Can You Be Rich? Part 1

 


Visitors: 982

What does becoming rich mean to you? Is it early retirement? Perhaps it is the big house and the fancy car. Do you want the personal freedom that comes with being wealthy? Knowing you could go anywhere in the world you wish at anytime. Imagine knowing that your children and even your grandchildren will be taken care of financially after you are gone. Becoming rich is not a birthright or a random act of chance, it is a choice. So the question is, do you choose to be rich?

What is the definition of wealthy? It is not someone who makes a lot of money. A doctor with a six figure salary could still be considered poor if he/she spends every cent they make. The true definition of wealth is someone who makes enough money to live without having to work. That is, their monthly passive income is greater then their monthly expenses.

So what is passive income? Passive income is essentially money you earn that did not require your constant presence to do so. If you stopped showing up to your job you would no longer earn a paycheque. A passive income opportunity may take time initially to set up. However, if done right you will be earning passive income even as you sleep. This is also known as residual income, or leveraged income. A good example is a home that you rent out to a tenant. Once you have bought the property and set up the systems of management there is very little for you to do except collect the money from your bank account. Another example would be financial instuments that pay you a monthly yeild, such as a bond, a dividend or a distrubution. These are but just a few examples. The wonderful thing about passive income is you no longer have to trade your time for money. If you choose to be rich then passive income will be your investment of choice.

Try this exercise to calculate your personal wealth ratio. Add up all passive income you have earned over the past month. For this exercise do not include paper assets such as stocks and bonds. Divide your monthly passive income by your monthly expenses to get your wealth ratio. If that number is one or higher, you can consider yourself wealthy. For example:

$200 (passive income) / $2000 (monthly expenses) = 0.1 (wealth ratio)par This individual has enough passive income to cover 10% of their monthly expenses. Those that choose to be rich make it their goal to achieve a high wealth ratio.

We're just a couple guys you want to educate people, like we've been educated, to help them become financially free. Learn more about us at http://www.choose-to-be-rich.com

(466)

Article Source:


 
Rate this Article: 
 
"Raising Smart Rich Kids - 3 Vital Steps to Prepare Your Child For Success and ..
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

So You Want to Be Rich (Part Three)

by: Bryan Fleming (June 22, 2006) 
(Finance/Wealth Building)

So You Want to Be Rich (Part Five)

by: Bryan Fleming (July 06, 2006) 
(Finance/Wealth Building)

How Any Woman Can Become Rich - Part 3

by: Dr. Mary E. Waters (June 11, 2007) 
(Finance/Wealth Building)

The Rich Man and Lazarus: Luke 16:19-31 - Part 2

by: W. Edward Bedore (December 01, 2006) 
(News)

The Parable Of Lazarus And The Rich Man - Part 2

by: Charles Crosby (June 16, 2007) 
(Self Improvement)

The Parable Of Lazarus And The Rich Man - Part 1

by: Charles Crosby (June 16, 2007) 
(Self Improvement)

The Rich Man and Lazarus: Luke 16:19-31 - Part 1

by: W. Edward Bedore (December 01, 2006) 
(News)

Enter The Rich Jerk, a Marketing Odyssey Part 1

by: Alex Goad (September 17, 2005) 
(Business/Marketing)

Rich Truths From A Part Of The Word Of God Which No Leader Can Overlook, ..

by: Sandy Shaw (April 23, 2008) 
(Self Improvement/Leadership)

"Raising Smart Rich Kids - 3 Vital Steps to Prepare Your Child For Success and ..

by: Terry Mazzer (September 30, 2008) 
(Home and Family/Parenting)