The Wealth Creation Plan the Retirement-Fund Managers Don't Want You to Know About Part 2

Rod Finnie has something we could all use, read his article -

Warren Buffett is the magician of wealth and in the end magic is nothing other than the total focus of a vivid imagination with powerful intent.

PART 2 - THE 26 PRINCIPLES OF BUFFETT WEALTH

Following on from the Ten Steps to financial freedom set out in part one I introduce the next stage of your independent wealth creation plan based on the success principles of Warren Buffett who is not only one of the wealthiest people on the planet but a self made billionaire. What he did you can also do if you choose to do so.

THE BUFFETT WEALTH CREATION SYSTEM

Magic operates in the realm of what you "don't know that you don't know"; but a realm that is familiar to the magician. To the magician it is normal. To the observer it is outside their realm of experience so that he or she doesn't see it. For most people the principles of "Buffett Business" are outside their everyday practice and everyday knowledge, but they can be learned.

Warren Buffett's Wealth Principles and Methods, as set out below, are available to anyone who chooses to learn them, believe them, and apply them.

1. Passion: Identify what passions you have that could create wealth. True happiness is doing what you were born to do; this is also known as self-actualisation or following your bliss. You cannot motivate the best people in any field with money. They are motivated by passion. They lose themselves in their craft. It's not money and fame, but rather talent and passion that lead to success. Their work is their life; and its fun.

2. Mentors: Study the best to become the best. Associate and take guidance with people who are bigger than you, especially in your chosen field but never follow a guru. Select your mentors very carefully.

3. Independent Thinker: always remain an independent thinker and never follow the crowd. The winner thinks outside the box and escapes the comfort blanket of conformity. Many great fortunes have been made with very little money by simply following the value investment system.

4. Do not imitate: the problem with imitation is that the imitator does not truly understand what he or she is copying. Original thought is an absolute essential.

5. Active Investor: The wealth creator takes full responsibility for their wealth and is a wise, intelligent active investor - never a Passive Investor in the hands of a broker: an Investor not a Speculator; an Owner and not a Trader.

6. Live Economically: Live below your income and never lose capital: put property before profits (buy your house for cash); and family before fortune. Know your costs and keep them low. Spenders and consumers rarely become savers and investors. If you build wealth at the price of your relationships, family and health you have paid too high a price. Buffett regards himself as "thrifty".

7. Risk: Don't expose yourself to risk - always operate with a margin of safety (see below).

8. Habits: Your habits define you. Write down the habits you want to develop and those you wish to relinquish. Develop the habits and characteristics of a Warren Buffett: passion, patience, perseverance, integrity, courage, independent thinking, value investing, active investing, discipline, lifetime ownership, mentor selection, frugality, focus and intent, work ethic, family values, research, health, moderation, trust, love and respect.

9. Value Investing: Fully understand and practice the art of low risk value investing; how to acquire the right resources at a substantial discount (ideally 25%) to their real worth (the margin of safety). Value investing is a purely businesslike transaction where one invests without emotion, fear, greed, or by following fads or trends. Value Investing is simple but it is not easy. It takes patience, a lot of reading, an understanding of accounting and the language of business, the ability to value a business, thrift, discipline and integrity, energy, independent thinking and a strong sense of self.

10. The Margin of Safety: the key to wealth. Always buy at a significant discount to market value by calculating the intrinsic value of the business and discounting it. Always differentiate between value and price. The stock market price is not the price. Only pay a reasonable price, even for an excellent business.

11. Intrinsic value: how much the business will earn over its life time. Know how to calculate the present value of a future stream of income (its intrinsic value). Know so much about an investment that you can figure out its intrinsic value: how it makes money; the durability of its earnings; what its weaknesses are; opportunities for future growth; the strength of its competitors and competence of its management.

12. Life-time ownership: Don't sell too soon. In fact become a Life-time owner; if possible never sell. Buy cheap and keep. Concentrate your ownership with twenty investment moves as the maximum. Ideally 5 to 10 is best.

13. Be a Business Owner: Buy a large percentage of a few excellent investments.

14. Focus on "Main Street": as more wealth is created on Main Street than on Wall Street. According to The Millionaire Next Door most millionaires are owners of old economy businesses such as gas stations and dry cleaning establishments, and Buffett's investments prove the point.

