There is a simple misunderstanding about money, capabilities and how to accumulate and keep wealth. This misunderstanding has been propagated by our public school system. Our public school system teaches:

• Study Hard
• Get good grades
• Get a good education
• Get a good job
• Retire after 40 years of building someone else’s dream
• Live on 60% of what you couldn’t live on before

We spend 14 to 24 years learning from people who do not make a solid living how to make a solid living. We learn in a school system that does NOT teach personal financial acumen or how to get along with our fellow man.

Now, I love teachers! If they paid teachers what they are truly worth, I would be one. And, I will probably retire from public life to be a teacher. What I am saying is that it is time for us to learn how to succeed.

In Great Britain, people take month long vacations and save 38% per capita last time I looked.  That is because they teach it in their school system.  Each of us would do well to learn from their model.

These two diagrams will help show you how to start thinking of your assets and how to increase them.

First, we want to talk about the four quadrants of wealth. The first quadrant is where we all start. In it are the basic elements we as humans have.

The Four Quadrants

• Cash
• Credit
• Capabilities
• Career

Most people take those four elements and trade them for a lifestyle that is NOT satisfying and is not what they can achieve.

They trade time for money.

The better model is to trade those four elements for assets.  Those assets will generate a cash flow and from the cashflow, you can buy your lifestyle.

When you set your goals, make sure you build in delayed gratification until you reach the designated cash flow that will create the life style that has been set forth in your goals.

What are considered assets you ask?  Rental properties, software, music, artwork, businesses, books and any idea or other business model that produces cash on a consistent and residual method.

If you spend your time and your four elements accumulating the means to acquire assets instead of lifestyle, you will create for yourself a lifestyle that many dream about.

Why is it that most people do not reach their dreams to the tune of 97% DO NOT retire financially free.  There are two fundamental reasons:

#1.  They are not doing what they love and therefore, lack the passion necessary to achieve what they want.
#2. They do not make enough income in their life to take TIME to think and create the assets to provide the dollars necessary.

These two reasons are not related.  If you love what you do you will have endless energy to accomplish those things you want to accomplish.

Most of us are not necessarily doing what we love.  So, we must use number two as the basis for how to create success.

Therefore, the key to getting the TIME necessary to create a plan to succeed is having your income exceed your expenses.  There are two ways to achieve this.  Either one will work for our purposes:

#1.  Increase your income to exceed your expenses.
#2. Lower your expenses beneath your income.

Why would we want to do this?  To get the freedom to use the time to think.  Most people never have had the time to think about their future and how to fund it or whatever you want to accomplish.

This TIME allows you to create the plan that you have always wanted to achieve those things that you want.  The uber wealthy have always known this.  The wealthy teach their children this process.  The diagram below shows us this ceiling that I call the “Wealth Ceiling”:

The yellow band represents the Wealth Ceiling.  As a result, people tend to take the easiest route.  If it is hard to acquire assets, then most people might take the easy route and trade their cash, credit, capabilities and career for their lifestyle, which 97% of people have chosen to do.  It takes discipline, delayed gratification and desire to accomplish this.

For you to break this cycle you must either raise your income or lower your expenses to give you the freedom to use TIME to think.  I suggest you spend some time thinking about how you can create the TIME to think about your future and your plan for life.

Rob Wheeler

P.S.  Give me your thoughts on this subject as well.