The focus for this months newsletter is ‘Wealth Creation and Building’. A topic that I am sure is close to all our hearts but not one that our members have written about, so this month’s newsletter provides you with a number of articles that explores what some of the financial writers have contributed.

‘“Man was born to be rich, or inevitably to grow rich, through the use of his faculties.” Ralph Waldo Emerson’ Interesting thought. If we were all born to be rich through the use of our faculties, have you asked yourself the question ‘what is holding me back?’

“Wealth is not a material gain, but a state of mind.” Jerry Gillies. If you talk to those who have been successful in creating their wealth, they will tell you that the first thing that changed was their state of mind. What do you need to do, to change your state of mind?

“… Every person who gets rich by creation opens a way for thousands to follow – and inspires them to do so.” - Wallace D. Wattles

“Money is for making things happen.” – Richard Branson

What do you mean by Wealth Creating and Building? Often it refers only to building your bank balance, but what if you were to now think about the word wealth in the wider definition – ‘an abundance‘. What have you got in your life today that you are grateful for? What would you like to retain? What would you like to increase? How do you really want to change your life to create your wealth? How do you really want to change your life to build your wealth? A range of questions that you often ask yourself. We trust that the articles below will give you some ideas of how to create and build your own wealth.

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1. Learn the Language

The first point to understand is the meaning of assets, liabilities and net worth. They make up this very important formula:
Assets - Liabilities = Net Worth
A wealth-creating asset is a possession that generally increases in value or provides a return, such as:

• A savings account.
• A retirement plan.
• Stocks and bonds.
• A house.

Some possessions (like your car, big-screen TV, boat and clothes) are assets, but they aren't wealth-creating assets because they don't earn money or rise in value. A new car drops in value the second it's driven away. Your car is a tool that takes you to work, but it's not a wealth-creating asset.

A liability, also called debt, is money you owe, such as:

• A home mortgage.
• Credit card balances.
• A car loan.
• Hospital and other medical bills.
• Student loans.

Net worth is the difference between your assets (what you own) and your liabilities (what you owe). Your net worth is your wealth.

 

2. Budget to Save - setting goals

A personal wealth-creation strategy is based on specific goals. In preparing your goals:

• Be realistic.
• Establish time frames.
• Devise a plan.
• Be flexible; goals can change.

Develop a budget and live by it.

When it comes to finances, people generally fall into the following groups. Where do you fit in?

• Planners control their financial affairs. They budget to save.
• Strugglers have trouble keeping their heads above rough financial waters. They find it difficult to budget to save.
• Denyers refuse to see that they're in financial trouble. So they don't see a need to budget to save.
• Impulsives seek immediate gratification. They spend today and let tomorrow take care of itself. They couldn't care less about budgeting to save.

Knowing what kind of financial manager you are will help determine what changes to make. To maximise your wealth-creating ability, you want to be a Planner.

Track Day-to-Day Spending

You can study your own spending habits by using a sheet to track daily expenses. Be sure to include items purchased with credit cards, as well as those purchased with cash, debit card or cheque.

Get a Handle on Income and Expenses

Track your income and expenses. Identify changes you can make to increase your income or decrease your expenses, and develop a new budget that includes more savings. Be sure to make reasonable budget changes that you can live with month to month. To help you maintain the discipline to save:

• Save every month.
• Have savings automatically deducted from your income or bank account.
• Base your budget on what's left.

In other words, get on automatic pilot and stay there.

3. Save and Invest

You have budgeted and identified an amount to save monthly. Where are you going to put your savings? By investing, you put the money you save to work making more money and increasing your wealth. An investment is anything you acquire for future income or benefit. Investments increase by generating income (interest or dividends) or by growing (appreciating) in value. Income earned from your investments and any appreciation in the value of your investments increase your wealth.

Understand the Risks v's the Expected Return relationship

When you are saving and investing, the amount of expected return is based on the amount of risk you take with your money. Generally, the higher the risk of losing money, the higher the expected return. For less risk, it is reasonable to expect a smaller return.

4. Take Control of Debt

Remember the definition of net worth (wealth)?
Assets - Liabilities = Net Worth
Liabilities are your debts. Debt reduces net worth. Plus, the interest you pay on debt, including credit card debt, is money that cannot be saved or invested, it's just gone. Debt is a tool to be used wisely for such things as buying a house. If not used wisely, debt can easily get out of hand. For example, putting day-to-day expenses like groceries or utility bills on a credit card and not paying off the balance monthly can lead to debt overload.

