The most effective strategies for increasing personal wealth are also the simplest. Many personal finance experts profit from making the subject of personal finance more complicated than it really is. This is what destroys the average person’s confidence in being able to create their wealth building system.
This article will provide you with three of the simplest strategies for increasing personal wealth and building financial security
#1 Spend, Don’t Save
A good wealth building system is based on spending which adds value to your life instead of to someone else’s. Simply saving money for a rainy day does not provide you with enough return on investment to even beat taxes and inflation, which causes saving money to become losing money.
There is nothing wrong with spending money, even spending it right down to zero every time you get a paycheck. But it is important that you have a wealth building system which encourages that spending be done in such a way that adds value such as investing in education, in starting your own business or any other means of building positive cash flow.
#2 Four-Bucket Money Management
There is no doubt that keeping track of how much you spend and how much you earn on a consistent basis is one of the foundation strategies for increasing personal wealth. However, most personal budgeting plans are far too complicated to live on, and that is why I support using the four-bucket money management.
This system allows you to manage the four most important categories of personal expenses and to divide your income among them according to the greatest priority.
For example, your four buckets might include: investing, living expenses, giving and reserve spending. Your income would then be spent down to zero by dividing it between each of these four buckets, starting with investing and ending with reserve spending.
#3 Hiring Yourself
This is probably the most important of the three strategies for increasing personal wealth. As long as someone else is determining how much you earn, you are never going to earn what you are worth. This is because in order for the employer-employee relationship to work, the employer has to pay the employee less wealth than the employee is helping the employer to create. If this were not the case, employees will be hiring people to work for them.
So as a key part of your personal wealth building system, begin working on a strategy for marketing your services and for controlling your own income. These strategies for increasing personal wealth will take some work, but their complicity will make it easy to stick with long term.
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