How to turn income into wealth

The secret to financial independence is to turn your income into wealth. In other words, in order to be wealthy you need to take what you earn and make it work for you instead of you constantly working for money.

This short blog post will give you just an overview of the topic, you need to research and learn more about it. As you research you will continually find different ways of making your money work for you.

Here is how it works. Earned income from your job (whatever is left after your expenses) is saved and then invested into assets which then gives you passive or portfolio income. Passive income is income you get from rental properties or money you earn without having to work for it. Portfolio is the kind of income from earn from paper assets as dividends paid to you.

Once you earn the passive income, you invest it into assets which buy you more assets. As you accumulate enough passive income you then use it to pay for your lifestyle expenses such as big TVs, vacations, etc…

The best part of having passive and portfolio income is that your money is working for you so you don’t have to go to work to earn the money.

Each month your assets pay for your bills and buy you more assets therefore increasing your wealth even further.


That is the key to wealth, use your earned income to buy assets and then income form the assets to buy more assets. Each of your assets function as a stream of income that keeps on generating you more and more wealth.

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Investing in shares - learning from the financial press

In this article, we discuss how to read the financial newspapers and look at other areas of the media that can provide you with information on share market investment.

The financial press in Australia, and any other country, is a very important and influential source of information in many sectors of the community. Investors rely on it for information about how their shares are performing, stockbrokers read it to see what else is happening in the sharemarket, politicians read it to see how their policies are affecting the market (and in turn, the economy) and business people in general read it to see how their companies are perceived and how other companies are performing.

It is a quick and relatively cheap way for investors to discover what the professionals in the finance industry are thinking and doing each day, and to keep an eye on their investments.

Most newspapers have a range of financial stories in their general news section. However, the majority of stories relating to listed companies will appear in a special finance section of the paper, usually titled 'Business', 'Finance' or 'Money'.

Always remember the financial press is a source of both facts and opinions. Facts are derived from official announcements made by companies, governments, other organisations as well as from the publication's own researchers. Opinions are usually expressed in special columns by regular writers, cartoons and feature stories by guest writers or journalists. Guest writers may include politicians, stockbrokers, advisers or other prominent industry figures.

The newspapers and other publications you select to help keep you informed will depend on your budget and your particular interests and preferences. Are you seeking to achieve a local perspective or a national overview? Do you want brief or detailed information? The answers to these questions will help you to choose publications that are most appropriate for you.

There is also a wealth of specialist finance magazines. Again these are aimed at a range of different markets so spend time to read through a variety of them to find the one that is suitable for you.

Can I base my investment decisions on share market tables?

It is preferable not to. The sharemarket tables in the newspaper contain a lot of useful information, however, it is important to note that they only contain historical figures.

For example, Company X might be showing a dividend yield of 20 per cent. But a chat with your stockbroker may reveal that although last year's dividend was 20 cents, the shares are now trading at $1.00 and brokers are forecasting this year's dividend will be 3 cents - providing a yield of only 3 percent.

Your stockbroker may be able to provide you with very useful forecasts for the future performance of individual companies.

Annual reports

There are numerous facts you should know about a company before you invest in it. What does the company do? Who are the directors and what is their business experience? How is the company currently performing? What are its prospects?

The financial statements included in annual reports are a valuable source of the information you will require to answer these questions. Analysts in stockbroking firms, merchant banks, investment companies and financial institutions rely on them to make major investment recommendations for their organisations.

The contents of most annual reports can be divided into 3 general areas:
   1. Background and highlights,

   2. Review of operations, divisional activities and human resources:

   3. Financial Statements

The content and form of financial statements for public companies which is used for this purpose is prescribed and controlled by:
   • Corporations Law

   • Listing Rules

   • Approved accounting standards (which have the force of law)

   • Statements of accounting concepts, and

   • Accounting Standards.

In summary, there is a wealth of information available to guide the investor to make informed decisions for investing in an organisation.

This article is based on the ASX share course, 2008.

The science of getting rich - acting in a certain way

"You must give every man more in use value than he gives you in cash value."

We continue in our journey to look at the timeless advice contained in the book "Science of Getting Rich"  by Wallace D. Wattles.

This article is based on the chapter of the book where Mr Wattles teaches us to act in a certain way that will take us closer to our financial objectives.

Mr Wattles says that if your dreams are firmly impressed upon your mind, if you use your will power in the right way, if you have an attitude of gratitude, if you give to every person more than you take from them and you act in a certain way you will attract your dreams and the what you want to achieve will come to you.

You must not interpret his words as mere dreaming without no action. What he means is that you need your mind set in a way that will continually motivate you. The road to riches, financial independence or whatever it si that you want to achieve is not easy so you need to remain positive.

Those advices are followed by some concrete actions that you can take today that will take you further in your road to wealth. The first one is giving everyone more in use value than he gives you in cash value. This means that you are doing your very best to serve your customers and to deliver value to them. Your customers, which can be your employer, needs to have the impression of more use value than in cash value that he gives you.