15. Develop your Investment Philosophy. A house is built with a plan; so is wealth. Develop a written investment plan in order to embody your principles and strategies.

16. Own a Business not a stock; be a business owner as opposed to a stock trader. Be a business analyst not a market analyst: Buy a share of a business not a stock; chase real business value - not stocks. Wealth is created through owning the right businesses with the right management. Buffett doesn't interact with people he doesn't like or admire.

17. The Value of Expertise: Buffett's wealth must also be attributed to carefully selecting the right partners. He looks for people that are "bigger" than him: "I look for seven-footers" he advises. Warren expects experts to be fanatics. He places a premium on expertise while Wall Street has an all consuming focus on the stock price.

18. Do your homework (reading, research and value appraisals) until the right opportunity presents itself, however many years that may take - but when it does, have the courage to move decisively. This is your key daily activity and will take up most of the day. Read, Read, Read; Research, Research, Research; Appraise, Appraise, Appraise. Never buy a stock because it is going up! Only buy value!

19. Focus and Intent: Wealth is created through total focus and unwavering intent. Wealth is only acquired through the daily practice of industry, frugality, and economy. Do a few things well - preferably do one thing very well!

20. Know what you Own, and Know who You Are; without both these factors there is no wealth. Risk comes from not knowing what you are doing and how you are doing it. One of the greatest pieces of economic wisdom is: "To know what you do not know".

21. Define your circle of competence. Know and define your circle of competence and don't step outside it. Buy companies whose products and services you understand. Buy what you know. Read to know and then to own. You should see yourself as an investigative journalist.

22. Keep it simple: Look for and invest in businesses that are simple and uncomplicated with a history of consistent earnings, little debt, and management that manages the business for the benefit of the owners. Invest rationally not emotionally. Take your time, be patient and wait until the times and the numbers are right. Then Act.

23. Invest for the long-term. Do not diversify excessively. Stick to your circle of competence. Purchase superior management; not "stocks". Seek out partners for life: Look for "seven-footers".

24. Constantly reinvest your excess cash until your future is well provided for and always live economically.

25. Never ever compromise your integrity. Buffett advises never to do anything in business that you wouldn't want printed on the front page of your local newspaper. Integrity, he says, is like oxygen. If you don't have it nothing else matters.

26.Stick to the plan and study this checklist daily.

If you do this your return on investment like Buffett's will always be significantly ahead of the market and you will amass a substantial fortune while living a joy filled and self fulfilling lifestyle.

Author - Rod Finnie - is a professional writer and personal, executive and transformational coach. He has 37 years experience in business in marketing and change management. He has operated in the corporate world of international business as well as in the world of the independent entrepreneur.

His focus is on personal wealth and wellness as well as on business break-throughs to optimising peak-performance.

Rod writes on the subjects of health, wealth and prosperity and has his own unique and invaluable approach to the subjects. He is a creative thinker and innovator and is developing a new approach to economics entitled Participative Capitalism.

His latest book is entitled: Awakening to Wealth - The 25 Laws of Wealth Generation and you can find out more about this at Science of Generating Wealth under "Key Downloads".

He specialises as a transformational coach for both personal and business transformation and is an exponent of Participative Management and Generative Leadership coaching; the required business management styles for the leading companies of the 21st Century.

Article Source: http://EzineArticles.com/?expert=Rod_Finnie

Oops! looking for Part 1? why not dig in...it must be here somewhere....

How To Manage Your Wealth Wisely

Everyday finances are getting harder and harder by the day. Where does your money go? In this article you will learn how to keep track of your spending and tips to saving money.

Things You'll Need:
a small notebook and pen
all your receipts
envelope or shoe box
computer(if handy)
money management software(if handy)

Step 1
Create a budget. Knowing what you spend now is the first step to creating a budget. Keep all of your receipts in an envelope or a shoe box for future references.

Step 2
Remember to include: housing, food, auto, home maintenance, clothing, dry cleaning, personal grooming and supplies, utilities, credit card payments, loan payments, insurance payments, entertainment, child care, child support(if applicable), medical bills, legal expenses, vacations, savings, and income taxes. Any source of income or spending should always be included in your budget.

Step 3
Add up your income. Include your paychecks as well as any other income obtained (part-time jobs, tax refunds, child support payments, alimony, rent, investment income or gifts).

