In my teaching in the US, Canada, UK, Singapore and Australia, I always start with the foundation of financial success, the WHEEL OF WEALTH. It’s a simple concept, but it keeps us focused and on track. It doesn’t matter if you start with real estate, a job, stocks, or a business, wheel of wealth concepts keep you on the right track.

There are 6 basic steps to the wheel of wealth. First of all, it is education and strategy. I believe in education. As one of my mentors, Jim Rohn, said, “if you work hard at your job you will earn a living, if you work hard on yourself you will make a fortune”! After education or learning strategies (like M2 Matrix), you need to focus on money making skills. We have various options, cash flow, growth, speculation, leverage, greatest hits, and even savings strategies. All of which adds to wealth over time. So where do we start? Let me suggest that we ALWAYS start with CASH FLOW strategies.

CASH FLOW is KING! Many wealth experts say that you should have multiple sources of cash flow. I agree. If you have money from a job, a small business, real estate, and stocks, then life isn’t that hard. All your eggs are not in one basket (like a job). It gives you the choice to work a job or not. CASH FLOW strategies are key.

There are other reasons why we work on cash flow. As we build our cash flow, it allows us to borrow more money. The ability to borrow money for investment activities only (no consumer debt) leads to another element of the wheel of wealth. LIFTING. Taking advantage of the ability to borrow money to acquire assets (real estate or business) is quite another key to wealth. So, focus on CASH FLOW first!

Once we have the cash flow out of the way, let’s focus on longer-term GROWTH. Making our money grow over time Using proven and solid annual returns like Tax Liens (18% per year in Florida). Or other strategies that will make us earn at least 15% per year. Minimum! There is reason for 15%, I will explain it later.

As our money grows, we will become a bit more speculative and take some risks. Looking for those BIG HITS. A WINNING FALL. Maybe that big foreclosure deal, or stocks that RUN a lot!

LEVERAGE and tax planning are the remaining keys. We have to leverage our cash, assets and time.

Tax planning and asset protection are the keys to long-term wealth. It is said that one third to one half of your wealth will come from tax planning. I agree. The average family will earn $2 million in their lifetime. At 30% that’s about 600k in taxes. Anything we can do to lower that rate, or cut a few percentage points. It goes right into our pockets.

Strategy: Use the Wheel of Wealth

Think of a pie chart with 6 different sections. A piece of the “wheel” is important.

1. Education: Napoleon Hill said it well. Specialized knowledge is the key to wealth. Spend any amount of money getting great mentors, teachers, and coaches into your life. You can BUY your way to success.

2. Cash flow. He is king! Multiple sources of income. One job is not enough. Create 3 more sources of cash flow. For example: work, rental property, stocks, and small business income.

3. Growth. Long-term wealth is appreciation and growth. Use systems like: Canslim, Dogs of the Dow, seasonal trading, fundamental analysis, or buffet approach.

4. Greatest Hits. There’s nothing like a winning fall every once in a while. Look for higher returns.

5. Leverage. All the rich use it. Leverage your cash, assets, credit and intelligence.

6. active. One-third to one-half of your wealth will come from tax planning and asset protection. The average American family will earn more than $2 million in their lifetime. How much do you take home?

Unfortunately, many people start with the wrong step or mix strategies. Example, they invest in stocks to grow, when what they really want is cash flow. Cash flow to increase a job or even replace a job. Everyone should have multiple sources of cash flow (just in case). You need a CASH FLOW strategy in the stock market, not a growth strategy. Most advisers talk about growth strategies, like buy and hold, or fundamental analysis. That doesn’t pay the bills.

There are several cash flow strategies for the stock market. Strategies like: Credit Spreads, Options, Covered Calls, 3-Day Pop, Best 6 Days of the Month to Trade, 6-Week System, Daily Gap Trades and more. You should check this. In fact, we will talk about these strategies later. They are cool.

Many investors buy real estate for cash flow and end up with growth (appreciation). When they expected to sell the property and make money. There are specific cash flow strategies in real estate and separate growth strategies. You need to know the difference.

Or even worse, people deal in real estate, businesses, or stocks without education or a specific plan. The best thing you can do before embarking on any adventure is to buy a MAP. Know the territory, and the path before traveling it. Otherwise, you will lose yourself and your money too.