We would all like to think of ourselves enjoying the good things in life, not having to stress about finances, and not having to be concerned about growing old, poor,puma pas cher.
But if we are currently living from pay cheque to pay cheque,occhiali carrera outlet, never seeming to get ahead or having any savings, how do we change things,boutique chanel? Where do we start in our quest for financial security,polo ralph lauren outlet?
The best thing we can do,lunette carrera, is sit down, take a deep breath and contemplate the differences between the haves and the have nots, the achievers and the laymen. What is it that the successful and wealthy do, that is different to us? What are the principles that they utilise to create wealth,puma ferrari?
Once we find out the principles that others who have created financial security have used,chaussures puma, it seems that then the only step left would be for us to try and duplicate the process.
Following is a list of some of the wealth building principles that I have discovered in my study of and conversations with successful people.
These concepts have been utilised extensively by those who have already created enormous wealth.
1,longchamp borse. Use the power of Compounding Interest/Growth.
John D. Rockerfeller once described compounding interest as the “Eighth Wonder of the World”.
Compounding is also referred to as Rate & Time because the longer the time, and the higher the growth rate, the greater the effects of compounding become,chaussures pas cher.
Compounding works by letting any interest earned get added to the initial investment, and then the next lot of interest is calculated on the sum of the two, and so on,carrera lunettes. Interest is earned on interest. This gives the effect of exponentially increasing the value of an investment.
One of easiest ways to calculate how compounding interest works with different rates of return is to become familiar with the Rule of 72,puma pas cher. This rule states that “The number of years that it will take for your money to double is 72 divided by the interest (growth) rate”,polo ralph lauren outlet.
Therefore if you have $1,chaussures puma,000,ray ban pas cher.00 invested at 10% interest,carrera online, then the number of years that it will take for your money to double to $2000.00 is 7,oakley pas cher.2.
72 divided by 10 = 7.2
2,sunglasses oakley. Use the tried and true method of investing in residential real estate,lunette carrera pas cher.
Statistics show that over 98% of the world’s millionaires have made their money through property.
It should really not come as a surprise, because everyone needs a place to live, and generally at least one third of the population are renting,ray ban pas cher. Property is a necessity,lunettes chanel, so it can never go out of fashion.
As the population increases,ray ban wayfarer, so does the need for housing. The laws of supply and demand therefore will ensure that prices keep rising.
Banks consider property to be one of the most secure investments and because of this they will loan you a high percentage of the value. This leads to the next principle.
3. Using Other Peoples Money or Gearing is a tool used extensively by the wealthy,sac chanel.
Why is using Other People’s Money so important,chanel pas cher? The reason is that it is possible to use “leverage”,longchamp outlet, also known as “gearing” to obtain a greater result,ray ban lunettes, than you could have obtained using only your own contributions,lunette oakley. The word leverage comes from “lever”. As you know a small amount of force applied on one end of a lever,lunette oakley, can produce force far greater than what was initially exerted. A lever has the effect of multiplying the power exerted,ray ban lunettes.
In the case of investing, it is referred to as leveraging when you use just a small portion of your own money,sac chanel pas cher, say 10% deposit on a $300,carrera sunglasses,000,polo ralph lauren.00 house,longchamp roma, and borrow (leverage) the rest, in this case 90%,oakley golf. The capital growth that you benefit from is then calculated on the full $300,000,polo ralph lauren.00,carrera lunettes, not just the $30,000.00 that you personally contributed,oakley pas cher, having the effect of multiplying your capital gain.
Gearing allows you to purchase a far more expensive property than you could if you were using only your own money,ray ban clubmaster pas cher. Controlling assets of a higher value means that compounding growth has more to work on,carrera occhiali, and therefore your net worth will increase much quicker. Gearing allows you to build an investment portfolio more quickly than would otherwise be possible,lunette carrera.
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