How To Get Rich

Copyright 2005 by Perry Jones
This work is available for free use by all.

How to get rich is really quite simple.

1. Generate excess cash.

2. Invest your excess cash in passive and portfolio investments until the income from those investments is great enough to enable you to retire. Of course, most people get stuck on number 1.

Generate excess cash. First, let's define "excess cash". Excess cash means that you have an income coming in that is 2 to 3 times the average for your area. You can create this excess cash in one of three ways.

The first way to generate excess cash is to work 2 or 3 jobs at the same time. The second way is to learn a trade that pays about 2 to 3 times the average pay for your area. What trade? That depends on the area you live in.

Electricians, accountants, carpenters, masons may all make 2 to 3 times the average wage for your area. Also, almost anything in the health field such as nursing, pharmacology, physical therapy, radiology, etc. may generate 2 or 3 times the average income for your area.

How do you determine the "average" income for your area? This also is easy if you don't mind being inexact. Just go to any Wal-Mart or McDonald's in your area. Ask them what their starting pay is. The "average" income for your area will be about one and a half to two times the amount Wal-Mart or McDonald's pays their entry level people. If there's a large discrepancy between what McDonald's and Wal-Mart pays just take the average of what they pay, then double it. This is the average income for your area.

Now that you have excess cash, what do you do with it?

You invest it.

Excess cash is invested in passive and portfolio vehicles. It is not partied away, it is not used to buy a bigger house or a finer car. You do not use it to take better vacations or improve your wardrobe. Use it Only to invest in passive and portfolio investments. When the income from these investments is great enough that you can retire, then go on that nice vacation, buy those fine clothes, purchase that big house or nice car, but for now, don't spend it, invest it. Do this right and you should be able to retire in 2 to 10 years. 2 years will be if you're lucky.

Passive investments or vehicles are investments primarily in business or real estate. However, investments in licenses, patents, copyrights et al would also qualify.

Portfolio investments are more familiar. These are investments in stocks, bonds, mutual funds, annuities, T-bills, etc.

With your first bit of excess cash you will need to visit an accountant. Have the accountant prepare 3 financial plans for you. The first plan will be the income you'll receive in retirement at just a sustenance level. The bare minimum to get by. The second plan will be the amount of income you'll need to get by at a "comfortable" level. The third plan will be the amount of income you'll need to retire rich.

Each plan will include not only the outcome - how much income you'll receive in retirement - but also how much you'll need to invest each year to get there and what "vehicles" you'll need to invest in.

A "vehicle" is any investment category or object whether it be real estate, stocks, mutual funds, a business, copyright on a book or a patent. Any of these could be a vehicle - a device you have invested in to increase your current assets and future income.

Your current lifestyle must support your future goals. Acquire no new debt unless it is "good" debt. Good debt is any debt that you obtain which produces income for you. Bad debt is any debt which takes money away from you. This is also the true definition of an asset and a liability.

Contrary to traditional accounting practice and common understanding, an asset is anything you own that puts money into your pocket on a regular basis. A liability is anything you own that takes money out of your pocket.

You must not enhance your lifestyle to the point that you spend your excess cash. Your excess cash is only to be invested. Do not buy the Porsche or the mansion on the green or the designer clothes or the Rolex watch. Wait. With determination, work and perseverance, you'll be able to retire soon anyway. "Soon" being a relative term meaning anywhere from 2 to 10 years.

So that's how you get rich. Simple, easy, relatively quick and almost no risk. You just need to get that excess cash flow in place. And then you're on your way.

So what's the third way? The third way is the best way. You can continue reading until you come across the third way or you may go there directly - Rich & Happy

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Perry Jones is a successful entrepreneur and work at home advocate. He has worked with several Fortune 500 companies and helped these companies generate millions to their bottom line. Perry is the Organizer for the recent Extra-Ordinary Film Festival http://eofilmfestival.goduck.net in Tempe, Arizona, and has several websites including How To Get Rich http://how2getrich.bravehost.com Millionaire Books http://millionairebooks.1afm.com and others