Step 4
Once you have obtained all of the above information, you will now subtract all of your monthly expenses from all of your monthly income. This will give you any idea of where your money is going.

Step 5
Does your income cover your expenses? If so, good for your. If not, you have some great decisions to make whether it be how to earn more or how to spend less.

Tips & Warnings
1. To live within your means, create a spending plan and stick to it.
2. Balance your bank statements down to the penny.
3. Find ways to cut back on your spending whether it be preparing your lunch at home instead of buying lunch or car pooling.
4. Hold a garage sale to sell items that you no longer have a need for.
5. Start a home-based business that does not require you to spend much to begin.
6. Save your spare change. You'll be surprised how every penny adds up.
7. Consistency is the key to managing your finances.

How to Create Wealth

When you look at the formula for Net Worth (Net Worth = Assets - Liabilities), you will notice that your Net Worth will increase by increasing your assets and by decreasing your liabilities. It is important that you understand how both assets and liabilities affect your net worth. I will show you how to manage both parts of net worth.

First, let's focus on assets.

Not all assets are of equal value in promoting long-term wealth. The real key to creating wealth is controlling wealth creating assets. In other words, assets that will actually increase in value, and thereby increase your personal net worth over time.

Here are some examples of Wealth Creating Assets:
Your home
Other Real Estate
Stocks
Bonds
Mutual Funds
Savings Accounts
401(k) & IRA accounts
Other Investments

Now of course, there are other assets that will not help you create wealth, but that we may still purchase out of necessity, for entertainment, or other reasons. Here are some examples of non-wealth building assets:

Cars
Boats
Bicycles
TVs
Furniture
iPods

The important thing to get from this lesson is that the more money that is spent on Wealth-building Assets versus non-wealth building assets, the faster you will achieve a higher net-worth.

Good Debt vs. Bad Debt

Wealth Building assets also determine what debt is good and what debt is bad. The best situation is to have NO DEBT! Avoid debt if at all possible; treat debt like a bad disease. However, in life, some debt may still be accumulated; despite your best efforts. All debt is not equal; some debt is better than other forms of debt. Good debt is used to purchase wealth-building assets and bad debt is used to purchase non-wealth building assets.

In other words, a loan to purchase a home can be good debt because the home will (usually) increase in value. On the other hand, if you use your credit cards to purchase an iPod or other consumer goods, then this is bad debt because these items will not increase in value, and will often decrease in value (depreciate) over time.

Take the 30 day Financial Challenge at Keyblast.com - This article is a small portion of the 30-day financial challenge. To access lots of free information, tools, and to see what the challenge is all about, visit Keyblast.com

Spencer has a BA in Finance, an MBA, and is currently a Commercial Banker advising Business owners on Business and Personal financial issues.
Article Source: http://EzineArticles.com/?expert=Spencer_Ray

Increase Income From Your Computer

When it comes to creating wealth, it is important to note that you know what you want, and added to that is knowing how to get what you want. This may sound crazy but i tell ya this is the real thing about creating and managing your wealth. I call it Power under control. Below is an article I read lately by David Garn.

Today the internet has opened doors to a variety of work at home opportunities. Even amateur marketers who do not know much about using the internet to sell products have started to amass huge amounts of wealth. You too can start to earn money at home in a short span of time if you put your mind to it!

Freedom from all debts

Imagine the kind of relief you would feel if you had surplus money to pay off all your existing debts? You could easily get rich quick by leveraging the power of the internet to pay off liabilities and bills. You could pay off your credit card bills, mortgage bills, utility bills, car and gas expenses and a whole lot of other miscellaneous expenses that always seem to pop up on your account! You can start making money right from this very instant as you read this! Imagine the freedom and luxury of being able to purchase your dream home, dream car and fund that fancy vacation you always desired? It is all about getting in control of your life and finances now!

The many opportunities available

There are plenty of home based business opportunities available online these days. Everyone from stay at home moms to even grandmothers are using the power of the internet to earn a bit of extra income. You don't need to be a tech-savvy person and neither do you need to be an expert at selling things. You don't need to badger your friends and family and you will never need to cold call anyone. Making money on the internet can be as easy as you think it is! Right from affiliate marketing opportunities, to MLM distribution, franchising etc. there are many opportunities available on the internet.