I have used this advice and it worked wonders in my life and it continues to work. To find out more how this advice has literally changed my life  click here.

The nest advice is to act in a certain way that will take you closer to achieving your dreams. But exactly are you meant to act?

Do not bother as to whether yesterday’s work was well done or ill done, do today’s work well. Do not try to do tomorrow’s work now, there will be plenty of time to do that when you get to it.

Do not wait for a change of environment, before you act, get a change of environment by action. Cause your environment to change. You can so act upon the environment in which you are now, as to cause yourself to be transferred to a better environment.

Hold the vision of yourself in the right business, with the purpose to get into it and the faith that

you will get into it and are getting into it, but ACT in your present business. Use your present business

as the means of getting a better one, and use your present environment as the means of getting into a

better one. Your action, if performed in the certain way, will cause you to move toward the business.

Hold the vision of yourself in the job you want while you ACT with faith and purpose on the job

you have, and you will certainly move into a better job.

Do the best that you can do today, don't wait for tomorrow.

If you want to start investing in shares, do so today. If you to learn how to manage your finances, start today. If you in debt and want to get out of it, start today. Don't stay where you are, use your mind and will power to motivate you to move towards your dreams and act today in a way that will take you closer to your financial dreams.

Real riches

I am right now on my way to work on a Monday morning. It seems to be a normal Monday morning, however, I have this empty feeling inside of me. This is unusual, as far as I can remember this has never happened to me.

I fell that I don't really want to go to work right now. I miss my wife and kids. Again, this is unusual because they are at home as they always are.

We had a good weekend this last weekend. I wasn't think too much about work and we pretty much spent time together. Yesterday afternoon we took a walk to the beach, my son on his bike and my daughter on her scooter. My wife and I were just watching the kids having fun. It was very nice.

I must confess that since I have taken control of my finances and started to focus on learning about how to manage our money and pay off our debt, it has been hard to think of other things. This can be a little stressful and addictive.

On the way to the train station I was listening to the radio and they were talking about relationships with other people, at a professional or personal levels. Real riches don't come from the things we have, our assets, the money in the bank or the expense bar or boat. It comes from our relationship with others.

I need to slow down a little bit, and this can be hard to me, and spend a little more quality time with my family. There is nothing better than watching those children playing and having fun.

Even as I type this my mind is drawn to the topic of passive income. One way that I could spend more time with them is by having enough passive income to be able to quit my day job. I guess this is everyone's dream. This can be a double-edged knife though. The drive towards financial independence cannot take priority of what is really important in our lives. Having enough assets and cash to be able to provide to the ones around me and to help other people is really a wonderful thing but the most important thing is to spend quality time with the ones around me and make sure that they are ok.

Financial health is important, but so is mind and soul. I will not be able to get my time back. I will always cherish the memories of the time I have spent with my family. So I better spend more quality time with them right now.

Writing on my own website and learning about how to manage finances can be addictive. Marrying this with a full time day job can be really stressful and frustrating, especially if I cannot achieve what I have planned. The challenge is to continue to be productive, to learn about money and finances and make sure that I have plenty of time to spend with family and friends.

I guess it is hard to define what real riches are, in my case, real riches mean spending more quality time with my family and friends and creating memories that will last forever. I will be a dad that the kids will remember me by being there  with them whenever they needed me. Not the guy that was always in the office working.

Financial independence will enable me to spend more quality time with them and will also enable me to provide them with everything they need. We just cannot forget that money is a means and not the end.

Consider what is important for you and make sure your finances are working to help you to spend more time with your family and friends.

Best of luck.

The science of getting rich - how riches come to you

We continue in our journey to look at the timeless advice contained in the book "Science of Getting Rich"  by Wallace D. Wattles.

This articles looks at the chapter regarding how riches come to you. It is one of the most inspiring and insightful articles for anyone reading the book.

Wattles makes a very good point in this chapter: "...give to every person more than you take from him". This is simply the best advice anyone could give me.

It does not matter whether you run your own business, you work for someone else. When dealing with anyone, give more than you take. If you do that, your actions will return to you, many times over.

If you give to anyone more in use value than in cash value, then  you are adding to the lives of the people you are dealing with.

If you are engaged in a business transaction, make sure that whatever you are selling is worth more in use value than what you are getting. If you are a mechanic, ensure that your work is reliable and addresses the needs of your customers.

This principle applies to employees of an organisation as well. If you are working for someone else, make sure that you always go the extra mile. Don't just do what you are asked to do. Always do a little more, or do it a little better. Understand the reasons for your task and deliver more.

Employers, generally, are not seeking to exploit you. All they want is to get more in use value than what they give you in cash value. If you follow this principle, you can be sure that you will attract more cash to you. Either from your current employer or from someone else that is contact with you and knows that you always over deliver.

If you apply the principles in this article you will eventually expand your business, you will get the promotion that you want or the new job. People will know that when they deal with you they get more in use value than what they pay you in cash. They will always come back for more.