it to lower your debt. </p></li><li><p>6 </p><p>2. Do you need all that stuff? </p><p>A life-laundry is a useful way of cutting down our debts. When was the last time you read those books or rode that bike? Are you likely to use the tent again? Why not sell it all on eBay or Amazon Marketplace. Making a few hundred pounds at a car-boot sale could also help to cut down your debt. </p><p>3. Ditch the subscription lifestyle </p><p>Many of us subscribe to Sky and to a daily newspaper, or a monthly magazine. We also pay for extra insurance plans on our mobile phones and electrical appliances. We love the fact that we can use 900 minutes of talk time and 3000 texts, with unlimited data download on our mobile plan. However, all this adds up and we need to decide whether we want to become wealthy or not! When was the last time you exceeded the data download of the mobile package below yours? What about the talk time? 'R\RXXVHDOOWKRVHIUHHPLQXWHV"'R\RXQHHGFKDQQHOVRQ\RXUTV? How often do you actually read the paper? Could you pick one up on your way to work instead of having it delivered? </p><p>Small changes in your monthly subscriptions can actually save hundreds of pounds which can be channelled to paying off debts. </p><p>4. 'RQWpay for the brands whHQ\RXFDQWWHOOWKHGLIIHUHQFH </p><p>We are all suckers for advertising (otherwise companies would not invest PLOOLRQVLQLW+RZHYHUIRUDZKLOHWU\VRPHKRPH-EUDQGRUFKHDSHUalternatives in the super-market. Fill up the car with fuel from the supermarket rather than paying the premium price of the named brands. Go to the local caf rather than the big brand and big price COSTA or STARBUCKS. All the money you save will help you to cut down on your debt. </p><p>5. The Snowball effect The idea behind getting rid of your debts is that once gone, you will have more disposable income available to put towards your goal of becoming wealthy. People often wonder whether they should attempt to target the largest debts first, because they are accruing the most in terms of interest. However, it is quite demoralising to see how little difference you are making to a large debt. Meanwhile, your smaller debts are also growing and you end up standing still. You should pay the minimum balance on each debt, and channel all the extra money you have made by following steps 1-4 above, into clearing the balance of the lowest debt. </p></li><li><p>7 Please turn over... </p><p>Once that debt has gone altogether, you take the money you were paying to that and channel it onto the next largest debt. Now repeat the process until you have only one debt left. All spare income can now be targeted at removing the final debt. In effect, you have gradually increased the amount of spare money simply by knocking off one debt at a time. This is FDOOHGWKHVQRZEDOOHffect. Remember, even small amounts will make a difference. It only takes a handful of snowflakes to make a snowball this will get the ball rolling. And in the long run even a few pounds a week extra will save a thousand pounds over the year on a credit card bill. </p><p>KEEP AT IT it is really worth it and will unlock all the other secrets in this guide. </p></li><li><p>8 </p><p>Secret Number 3 </p><p>'R7KLQJV'LIIHUHQWO\ </p><p>Most people, believe it or not, will continue to do the same things that they have always done and the same things that their parents have always done even when they know it has not brought them success. If you look at your parents, and discover that they worked extremely hard all their life to earn a reasonable salary, and then had to cope with a reduced income upon retirement do you want to be in the same boat? If not, check yourself. Are you doing anything differently? Are you planning at the moment on relying on your company pension (or even your state pension) to get you through your retirement years? Are you hoping that things will just be alright? Well wise up. If their method GLGQWZRUNIRUWKHPLWLVQRWJRLQJWREHDQ\GLIIHUHQWIRU\RX You have made a good start by buying this guide. This will help you to think differently. But remember, you will also need to DO things differently. </p></li><li><p>9 Please turn over... </p><p>Secret Number 4 </p><p>)LQG2XWZKDW\RXU%RVV(DUQV </p><p>OK So I said that income is not wealth. That is true. However, whilst you are working on building your wealth you will be relying on your income, and a high income is a much easier starting point. </p><p>Now whatever your line of work is, it is important to aim for a job in which you can rise up the ranks. It is also important to recognise that with each promotion, you should be getting a rise in pay. Now here is the thing that most people simply do not consider: </p><p>,I\RXUERVVGRHVQWHDUQPXFKPRUHWKDQ\RXZK\VKRXOG\RXH[SHFWmuch of a pay-rise? </p><p>You will find that in offices and schools all over the country people take on new responsibility at work for what amounts to a token gesture more a badge of honour than a pay-rise. People convince themselves that they are doing it more for the experience! However, in other offices and schools, people are doing the same jobs for much more money. The reason for this is simple the Top Earner is on a great salary. </p><p>If the top man or woman has a very healthy salary, there is more scope for those under that boss to be paid well. </p><p>If your boss earns 60,000 and his or her second in command earns 50,000 why should you be offered much more than 40,000 for simply running a department? Instead, apply to run a department at another firm where the boss is on 150,000 and you should find that your salary has risen in the same way. </p><p>,I\RXFDQWPRYHWRDQHZILUP GRQW take on the post of responsibility LIWKHSD\GRHVQWPDWFKWKHLQFUHDVHGZRUN-load. All it will do is drain your time and patience, for little financial reward. </p><p>There are better ways of using that spare time to make money (more of that later) instead of investing time in a company that will not invest its cash in you. </p></li><li><p>10 </p><p>Secret Number 5 </p><p>0DNHVXUH\RXORYHZKDW\RXGRIRUDOLYLQJ </p><p>All over the developed world there are people who are in the rat race, and FDQWZDLWWRJHWRXWRILWEHFDXVHWKH\KDYHSLFNHGWKHZURQJSURIHVVLRQ It may well pay them handsomely, but it gives them no joy. This is a sure-fire way to eat at your wealth. People who hate their day-jobs end up spending all their money trying to find ways of improving their lives and bringing some joy back in to an otherwise dull and frustrating existence. This will ultimately leave nothing left for the time it is most needed that is, when the job finally stops at retirement and you are able to enjoy it. At this point, your lifestyle would have to change because there are no funds left. The job has taken all the best ye...</p></li></ul>