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Good news Sydney!
Looks like we are about to emerge from our Coronavirus cocoons real soon.
“Whew” (wipes brow).
But we have to stay vigilant people! Continue to fight the good fight.
Still, being out to venture outdoors and seeing a friendly face is a welcome change.
Mind you, I have been doing some thinking during this lock-down period.
What on?
Well, on ways to accelerate my wealth.
Nothing too fancy like taking out butterfly options or land-banking R3 lots.
Nah, just simple and easy things anyone can do such as…
Using other people’s money
You see guys, one of the biggest difference between how the wealthy versus average person builds wealth is how they invest… not with their own money, but with other people’s.
If you’ve purchased a home or investment property – you are doing it already.
Because you’ve borrowed money (mortgage) to magnify your investment activity for accelerated returns.
For example, let’s say you borrow $400,000 to buy a property worth $500,000.
This means you have used $100,000 of your own money.
If that property rises to $600,000, you have made a 20% nominal return ($100k/$500k) AND you have made a 100% ($100k/$100k) return on your initial cash.
Of course, leverage works both ways – just as it can magnify your gains, it can also magnify your losses.
Using other people’s time and expertise
Another way we can accelerate our wealth is by using other people’s time and expertise.
You see, many of us waste time, energy and effort trying to do everything ourselves.
But it’s often said that if you are the smartest person in your team, you’re in trouble.
When I first started in real estate, I thought that the only way to learn was through the school of hard knocks – by being on the ground, doing it all myself and making amateur mistakes (plenty!).
I’ve now realized that much of the same info could have been obtained, if I had only asked the plethora of internet forums, reddits and social media groups out there.
Or even just connected with other members of the community to bounce ideas off and use their knowledge.
Take advantage of the law
This is one of the most overlooked and biggest factors to accelerate your wealth.
You might have heard the story that Warren Buffet is on a lower tax rate than his secretary.
This is partly because many tax laws were written to benefit business owners.
For example, here in Australia it goes something like this:
- As an employee – you earn money, you are taxed on those earnings, you receive what’s left over.
- As a business owner – you earn money, you claim on expenses incurred with earning this income, you pay tax on what’s left over and receive the remaining.
Understanding these principles has a significant difference to your cash flow, allowing you with more cash left over to invest!
Don’t take it from me, here’s billionaire Kerry Packer in his own words:
Even the biggest detractor to your wealth, is a legal term.
Divorce – the legal dissolution of a marriage by a court or other competent body.
Ownership structures
Taking advantage of the law also means choosing the right ownership structures for your investments.
There’s a saying that the rich own nothing, but control everything.
Knowing which entity for which investment is crucial both for asset protection and also for estate planning.
Oh yeah, this is because the common folk like you and I – we think in the here and now.
The wealthy take the long term view, and think across generations.
Mindset
Which brings us to the final and arguably most important point.
That being mindset.
I think if we have real aspirations to accelerate our wealth – we just have to think differently.
No more thinking along the lines of “I can’t afford this”, or “I can’t do that”, or “I don’t think that’s possible”.
But more like “How do I afford this”, or “Who can teach me how to do that”, or “Why isn’t this possible”.
I think the biggest reason that stops us from being successful isn’t that we don’t know how to do things.
It’s because we are so closed-off in our thinking that everything is black or white.
Personally, I think the most impactful approach to our bottom line – is opening up our minds to a whole new range of ideas and just be willing to always learn.
~~~
What do you think? Any other ways you can think of? Let us know in the comments below!
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28 Comments
J
Nice post and enjoy the post-lockdown world down there!
The Frugal Samurai
Thanks J, and you too in the UK!
Riz Health
Before you ever think of using other people’s money you should be an excellent manager of your own resources.
I have come to understand that poverty is all about the mindset and nothing else
The Frugal Samurai
Powerful words indeed, I guess many of us don’t have the grasp on ourselves and our emotions prior to jumping in – nice!
Bugzy
“Looks like we are about to emerge from our Coronavirus cocoons real soon.”
*makes cocoon noises
Co-coon
Co-coon
The Frugal Samurai
Hey Bugzy! Long time no see, hope you are doing well in Corea – it’s a jungle out there…
Kristine Nicole Alessandra
I have not realized some of these things until after I have read your article. It does make sense and I think there are things I need to discuss with my husband tomorrow. Thank you for writing and sharing this post.
The Frugal Samurai
No problem, that’s what I am here for! Haha, good luck with the hubby, hopefully he is receptive to it!
Maartje van Sandwijk
I would say your mindset is definitely the most important one here! If you have a positive mindset and you’re ready to work for your money, you will see an increase!
The Frugal Samurai
So true Maartje, combine mindset with action – a potent combination!
Krysten Quiles
Some of these things I’ve never even thought about. You’ve definitely given me some good understanding, hopefully this will help me out!
The Frugal Samurai
No worries, thanks for reading Krysten!
WorldInEyes
Nice article, the ways to accelerate wealth are really new for me , love to read and think about the mindset, ownership structure and using other people’s resources like money, time and expertise….
The Frugal Samurai
Glad you like it!
Trot.World (Harshi & Aman)
Some great ways/tips in there! I feel we need to work a bit more on the point of using other’s time as we like to often do it all ourselves, so gonna note down and write it up somewhere we can see everyday until we get to using it.
The Frugal Samurai
Good luck with it, visibility is the first step to success – how will you go about doing so?
Papa jack
Finances & health is the most factor that is affected by COVID and many people have taken a drastic change in their wealth. Preservation of wealth is the most needed in this time of trial. I also talk about this during my talks.
The Frugal Samurai
What talks Papa Jack?
Michelle
I love your perspective of mindset! Yes, always being willing to learn is a perfect strategy for life!
The Frugal Samurai
Thanks Michelle, glad you liked it!
Sundeep
Given the current slowdown in business and the lack of finances everywhere, thinking out of the box is the need of the hour. You have listed some cool tips here that makes the blog worth saving.
The Frugal Samurai
That’s very kind of you to say.
Sedija Lejiete
I love the point you made about mindset, because it truly is a such an important aspect of whatever we do in our lives, how we see challenges, wealth, money, and etc.. Great Article!
The Frugal Samurai
Thanks for reading Sedija!
aisasami
A wonderful post about attracting wealth. I have to remember these tips when I want to do so.
The Frugal Samurai
No problem, come back more often!
Elle
My husband bring one of your points up to me all the time. “ You see guys, one of the biggest difference between how the wealthy versus average person builds wealth is how they invest… not with their own money, but with other people’s, “ and I agree with this sentiment.
The Frugal Samurai
You guys must be very clever to understand that concept, not many people do!