Road to Wealth

I still remember the question from one of my professors in university."Do you care to be famous or rich?" You answer might be both. Unfortunately,I only have some points to share with you on how to be rich.

1. Live within your means. It does not matter how much you make. What it matters is how much you keep. You are not anywhere better off if you make $70000 per year and spend $70001 per year than those who merely earn $35000 per year and manage to only spend $30000 per year. Simple?

2. Make more. It is difficult to make a lot out of single source, but relatively easy to make some from different ways. Each little step makes a difference. You might think $40 extra per month is small. But I look at it differently. If you can bring in $40 more each month, that simply means you can use your cell phone free for the rest of your life. I think it is pretty damn good.

3. Invest intelligently and REGULARLY. Keep the investment simple. Don't buy those products you don't understand. Make regular contributions to your investment. Wait and see it grow. Speculation is exciting, but investment should be boring as hell.

4. Pay attention to cash flow. Will loads of gold and antiques do you any good if they do not generate any positive cash flow? Those articles are probably important and inflation protected. But you can only achieve your financial freedom with POSITIVE cash flow.

5. Diversify. Don't put all the eggs in one basket. Trust me on this one. 10% drop in your assets hurts so much more than 10% lost in potential earnings even if they are equivalent amount of money.

6. Stick to your plan. People tends to talk about their investments when they are making lots of money from it. When a sector got so many people talking about, it is usually too hot already. Do you own due diligence to protect yourself from catching the falling knives. Set your goal, draft a plan and stick to it.