 

5. Protect Your Wealth

After working hard to create personal wealth, you need to protect it. People acquire insurance to protect themselves from major financial loss. Insurance is simply a promise of reimbursement for a loss in return for a premium paid. When shopping for insurance products, consumers should match their needs with what the product offers and seek out the best deal. A solid credit history is also important because insurers use credit information to price homeowners insurance policies. You can buy insurance to cover all kinds of risks, but basic needs can be met with property, health and life insurance.

6. So now what?

Now that you've read this article and thought about the information it contains, how would you define Wealth? Write your definition. Now, write your financial goals. Keep these goals with your definition of wealth. Periodically refer to your goals and measure your
Assets - Liabilities = Net Worth
to make sure your wealth-building program stays on track. Now, write your own strategies for building wealth. Keep in mind the following:

• Educate yourself about money.
• Establish financial goals.
• Create a budget.
• Save each month, using automatic deduction.
• Take advantage of compound interest.
• Take advantage of tax-deferred investments.
• Research and learn about the best investments for you based on your financial goals, time horizon and tolerance for risk.
• Control debt.
• Protect your wealth.

Start budgeting, saving and investing today.

Every day counts in building wealth.

Extracted from a document published by the Community Affairs Department of the Federal Reserve Bank of Dallas.
http://www.dallasfed.org

Do You Hear What I Hear?

Our interpretation of most of the signals that we see and hear is subjective. How often have we discovered that another person's interpretation of exactly the same events was quite different from ours? What we perceive is real to us.

We need to remind ourselves that it may not be exactly what actually happened, and it may not be what is real to another person. Do not assume, without checking, that you know what another person's perceptions are.

Diana Robinson, Ph.D., CASAC
www.choicecoach.com
 

Money is a servant, and you are the master.

As much as you may at first resist this point, it is imperative to understand it to accumulate wealth, and a wealth mind set.

I am strong in my emphasis of the above, as this is half the battle to achieving a success with wealth building and creation. How many times have you inwardly thought that you are a servant to money and it is the master. You may be thinking the wrong way around, that you must work to pay your bills, and pay your way. Now, certainly, this is correct, in one sense, but we need to look at it differently, and thus, we'll be more likely to attract the wealth we desire to ourselves.

You see, by telling ourselves that we must work to pay the bills, we are projecting a 'survival' mind set, that is just enough to get by, and we are essentially programming ourselves to just survive.

How unfortunate. Now what about changing the situation around as follows:

Start out by changing your attitude, and understanding that you are the master. You do and work at what you are good at, and know you will render service to others. By utilising your earnings, and placing them in circulation, even if it is the bank, your money is then loaned out to others to help them spend on worthwhile projects and so on. The money is not idle, or collecting dust. When you have money sitting, and not doing anything, you are effectively wasting it. In no way should you confuse the above with squandering your earnings either. I am not suggesting that at all, and highly recommend you have a plan for all your funds, both inwards and outwards.

I say the above, as it is fundamental to your ongoing success, in business, and personal life, when it comes to managing your wealth.

Wealth is about accumulation of assets and money, in the right way, to assist you to enjoy life to the maximum. Remembering this will help you to maintain mastery over your money, rather than the other way around.

You will also start to attract more to your self, as you practice the skills of giving, in terms of over servicing, and delivering more than you promise. I have experienced these results too often in my own life to ever question the validity of these points.

By understanding these points, and acting on them, you will see your wealth grow dramatically. As a final thought, I also encourage you to listen to your inner voice during quiet time. This si your intuition, or sixth sense, and I have found, as many of the world's wealthiest people have, that it is worth listening to this voice. Often times, the best ideas are formed from these inner thoughts and feelings.

Marty A Cohn

 

1. Create Clear, Defined Objectives:
Before you begin on any investment plan , you must be clear on your goals and objectives. Are you looking for long-term, moderate growth at 6% that will fund your retirement?

Do you seek high, short-term gains to jump start your vacation fund? You must be clear about your goals and objectives. If not , your investments will lack direction and commitment.

