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3) Wealth Building – This last account is probably most important if we manage it properly. There is only one rule for this account – funds must never be spent. Never spent?!? Then what good is this account if it’s never spent, you ask? Two reasons. The first reason is that we want this account to reach a level where we can eventually spend or even live off interest it earns. Secondly, this account will be our biggest builder of prosperity consciousness. As this account grows in value, we’ll become more and more comfortable with wealth coming into our lives. Have you ever noticed how money just seems to flow naturally to wealthy people? There’s a reason for that – it’s not coincidental, it’s their attitude that attracts wealth. So as this account grows and grows, so does our comfort with money and our willingness to receive abundance.
These accounts need not be savings accounts with your bank. In fact, most of them shouldn’t be savings accounts. Obviously we want our funds earning as much interest as possible and we all know that savings accounts have probably poorest yields of all. One approach is to place our more liquid accounts such as Emergency Funds into savings accounts, perhaps keep our Purchases account in short term CD’s since we can plan more easily for purchases, and then place our Wealth Building funds in a Mutual Fund. Again, arrangement will be different for each of us – important thing is to start setting them up.
The accounts mentioned here should be in addition to those that may be offered by your employer. Employer sponsored plans such as 401K’s are a great way to supplement wealth building, but we still need to manage our wealth on a daily basis to establish a prosperous mindset. Keep in mind that accounts mentioned here are a minimum. There are countless ways to use this approach. For instance, we may choose to have a Purchases account and then another account for Gifts. Or we may want to add another account called Vacations. Many money management pundits advise setting back 3-6 months worth of living expenses in event of emergency unemployment. Perhaps when our emergency account gets big enough, we can place these “Emergency Unemployment” funds into a separate interest bearing account. Again, there are countless variations to using this approach.
Finally, one last note about maintaining accounts. We mentioned earlier that setting aside 10% of your pay is a good minimum and a great level on which to start. Some of us may be able to save more, others may have to save less – main thing is that we get started. In addition, a portion of any unexpected windfall should also go into savings. As far as how much of that savings should go into each account is up to each person. The simple approach is to split it equally among all accounts, but as situations arise, it may be practical to feed one account more than others at times. This is fine as long as rules for each account are strictly followed.
Remember – like it or not – our current finances are simply a reflection of our current level of prosperity consciousness. So if more wealth is desired, we must alter way we’re presently thinking about prosperity. If these Wealth Building principles and techniques are followed and we’re persistent to this cause, it’s guaranteed that real wealth will find its way to our lives over time.
Chuck Cox is a Technical Writer and Industrial Scientist by professional with a background in statistics. He has used mathematical and statistical methods to invest and trade in the stock, futures, and options markets. Chuck has owned various businesses and presently operates several websites. To investigate a new business idea, visit his website, http://www.earncashathometoday.com/