| The Pyramids of Egypt have stood for around 5,000 | | | | maze and reach your goal you need a well thought |
| years. The reason why they have lasted so long is | | | | out action plan. Your plan should include which |
| the basic structure of each layer being built on the | | | | opportunities you will focus on and how you intent to |
| strong foundation of a broader, solid layer beneath. | | | | capitalize on them. |
| That is exactly the way to build your wealth so it | | | | Wealth Layer 4: Good Risk Management |
| too will stand the test of time. | | | | The first responsibility of any investor or business |
| Your wealth pyramid has seven layers. And just like a | | | | person is to not lose money. That is why risk |
| real pyramid they must be added in the right order. | | | | management is on the layer before profit. |
| Imagine if you tried to build a pyramid upside down, | | | | There is a lot of difference between risk |
| with the small layer at the bottom and each layer | | | | management and risk avoidance. Every investment |
| above getting progressively bigger. How long would | | | | and every business contains an element of risk. If |
| that pyramid stand? It is just as disastrous if you try | | | | you practice risk avoidance then you will do nothing. |
| building you wealth pyramid in the wrong order. | | | | Risk management is the skill of identifying potential |
| Let's look at the layers, starting from the strong | | | | risk and then taking actions to minimize the potential |
| foundation layer and working our way up to the | | | | for loss. |
| pinnacle. | | | | Wealth Layer 5: Positive Cash Flow |
| Wealth Layer 1: A Wealth Success Mindset | | | | The reason that cash flow comes before equity is |
| This is the most important layer because it is the | | | | that it reduces your risk of going broke. Equity |
| foundation for your wealth. If you don't get your | | | | increases your net worth but you need cash flow to |
| head right then anything else you build will topple | | | | live on. So many people build property portfolios of |
| over. | | | | high equity growth, low yield property and then find |
| The wealth success mindset consists of your beliefs, | | | | that they can't sustain the loan payments. |
| your habitual thoughts and your habitual actions. It is | | | | If you have cash flow producing investments first |
| important that these three attributes are inline with | | | | then they can subsidize your high equity growth, |
| the achieving and maintaining wealth. | | | | negative cash flow investment. |
| Wealth Layer 2: Appropriate Skills and Knowledge | | | | Wealth Layer 6: Increasing Equity |
| Luck plays very little role in the creation of wealth. | | | | Cash flow gives you money to live on today but |
| You may have some good or bad luck from time to | | | | equity gives you long term security and money to |
| time but over the long term you accumulate exactly | | | | live on tomorrow. If you keep your equity growth |
| what you deserve based on your mindset and your | | | | investments and positive cash flow investment in the |
| application of knowledge and skills. | | | | right balance then you can have the best of both |
| If you don't have the knowledge or skills to create | | | | worlds. |
| wealth then the first investment you should be | | | | Wealth Layer 7: The ability to live the lifestyle you |
| making is in your own wealth education. If you think | | | | want without the need to work |
| getting knowledge is expensive then try investing | | | | The most sensible objective of any wealth building |
| without it and you will soon find out just how | | | | plan is to eventually provide you with your desired |
| expensive ignorance can be. | | | | lifestyle whether or not you choose to continue |
| Wealth Layer 3: A Sound Action Plan | | | | working. Most wealthy people do keep working |
| There are so many ways to make (or lose) money. | | | | because they enjoy it but they always have the |
| There is the stock market and its derivatives, the | | | | choice to stop if and when they ever want to. If |
| property market; residential, commercial and | | | | you have built your wealth pyramid correctly then |
| development and then there are many different | | | | you will arrive at this point. |
| forms of business. There is the trading approach and | | | | Conclusion |
| the investing approach and there are many different | | | | Compare your wealth building activity to this pyramid |
| approaches within these two main categories. | | | | approach and you will be able to assess whether you |
| In short there is a huge variety of approaches to | | | | are building a sound, solid portfolio or whether you |
| wealth creation and each has its advantages and | | | | are teetering on the edge of financial disaster or |
| disadvantages. In order to find your way through this | | | | whether you are simply going nowhere fast. |