2. Consistently Review Your Goals:
You should always review your goals periodically, modify and rejuvenate them. With the changing economic and market dynamics, allowing your portfolio to stay on the back burner could prove disastrous to the number of zeros in your account.

Continuously reviewing your goals, and the reality of those goals, are important to keeping your portfolio on the right track.

3. Consider Self-Directed Investment:
Most of the billionaires today have made their riches through self-directed investment. Essentially, this means taking the reins over your finances. Of course, this involves work, dedication, and consistent learning.

You may not be successful initially, but taking your money into your own hands ensures that your self-interest is best preserved.

4. Shun Bad Debt:
Not all debt is created equal. There is good debt, which is quite different than bad debt. While the former will make you richer, the latter is a road to poverty.

Simply put, whichever debt is generating income for you after meeting all the expenses is good debt, and whatever takes more money out of your pocket is a bad debt.

5. Become Your Own Boss:
When you can keep 100% of the revenues, instead of receiving a 10% cut of the true value you bring to a company, you build your path to wealth. Like any investment, creating your own enterprise has a high risk-to-reward ratio. However, the payoffs can be tremendous, both monetarily and personally.

6. Exercise Caution with Investment Advisors:
Although some investment advisors will have your best interest at heart (or at calculation), not all advisors you meet will be this altruistic. Indeed, generating an income from commissions does not translate into savvy investments for you every time.

Before you embark on a relationship with any advisor, conduct research. You can ask to review the past performance of their instrument selection, as well as call several references.

7. Allow Yourself to Make Mistakes:
There is no fool proof system of investment. Indeed, most wealthy people have made a plethora of mistakes, but learned from them to become wiser investors.

If you allow fear of making mistakes to cripple your actions, then you will only remain at status quo. Letting go of your fear of making mistakes empowers you to scale large challenges, allowing you to achieve your full investment potential.

8. Treat Hot News with a Cold Shoulder:
One of the largest mistakes investors make especially new investors is pursuing hot news with their portfolio investment. Once the trendy news has already hit the media circuits, the run is most likely already over, and you do not want to be caught buying high and selling low.

  9. Be the Tortoise:
The adage, a slow and steady wins the race still persists in our modern era of speed. Get quick rich schemes are exactly that, pure schemes.

When you take time to carefully map out, and walk through, your investment plan, the end trophy of financial stability is much more valuable.

Tarik Pierce
 

The International Coaching Register is for any individual who trades as a coach, who help individuals and/or organisations for example, establish a work life balance, manage stress levels and build communication skills amongst many other specialist areas.

Everyone who has qualified as a coach with a recognised coach training company should now take the opportunity to register. This will dramatically cut down on any misrepresentation that goes on within the industry. Many people have websites and call themselves a
coach but have no actual qualifications. The register will stop these people and raise the profile of genuine coaching and how it can transform people’s lives.

C.E.O. of the ECI Gerard O’Donovan said “the register has been administered by the ECI for the benefit of the world of coaching and coaching clients. It is also a great way for coaches to get business as members of the public can search for registered coaches in their area. It brings coaching transparency at last.”

As a Member of the ECI, Have you published your details on the International Coaching Register, at no charge?
To do so:

Login to the ECI Members Area, and then select the ICR Register Edits menu option on the left hand side of the screen.

Create your entry by selecting:

• Insurance - enter your Professional Indemnity Insurance details here.
  
   
• Training - enter the details of all the training courses you have completed here.
  
   
• Workshops - enter the details of all the workshops you have attended here.
  
   
• Accreditation - your ECI Accreditation details will automatically be included here. You also have the opportunity to enter the details of all the accreditations/credentials you have been awarded, as an independent verification of your coach training and experience.
  
   
• Business Details - select or enter all types of coaching you include in your Coaching Business/Practice.
  
   
• Organisation Membership Details - enter the details of all Business Organisations in which you hold a membership - these could be other Coaching Bodies, Chamber of Commerce, or any type of organisation that is appropriate to your business.
  
   
• Display - do not forget to DISPLAY your details. Selecting yes your details will be displayed on the International Coaching Register. For ECI Accredited Coaches, your details will also be displayed on the ECIs Coaching Referral programme.
  
   

We look forward to seeing you on the International Coaching Register.
 

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