What exactly is the meaning of wealth? Robert Kiyosaki, author of “Rich Dad, Poor Dad,” define wealth as the number of days you can survive forward if you stop working tomorrow. This assumes you maintain the same lifestyle after you stop working.
This definition has a profound impact on me because unlike most people who tends to measure wealth in terms of possessions e.g. becoming a millionaire; Robert choose to define wealth from the perspective of capability. Thus, if you asked how many days you will last if you don’t go to work tomorrow and the answer you give is very small; then that would means that you are not very wealthy. But if your number is large then you can consider yourself…fairly wealthy. Obviously all of us wants to make the number BIGGER. However if you are extremely rich then your answer should no longer be a number it should be the word “FOREVER”; which means you should be able to survive forever without having to work anymore.
So this has an impact on our financial goals depending on whether we define wealth in this manner or in terms of the millions you want to accumulate. It will change our financial strategies. Some millionaires cannot last forever if they stop working tomorrow. This could be because their income will stop if they stop working and they have expensive life style. We have heard of successful rich celebrities who ran into financial problems when they are no longer working. I suggest to most people to adopt what I called, the Ultimate Financial Strategy; which is to reach Total Wealth (defined by the ability to say “forever” when asked how long you will last if you don’t work) within the shortest possible time.
The next logical question, of course, is, “How do we achieve this Ultimate Financial Strategy?” Someone once said to us that the key to being rich is spending less than you earn and investing the difference.
That, to a large extent, is true. However, where do we invest so that we can create more wealth? In our Money Mastery Community, we advocate building Money Making Machines.
The Money Making Machines (MMM)
There is a huge difference between making money and creating wealth. Many of us know how to make money but don’t know how to create wealth.
In general, if your objective is just to make money, it is not too difficult. As long as you are willing to work very hard, putting in time and effort, you will definitely make some money. However, creating wealth requires more than that. It requires you to have a different mindset; it requires you to work smart.
Creating wealth means creating Money Making Machines. So what exactly is a Money Making Machine? These so-called machines are the products, investments, services or businesses that will be your “sources” of income that will help you generate more wealth in the long run even as you stop working today. How?
First you probably need to develop and build the machine. Once the machine is built and if you build it well, it will then produce revenue for you without using your time. Initially you will probably have to put some time, effort and resources in order for it to start generating an income for you. After a while, the intensity of your efforts reduces but it continues to generate just as much or even more money for you…thus giving you residual and passive income.
Sounds too good? Let me give you a classic example of a Money Making Machine. Imagine you have written a book that is sold in all major bookstores. Each time a copy is sold, you receive royalty or profit from sales. Of course, you must first put in time, effort and resources to write, publish and market the book. But once that work is done, the money will keep flowing in from all future sales. This is called creating intellectual property.
Other examples of Money Making Machines include owning a car park, having a portfolio of blue-chip stocks and shares that pay regular dividends, owning a row of vending machines or having a piece of property that pays you a rental income. I am sure there are many more examples that you can think of.
Unfortunately, in real life, most people don’t focus on creating Money Making Machines. They focus on turning themselves into Money Making Machines! They put everything they have (time, effort, energy and even resources) into their jobs or business, which they may not even like!
Some of us who are in business think that we are creating wealth. But in fact, many of us are “married” to our businesses. We must be there to run our business every day. Without us, the business cannot function. So as business owners, what we have just done is we quit our previous jobs and “bought” ourselves a bigger job that eats up more of our time and energy. If we don’t truly love what we are doing but remain tied down, then we are no different from being employed. In other words their business is not the Money Making Machine.they are the one.
A job is only a short-term solution to a long-term problem. The real solution is to create Money Making Machines. With rising living expenses in most countries, it is almost impossible to live on the savings from your job after you retire! Many of us even have more than one job in order to survive.
While having Money Making Machines one of the indispensable components in the wealth creation process, it does take some initial effort to build them. Like all things in life, there are critical success factors. And getting the necessary training and networking within the right community of like-minded people, having the right resources and ability to turn creative ideas into actual products or services that meets the market needs will increase the possibility of success.
In the Money Mastery community, we work together to coach, guide and help build their Money Making Machines so that no single member is left alone on their own.