High-Level Concepts To Fuel Your Wealth-Building Strategy
I’m sure I’m not alone when I say that my parents, unfortunately, did not have any personal finance knowledge besides being told to get an education, work hard, be thrifty and save money. So, I never learned about personal finances through my parents.
My education was not helpful either. What I learned in school did not prepare me for investing or personal finance in any substantive way. We were never taught about entrepreneurship, about real estate investments, or any wealth building strategies that would have helped to give us financial security. Most people I know, including myself, learned about building wealth strategies such as real estate investing by putting in years of education and dedication to learning about building a strategic approach to financial freedom.
It was all about taking the road less traveled. I knew I wanted a different outcome from the masses, and as a result, I knew I would have to think differently and develop an alternative investment strategy.
What we’ll talk about in this blog post is the high-level wealth building strategies that are some of the best ways to change the trajectory of your financial future. Some of these steps may seem easy, but it could take some time to master these concepts in the long term.
Ready to dig in? Let’s do this.
Money Management In Four Steps
There are essentially four pillars that M.C. Laubscher of the Cashflow Ninja deems to be necessary in developing solid financial goals. They are first cash creation, then you will want to have cash capture, then you must learn about cashflow creation, and lastly, but certainly not least you will want to master cash control.
1.) Cash Creation
In the first stage of the four pillars, Cash Creation, your goal is to generate income. Obviously, those that have high income from a salaried position or those that become successful business owners will accelerate their goals. The cash creation is the fundamental phase. The important idea here is that you don’t want to be like the masses and be stuck in this phase for 40 years like most of the U.S. population does.
2.) Cash Capture
The next phase is Cash Capture. It is in this phase that you start budgeting and saving as much of your income as you can. The difference between what your take-home income is and what you spend will be the capital you eventually use for investing and putting into a savings account, until you have enough money (beyond emergency funds) to start investing.
When you feel you have as much money as you need to more than cover any “rainy day” surprises that may come up, then you can start concentrating on setting some investment goals that you will want to achieve during the cashflow creation phase.
3.) Cashflow Creation
In the Cashflow Creation phase, people will generally be looking into various investment options to generate passive income. They will evaluate various types of real estate investments such as short-term rentals, syndication opportunities in commercial properties such as apartment buildings, office buildings, or shopping centers. They may invest in a real estate portfolio of single-family homes or various other types of investment properties. They will almost always invest in the stock market, insurance policies, real estate investment trusts REITs, bonds, and mutual funds.
4.) Cash Control
Last but not least is the Cash Control phase which involves asset protection, estate planning, and having solid life, and disability insurance policies in place to ensure that your cash flow and your assets outlive you. It is during this phase that you intentionally learn how to protect your assets from creditors, taxes, and lawsuits while also providing a legacy for your loved ones.
Private Banking Strategy
The next high-level concept to financial success is the “infinite banking strategy,” which uses a whole life insurance policy to help you become your own banking system; a lender, a borrower, and a beneficiary.
So, let’s take a typical banking model. The bank accepts your money, then deposits it into a “safe” savings account. The bank then loans out YOUR money to other clients for a higher interest rate than the nominal interest rate you are being paid to keep your funds in their account. They are making money off of your hard-earned cash. Let’s flip this scenario.
Why not with the cash you have saved for investing, buy a dividend whole life insurance policy from a mutual insurance company. When written to your advantage, your policy will allow you to fully fund it and then you are able to borrow a large portion of that money from inside the policy within the first year.
So, what this means is that when you fund the policy in a quick manner, you become eligible for dividends and earnings inside the policy itself. When you borrow against your policy at a low rate, you’re still earning interest on the FULL value, AND you get to reinvest that borrowed money into a commercial real estate syndication.
Boom! You’ve taken your funds and invested them into two places at the same time, AND now you have an insurance policy too! There’s a lot more to this strategy, but just know this is one tax-advantaged option for creating a wealth-building machine.
Value Your Time Most Of All
Your time is your most precious resource, and when you start out, you don’t have much choice but to trade your time for money. You likely spend 40-60 hours a week contributing your expertise and energy in exchange for a paycheck.
That’s not a sustainable life/happiness model, though, right? At some point, you want to have captured enough cash and begun to invest in lucrative investment opportunities, and increased your net worth so that you don’t have to put a great deal of time into working anymore and you can begin to spend time doing the things you really enjoy.
This is where you reclaim your time. Maybe that means hiring an assistant to keep you organized and run little errands for you, or perhaps that means hiring household services like laundry, a maid, and a landscaper. In all areas of life, I encourage you to explore the activities you do, their worth, whether you like doing them, and how much of your time and energy they take. When you conclude that specific actions are not worth your time or energy, hire them out and, in exchange, use your time to learn about and pursue the next level of wealth-generation.
Connect With People Who Inspire You
Another way you can fast-track your wealth-building machine is to intentionally surround yourself with people who inspire you. Find connections ten steps ahead of you, who are doing things you wish you could be doing, and then find ways to infuse their lives with value. Use your knowledge and expertise to support them and further develop a positive rapport with them.
You’ve probably heard the quote by Jim Rohn, “You are the average of the five people you spend the most time with.” Well, recent research shows that who you are is even affected by your friends’ friends and those friends’ friends! This emphasizes how imperative it is to seek masterminds, mentors, and relationships with those you admire.
As you surround yourself with valuable connections, nurture the relationships created, and allocate time and energy-sucking tasks, you create more space in which you can explore higher-level concepts and accelerate your wealth-building journey with fewer mistakes.
Continuously Break Parkinson’s Law
Finally, the greatest, most valuable high-level advice I can provide is that you have to break Parkinson’s Law repeatedly. Parkinson’s Law is the high-level idea that the more income you make, the more you spend.
Most people find that with each raise or bonus achieved, they can afford something they’ve wanted, which is all exciting until years pass by, and they’re stuck with no savings to show for all their hard work.
The good news is that you’re different. With the four pillars, buying your time back, and private banking knowledge, you are destined to thrive in that Cash Capture stage and ensure your expenses are much less than your income. Beyond that, you have to continually refine your cash capture strategy, always ensuring you have more to invest.
With each raise, cash flow check, and bonus, strive to remain conscious of the temptation to spend more and break that cycle again.
While you focus on the high-level strategies outlined above, we at PCRP Group are focused on nurturing relationships with investors (like you) and presenting the best real estate syndication opportunities available to our PCRP Group members.
For access to our private community of like-minded investors focused on wealth-building, you’re invited to Join PCRP Passive Investor Club today, taking a huge step toward checking the so-called boxes on several of the high-level concepts discussed herein.
Note: we are not financial advisors and are not offering financial advice of any kind. Please consult with your advisors before making any investment or financial decisions.
Ready to Learn More?
The best way for you to learn more about commercial real estate syndications is to join the PCRP Passive Investor Club.
Through the PCRP Passive Investor Club, you’ll get a priority review of all the deals we offer. We’ll work with you to determine your investing goals and then present you with the best deals to meet those goals. We’ll then guide you every step of the way as you invest in those deals.
So if you’re ready to start investing passively in institutional-grade, commercial real estate in fast-growing, climate-resilient markets in the U.S., join the PCRP Passive Investor Club – IT’S FREE! – and get started on your path to EARN PASSIVELY and LIVE ABUNDANTLY!
If you would like to know more about what we do and how it may be of value to you, please reach out to us anytime. We’re always happy to help!