Starting your home based business

There are many work at home jobs these days that you can easily leverage. You could become a medical transcription expert whereby you transcribe the conversations between doctors and their patients into scripted documents. You could also take up franchising where you can sell products belonging to reputed brands and earn commissions for every sale made. You could also start your own home based business by setting up an online retail store of your own. You can collect and assimilate all the favorite products you wish to sell. Your website will do all the marketing and promotions for you - even while you sleep - literally!

Flexible working hours

You can easily get rich quick by using your computer and internet connection. You can decide on the number of hours you wish to put in and the days of the week you want to work. This provides you a great deal of flexibility in outlining your schedule on a daily basis. This way, you can earn money at home while also attending all important family functions, attending to your kids and spouse etc.

Big Ticket To Wealth has helped millions of users earn extra income using various home based business opportunities. They provide a gamut of work at home jobs to facilitate your dream of more wealth in less time!

David Garn is a successful six figure earner and a top income earner in the home business industry. David works with entrepreneurs from around the world. He devotes the time, energy, and effort into his team and works with them to ensure their success.

Article Source: David_Garn

Money Talk

Hi, there just wanted to boost your day with this article from Tim J. Jensen, hope you like it - its titled Wealth Building Tips but I call it Money Talk

To experience the life of easy wealth, outstanding success, and complete financial freedom would be well come for almost everyone! You can also join this bandwagon with minimum efforts! All you need to know is just a few secrets to climb the success ladder! Being party to certain wealth building tips would let you see more wealth, riches, money, and the abundance than ever before.

Creation of mindset of a millionaire
Your focus would be the key to obtaining the maximum amount of wealth. Consistency is the other aspect. If you wish of becoming wealthy, you need to thing big and dream big. After having conditioned the mind for focusing on abundance, prosperity, and riches more as compared to poverty, limitation, and lack- more money would start flowing in to the life of yours. This is the first step towards getting rich, and the first amongst wealth building tips.

Know the function of your money
If you are unaware of the above thing, you could end up strangling the flow of yours regarding abundance. If spending recklessly is your habit, or you are not used to paying bills from time to time, or are even ignorant regarding the amount of money coming in and going out, you better come to your senses; because, in actual sense, you are repelling wealth. You might be pushing the things out of experience of yours because somewhere inside, you have realized that you would not know the way of handling more money in spite of having it. You would be pleased to know how 'magically' you tap in to greater amount of prosperity on mastering the art of managing the money of yours. One of these wealth building tips should be considered on a serious note every time.

Have a constant watch on the money which is in bank already
The riches visualized by you in the life of yours would help in the accelerating money in to the experience of yours at the lightening speed. You should start seeing yourself through the mind's eye of yours as to making use of things bought by you with the help of your loads of money, staying in house built by you with the wildly wonderful money of yours, driving car purchased by you with the cash of yours, and many more. Do not forget to add the sumptuous feelings of gratitude, satisfaction, and love with these visualizations. This tip amongst various wealth building tips would prove to be extremely useful, if followed properly.

Be consistently appreciative for the abundant riches of yours
The most influential, yet underestimated affluence trick which can be used by you is gratitude. If you develop the attitude of being thankful at every instant, you are likely to be given more. This, amongst several wealth building tips, is the most challenging concept, especially if you're experiencing any sort of personal or financial hardship. By the end of every day, pen down no less than five things for which you're grateful-literally anything- sunshine on water, birds singing on trees, your child's cuddle, fact that it's the en of the day, and time to go to bed, etc. Let this be done consistently for next sixty days. You would be astonished at the arrival of abundance flowing in to life of yours. This is the most effective, amongst all the wealth building tips.

The author Tim Jensen has always thought that there was more to life than working hard for his money so Tim and his wife Sam went in search of ways to create a lifestyle of abundance so they would have financial freedom to add value to society and people's lives. Joining the 21st Century Academy has given them the knowledge and education to achieve these dreams.

Visit http://www.wealthywayseducation.com/ to find out how you too can gain your own financial freedom with a 21st Century Education.

Order your free DVD http://www.wealthywayseducation.com/freedvd.html that helped Tim and Sam have wealth and abundance within their lives.

Article Source: Tim_J_Jensen